We first must appreciate what has happened.
President Mugabe who leads the ZANU (PF) political party stated at the outset that he was a Marxist, follower of Karl Marx communist system. The Party held a referendum to declare Zimbabwe a one party state and it was rejected.
The country then experienced the Land Invasions to take land from mainly white farmers to give to the blacks most of whom supported the Party. The reasons given for the acquisitions were to a degree acceptable. The manner of doing so was violent and badly executed and the distribution thereafter was partisan and very poorly done to the extent that some three hundred thousand workers were put out of work and much of the land became idle. Now 300000 at $100 per month equates to a loss of $30 million per month in spending power. The method of allocating the land was done in such a way that the people could not sell their land and consequently it had no value. Communist style policy.
Then came the indigenisation laws requiring white/foreign owned companies to give away 51% of their businesses and many companies closed and many thousands of workers lost their jobs. Here was an ideal opportunity for the Party to take over businesses that closed and it was ignored. And so the spending power of the country continued its downward spiral. Foreign investment will not materialise under these conditions. Again a communist style policy.
The downturn in the economy meant further closures and redundancies and the workforce and spending power continued to shrink. Then came the so called ZimAsset which is intended to provide more power to government with an intention to generate business through government. Power tends to corrupt and absolute power corrupts absolutely, so the saying goes. The more power in the hands of government Ministers and officials the higher the corruption will be. The country is already rated as one of the worst in the world for corruption. Communist style policy of retaining power with the Party.
So at this stage the country has some 90% unemployment with little or no investment, high levels of corruption and some 3-4 million nationals living outside the country. A fair proportion of school leavers end up leaving the country and many parents now send their children outside the country to be educated. The diaspora is contributing much towards what is left of the economy. The government tax receipts are barely sufficient to pay civil servants and local government employees. The country has a massive trade deficit and reliant upon imports.
HOW TO CORRECT THIS SITUATION
- Adopt the Centreline System of Government which advocates changing tax systems to bring employment costs down to their lowest level, providing free health and education in the same interests. The system will bring costs of production down and ensure that imported goods share equally in the tax burden. Zimbabwe must be able to manufacture at a cheaper price than imported equivalents, if not why not. The system will attract foreign investment into the country. The Government would need some additional advice on Taxes and a few other matters.
- Delete the Indigenisation regulations altogether. This is vital to create free market conditions and attract foreign investors into the country. Bear in mind the objective is to provide employment as far as possible. It is not a matter of attracting foreign investment just for itself.
- Delete the ZimAsset legislation to curb corrupt activities and appreciate that government officials should not run businesses.
- It then becomes necessary for the army, government and any others to divest themselves of their interests in mining and other activities. Investment for profit is not their function.
- It is also necessary to change immigration and such laws to allow the inflow of skills with the investments. Zimbabwe is very short of skills and investment into manufacturing requires knowledge as well as money. It is vital to open the economy and the country must be able to attract back its own external citizens and others.
- There is a need to look at Deeds registrar and the manner of dealing with Deeds including company registrations.
- The land acquisition and distribution requires serious attention. The land needed to be sold to the participants with proper title which would have given the land value and the ability to be used for security. The land needs to be properly utilised to provide crops and to keep workers employed. The original land distribution by the party was favoured to party members and not necessarily on their ability to farm. It will be vital to make the farms productive and get people employed as well.
- Education over the years has suffered and people have lacked a decent education. It will be necessary to bring in some adult type education and to instill a belief in HIM, being Honesty, Integrity sand Morality. In addition there needs to be an education programme at Ministerial and Senior civil service level in good corporate governance. Even driving standards need to be improved before they deteriorate too far.
- The government will need to look at some of the cultural issues such as the system of land entitlement in rural areas and the role of Chiefs and Headmen. There will be population growth and therefore things have to change. As far as some of the rural areas are concerned there may be merit in examining the Kibutz system in Israel, or something similar, to provide employment and training in these areas.
- It will be essential to encourage investment into electrical power generation and the country is ideal for solar power. There may well be new gas supplies available. It requires innovative minds to do what is best for the country and the avoidance of corrupt decisions. It is far cheaper to generate power than to import fuel for generators. One always needs to look at the bigger picture.
- Consideration must be given to appointing a non political ceremonial President with the power to call elections when necessary. This would be to avoid a future dictatorship developing.
The Centreline System because of its system of taxes will attract investment into the country. The expanding economy will generate more and more tax. There should be a large reduction in imports and an expansion of exports on a continuing basis. Shop owners need to be educated into the fact that their sales are dependent upon the earnings of local people and they have a need to support local industries to maintain and improve their own sales. Because the tax system is based on VAT there will be a government incentive to create jobs and maximise spending power in the commercial sector. It is vital to build up the employment base and Zimbabwe must aim to have some 5-10 million people in employment other than government.
Because of the present state of the economy it may well be that government may call on the World Bank and IMF for initial support for the plan but with full Government commitment that support should be forthcoming and investment funds should roll in within a short time and the economy should expand at around 10-20% p.a. initially.
There will most likely be a need for advisory and educational services because of the present lack of skills and expertise. Even the Police Force would need to be retrained to move away from partisan practices and provide a free and fair service.
One should appreciate that this will not work in bits and pieces, it is rather an all or nothing solution.