causes-inflation-zimbabwe_2bd83b50523eb190

We wonder why our economy is collapsing daily

 

Hon R M Simango

The problems which confront us today are unprecedented , they have No counterparts in human experience . Men search the pages of history for solutions , for precedents , but there are none . This , then , is the ultimate challenge and that’s I’m saying :

MUGABE DESTROYED THE REVIVED ZIMBABWE ECONOMY BY MDC-T DURING THE GNU (Inclusive Government of 2009 – 2013)

It’s now nearly 2 and half years since the General Elections of 31 July 2013 that brought to an end of Inclusive Government (GNU) that had ushered in outstanding economic progress (revival) and respite to Zimbabweans National and International. Unfortunately, with the current clueless failed Zanu-Pf Government, it is now obvious to all serious National and International observers that the 2013 General Elections were perhaps the most manipulated and rigged Elections ever before in Zimbabwe Election History.

Since 1980 when Zanu-Pf was alone in Zimbabwe Government, we experienced 29 years of poor Governance, high Corruption, injustice of the Rule of Law, Partism of Government programs and projects and also Soaring Inflation that lead to every Zimbabwean to be a billionaires BUT the Inclusive Government (GNU) brought price and fiscal stability , direction to Government programs and projects and also rapid economic revival that brought the suffering Zimbabweans hope back.

Statistically, this was most clearly demonstrated by the Zimbabwe Revenues to the State which expanded from just $220 million in 2008 to $4.8 billion in 2013. This is clearly unmasked that the Inclusive Government (GNU) which included President Dr Morgan Richard Tsvangirai as Prime Minister of the Inclusive Government (GNU) achieve its materialism economically but the current clueless failed Zanu-Pf Government devastated and destroyed the revived Zimbabwe Economy by MDC-T during GNU (Inclusive Government)

Vendor selling fruit is Harare CBD
Vendor selling fruit in Harare CBD

Zimbabweans National and International remembered with nostalgia the fantastic times of the MDC-T in Zimbabwe Government but its all seems like a long time ago even though its only 2 years as given the dispiriting reality now around our economic tables. After the purported victory of July 2013, our economy lost no time in casting a vote of NO CONFIDENCE in the sinking Zanu-Pf led Government that had been imposed on Zimbabweans by ZEC.

Within some days of the end of the Inclusive Government (GNU) values on the Stock Market began to decline and are now barely quarter what they were in 2013 while more than $4 billion has fled our Market over the past 2 years which gives a gigantic blow to the Banking Sectors.

In the Banking Sectors, most Indigenous Banks rotten with patronage , insider loans , poor management due to Zanusim and lack of regulatory oversight by the Reserve Bank , have all but collapsed. Zanu-Pf clueless poor Economic Policies such as Zim-Assets and Indeginization stimulated to the Collapse of Zimbabwe Economy, Education, Health, Transport, Sanitation, Small Businesses, Tourism, Agriculture and Banking Sectors.

These immediate challenges have been further exacerbated by the resumption of demands for the transfer of Government Assets to Politically connect Zanu-Pf Individuals and Ex-Military and Military Officers under the guise of Indeginization. In the past 2 years, 60% of our Commercial Banks have either been placed under curatorship and OR liquidation with the loss of over $3 billion of Zimbabweans’s savings and income. The flight of capital, loss cash circulation at the Banks and the liquidation of National and International Investments have resulted in a Cash Crunch that in paralyzing the Private Sectors, exacerbating the Closure of Companies and inhibiting Economic Activities throughout the whole Country.

It seems as if the clueless failed sinking Zanu-Pf titanic has learnt nothing from its 35 years in Zimbabwe Government but only learn Corruption and Killing innocent Zimbabweans who are fighting for Democracy in Zimbabwe. This lack of understanding and ignorance of Economic Principles, the unjustified and unbudgeted expenditure in 2014 and in 2015 have pushed the National Budget from the surplus achieved during each of the years of the MDC-T control of the fiscus, to over $1 billion in 2014 and a projected $2.5 billion in 2015. This means that the Current Zanu-Pf Government had incurred a totally unsustainable budget deficit of 33% of expenditure in 2014 and it should be noted that this is approaching 41% in 2015.

This is totally unacceptable because it violates the fundamental principles underlying the IMF’s Staff Monitoring Programme (SMP) ,which was negotiated under the Inclusive Government (GNU) and was signed by Mugabe in 2013.

The consequences of this accelerating collapse of the Zimbabwe Economy are extremely grave because unemployment has reached record highs of 95%, disposable incomes have declined and the State is unable to meet its day to day needs for it to be effective in delivery services to the suffering Zimbabweans National and International because they are failing to meet their basic needs.

THEN I BELIEVE THAT MUGABE DON’T CARE ABOUT ZIMBABWEANS

If Mugabe cares, he did not deserve to go on leave this year as he had failed to discharge his duties. Anyone who still believes that Mugabe and his clueless failed

Zanu PF will bring solutions to the country’s immense Socio-economic and political problems is no different from a child who believes that Santa drops gifts through a house chimney. It is clear that the current ruling failed party and its leader have abandoned the country It is unforgivable that Mugabe ups and leaves the country at a time when his compatriots, the pensioners and civil servants are unpaid.It is shocking that someone takes a sabbatical from the current affairs of the State at a time when it is burning with clear collapsing signs. This is the time he needed to show direction and unmasked his leadership qualities, but instead he pays himself a bonus and all the trinkets he wants then goes away. That’s ridiculous and unacceptable indeed. Mugabe was more concerned about problems within his sinking Zanu PF titanic party than problems facing ordinary people of Zimbabwe.

Fellow Zimbabweans, let’s wide open our eyes and see the unseen that the MDC-T is having to its coffers and lets Completely Transformed the current failed clueless Zanu-Pf Government for us to return to GNU (Inclusive Government) scenario as MDC-T will revive the Collapsing Economy.

United we Win
Divided we Failed

MDC-T : Equal Opportunity For All
MDC-T Chipinge West Constituency
Hon R M Simango

patrick-chinamasa-2

Zimbabwe trade deficit widens to $3 billion

ZIMBABWE’S trade deficit in the 11 months to November last year widened to $3 billion, an indication that the country continues to rely on imports as local industry remains depressed.

BY MTHANDAZO NYONI

According to data released by the Zimbabwe National Statistics Agency (Zimstat), Zimbabwe posted a $3bn deficit in the 11 months to November, compared to $2,97bn in the previous corresponding period.

Trade figures showed that exports amounted to $2,5bn against $5,5bn imports, indicating the country’s continued reliance on imported goods as local industry remains depressed.

However, the government had predicted a $3bn trade deficit for the whole year. Exports in the period under review were dominated by gold, tobacco, nickel and diamonds, while imports comprised mainly of fuel, medicines, maize and vehicles, among others.

Finance minister Patrick Chinamasa has previously said the trade deficit reflects, among other factors, the country’s over-reliance on foreign goods, most of which can be produced locally.

These goods include grains, foodstuffs, chemicals and pharmaceutical products, among others. In his 2016 National Budget statement, Chinamasa said the continued depreciation of the South African rand against the United States dollar had undermined the competitiveness of Zimbabwe’s exports.

The rand plunged to new depths yesterday reaching 17,9169 to the dollar with Zimbabweans increasingly preferring the US dollar over the South African currency in business transactions and as a store of value.

In the outlook, exports are projected to increase to $3,7bn this year up from $3,4bn projected in 2015. Chinamasa noted that imports were projected to marginally decline to $6,2bn in 2016 from $6,3bn, attributed to the measures that were put in place to manage the unfair playing field imposed by some cheap foreign products.

However, Zimbabwe’s exports to South Africa, the country’s largest trading partner, jumped 102% while imports to that country dropped 4%.

-Source: Newsday

Farmer

Do you really have to stay on the land to be considered a farmer?

There is widespread consensus that passionate farmers should stay on the land. Some of the advantages being that you can connect with your land and commodities.

BY CHARLES DHEWA

You can also cultivate strong relationships with fellow farmers and make prompt decisions on what needs to be done. However, an increase in the number of Africans living in the Diaspora and urban centres who are now investing in agriculture, presents a new agribusiness model. The way technology is transforming communication and relationships can be extended to promote remote farming.

In Zimbabwe, people who own farms or pieces of land while also working in urban areas have been derogatorily referred to as “cellphone farmers”. White former commercial farmers were able to stay on the farm almost full-time because they had strong support services in the form of banks and inheritance. On the other hand, most blacks who have moved onto farms have had to start from scratch due to lack of support services. Those formally employed have had to hold onto their jobs as a fall-back position while also trying to finance agricultural operations. The fact that a big number of them have succeeded in juggling formal employment and farming shows anything is possible.

Separating the business from the owner

Absentee land ownership and use has become a good example of how a business can be separated from its owner for its own good.
One can be an employee somewhere and a shareholder in his farming business at the same time. As long as the business has a strong market, the owner can just co-ordinate resource mobilisation and implement plans. De-linking the farm from the owner gives the business an opportunity to stand on its own legs. In fact, your presence can be a potential burden to the business.

Like any other business, you don’t have to be an expert agriculturalist to exploit opportunities in the agriculture sector. The way you structure your farming business will make the difference. With proper management systems and riding on ICTs, you can receive real-time feedback from your farming activities. Your major role becomes that of identifying markets and relevant information for your agricultural products. If you become inseparable from your business, there is high risk of total collapse when something happens to you. The business should create its own networks just as you create your own networks. There is an inter-section between you and your business, but different spheres of influence.

A farmer in the current knowledge economy should be able to farm from anywhere just as someone can have shares in a Zambian company while staying in the United Kingdom or in South Africa. Business is no longer about physical location. Many African businesspeople do not stay in countries where they have invested, but their businesses continue to function in their absence.
Given a choice between being on the farm or on the market, in a competitive world, you would rather be on the market side from where you inform your farming business through monitoring market dynamics and advertising your products. It is on the market where you are fighting for space. On the production side, you already have land, water, livestock and other assets. The market is where you can get income to invest in labour, appropriate transportation as well as an appreciation of standards and market calendars.

Most smallholder farmers remain in subsistence agriculture because they are stuck on the farm. Their movement is mostly from point A to B as opposed to exploring markets C, D and other unfamiliar markets. They only travel from Mutoko to Mbare and back. This does not give them a wide market perspective. On the other hand, livestock farmers only know the local abattoir or mobile cattle sales. You can’t build a viable business on such limited market knowledge.

Leveraging networks

As an absent farmer, you can use your networks to manage your employees and introduce your managers to food chain stores and other market segments while you concentrate on following up. Your absence on the farm can positively create room for innovation. As long as you are there, the business will behave the way you want to. In your absence, workers are forced to innovate. Over the past few decades, most smallholder households who had a husband working in town and the wife doing agriculture in rural areas were able to lead a middle class life by taking advantage of their situation.

When visiting her husband, the wife would bring peanut butter for sale and the husband would use his networks to sell all the peanut butter for her. Income from the farming business was separated from employment wages and this went back to support farming operations.

The following tables show market activities at Lusaka-Highfield agriculture market in Harare from January to October 2015. A significant portion of these commodities were produced through absentee land use.

Produce supplied to Lusaka — Highfield market: January — October 2015

42 produce types were supplied to the market from January to October 2015 as shown below:

Among the 42 produce types supplied, tomatoes, leaf vegetables, onions and unshelled groundnuts were the only produce types that were supplied consistently. The rest where supplied inconsistently because they are seasonal.

The vegetables class earned 90,78% of the total estimated revenue. Tubers, field crops, gourds, fruits, wild fruits and others took up 6,15%, 1,78%, 0,67%, 0,54%, 0,08% and 0,001% of the total estimated revenue respectively.

eMKambo is now developing business models and mentorship programmes for farmers who want to farm from afar. More information can be found below:

●Feedback: charles@knowledgetransafrica.com/charles@emkambo.co.zw/info@knowledgetransafrica.com Visit websites: www.emkambo.co.zw/ www.knowledgetransafrica.com

Rural-Teachers-Union-in-Zimbabwe-protest-againist-the-Government-for-the-delay-of-salariesbonus.-The-protest-dispaced-by-riot-police-who-beat-them.-Pic-Shepherd-Tozvireva

Civil Service Pay Crisis: constitutional implications

 

In terms of the Constitution of Zimbabwe, the Supreme law of the land, there exists a social contract between government and the people. Every 5 years citizens go to the polls to elect the President and Members of Parliament. The President is mandated to appoint a Cabinet to assist him to run the affairs of the state. Once elected, the executive has a duty and obligation to provide public services as well as the needs of its citizens. Its a quid pro quo. In a democracy, if an elected government fails to provide for the social and economic needs of its citizens, it can be removed through the ballot. In an undemocratic society the government can be removed by popular uprising. In a despotic country the government can be removed by a military coup. This is how serious is the nature of the social contract between an elected government and its people. Luckily, Zimbabwe is a constitutional democracy.

The Bill of Rights is the cornerstone of our democracy. It provides for red rights, blue rights and green rights. Red rights are also known as political or civil rights. Familiar in this genre is the right to freedom of speech, assembly and association. Most people end here. Then there are blue rights, also knowm as economic rights such as the right to food, shelter, healthcare and employment. These are second generation rights. The third generation and last category of rights are called green rights. Typical in this genre are environmental rights. In Europe activists have taken this right as far as forming “green” parties or green movements.

This opinion piece focuses on blue rights and their implication on the labour market. As already indicated, blue rights are socio-economic rights. In regard to the labour, the right to a job is a human right. Hence the adage: labour rights are human rights. If according to the Zimbabwean Constitution, employment is a right it goes without saying that salaries are a right which should be paid as and when they are due. Failure to pay salaries as and when they are due clearly violates the Constitutional rights of workers. In this regard, government acted ulra vires the Constitution by failing to pay December 2015 salaries on time. Government violated the rights of workers rights to a decent wage and a decent life. Workers were not able to celebrate Christmas with their families because they were deprived of their right to do so by the witholding of salaries by government. For some who are Christians their religous rights were violated as they could not travel to shrines or places of worship of their choice to celebrate the birth of Christ. Whichever approach one uses to statutory and constitutional interpretation, I argue that the failure by governnent to pay December salaries is in clear violation of the Constitution. Human Lawyers have a job cut out for them.

Then there is the question of bonus. Is it a right or prividge? Since 1890, central government has never neglected paying bonuses. The payment of bonuses had become an entrenched practice. A tradition. In the past some witty musicians would compose and release bonus songs. The late musician, Patrick Mukwamba’s “Bonus” track made an instant hit on the local music charts in the 1980s. Such was the popularity of bonuses as to become part of the civil servant’s end of year compensation. An income earned by past practice for such a long time cannot be taken away unilaterally as bonuses were a legitimate expectation. I therefore beg to differ with those who hold a contrary view. It is my humble submission that at law the payment of bonuses had become an acquired right given the historical trend. This position should continue and I challenge jurists to pursue this matter to its logical conclusion.

Legal and constitutional matters aside, we are worried about fiscal sustainability. Fiscal sustainability is a derivative of what is called the fiscal stance. This refers to the state ‘s ability to collect fiscal revenues to meet its statutory obligations. The collapse of GDP growth from the Zim Asset target of 7% to 2.7% is a cause for serious concern. The shrinking of GDP growth implies the shrinkage of potential revenues. An analysis of governnent revenues will reveal that PAYE and Corporate tax has been declining over the past years. This is due to company closures and retrenchments. Effectively, government is now resting on one revenue pedestal and that is VAT. Given the level of imports and consumption, government has had to rely on VAT for most of its financial expenditure. Because government is now in fiscal coldron, it will have no choice but to increase VAT during 2016. Government is between a rock and a hard place. Raising VAT will provoke a public outcry. Failure to raise VAT will collapse the government as it wont be able to pay uniformed forces and civil servants. We can therefore see that the budget is nothing more than a recurrent expenditure tool. In November 2015, I warned that the budget is a pie in the sky and now chickens are coming home to roost.

Domestic revenues are part of a fiscal diamond comprised of official development assistance and foreign direct investment. In the absence of the other pinnacles of the fiscal diamond, it is crystal clear that government is not going any far with domestic revenue alone. That is the reason why Zimbabwe must open the doors for foreign direct investment. The country needs new money to boost money supply. Unlike the Zim dollar error where government could get seignorage revenues from printing money, Zimbabwe cannot create credit in a dollarized economy. The only game in town is FDI.

Zanu PF often asks the right questions but choose the wrong answers. For example on indigenisation the solution is not 51%. The indigenisation policy can be likened to an elephant in the living room. The indigenization policy is a red flag to investors. Recently there were serious policy inconsistences between 2 government ministers over the so-called clarifications on indigenization. The indigenization policy has been rationalized by:
(1) introducing empowerment credits to promote compliance (2) Empowerment levy on non-compliant companies (3) insistence on 51% in the resource based sectors (4) fencing off reserved sectors from new entrants.

These changes will not work. The indigenization policy is an outdated policy bordering on resource nationalism and an undertone of expropriation. What is required is a complete repeal of the law. No amount of tinkering will make the indigenization policy acceptable to investors. Elsewhere, indigenization attempts failed dismally. In South Africa they changed the ill- fated black economic empowerment program to the so-called broad based economic empowerment program. Instead of empowering the majority, only few connected blacks benefitted. The likes of Ramaphosa amd Sexwale. The BBEE program has bred a corrupt public tender system which is now deeply rooted. The same applies to Namibia and Botswana. They abandoned theirs midstream. What we ought to realize is that investors now consider Africa as the last frontier. There are 2 types of investors. The first category is called General Partners (GPs) which refers to Fund Managers who invest on behalf of family funds, endowment funds and hedge funds among other private funds. The second category of investors are called Long-term Partners (LPs). These are actually the owners of capital. In one of my investment promotion missions in London I was priviledged to address both the GPs and LPs. Every investor spoke glowingly about the opportunities in Zimbabwe. The human capital, the relative peace and stability and dollarisation. Almost all the investors said there is no way they could use borrowed funds to invest in a place where they are forced to cede 51% and lose controlling interest. They were talking business. And for the benefit of readers, London is probably the citadel of foreign capital. The response to indigenization is a big NO.

China is different. The Chinese are after minerals, oil, gas and agricultural commodities. Paradoxically Chinese companies are exempted from complying with the provisions of the indigenisation law. As for China itself, they abandoned their communist ideology. They adopted socialism.with Chinese chacteristics, a euphemism for market liberalism. The Chinese abandoned indigenization and welcomed foreign investors with no conditions attached. The result was a floodgate of investment from America, Europe and Taiwan. Taiwan businesses enjoy protection in China despite the One China Policy. Even the Asia-Pacific geo-politics has not changed China’s open door policy. The conflictual interests in the South China Sea has not affected foreign investors because their investments are.safe. In China they say that the colour of the cat is not important as long it catches the mice. To show how serious China is with FDI, China signed an MOU with Singapore in order for Singapore to build a new city ShenZheng based on the special economic zone concept. Shenzheng is on the southern part of China at the border with Hong Kong. Singapore built this town and administered it for 30 years. The town was handed over to China very recently. Today China is the second largest economy in the world. Thanks to it ” open -for -business” policy.

Zimbabwe is regressing by sticking to the discredited indigenisation policy.

So for as long as government buries its head in the sand, and pretend that indigenisation does not scare investors, the economy will not recover in 2016. In the absence of reforms, we should expect the deepening of the current fiscal and macroeconomic crisis which is unabated.

The jury is still out on the question why government cannot see this impending trajectory. Tendai Biti wants said money does not grow on trees. This wisdom is apparrently eluding the government.

Government has little room to manouvre. Apart from raising VAT, retrenchment of civil servants or cutting salaries is inevitable. 2016 is the year of tightening belts. Let us wait for legal battles to begin as the constitutionality of government failure to pay civil servants is brought to the foreground.

Source-ZImpolicy Dialogue 2016

Zimbabwe's President Robert Mugabe (L) and his Chinese counterpart Xi Jinping shake hands during a signing ceremony at the Great Hall of the People in Beijing August 25, 2014. REUTERS/Diego Azubel/Pool (CHINA - Tags: POLITICS) - RTR43NIT

 How is Economic Policy determined and implemented in Zimbabwe

 

There is a basic conflict in forming a consistent economic policy. On the basic level there is a pure economic theory, e.g. about the unity and how it eliminates the transportation costs, how monopolies will exploit the market, etc. Most of theories can however be normative as it is usually first time people have to deal with things like political and administration decay and thus there is no way the theories about it can be based on direct evidence. But ultimately it should be possible to prove them with positive economics once the reform has happened, if one can keep the ceteris paribus.

On the second layer there is the political level of different party ideologies concerning ideas about the nation, sovereignty, power, democracy, class analysis and structure together with income inequality and taxation and finally the political process of election. It is quite hard to make contrasting examples about that for ZIMBABWE as both major parties are like a Sibblings spending time on each other’s throats pretending to basically support market freedom and democracy. Old MDV used to believe that the working class should co-ordinate the economy through trade unions, now it is a pro single market party supporting a stake-holding in society, that encourages greater participation of individuals. ZANU PF is considered the national unification party opposing colonialism ,patriotism first then co-operation being one of their aims. Both parties are however so far from reality that they don’t realise there is a great need for an ideology for getting re-elected, and they must just deal with the day to day running of country and its future

Third level is the opinion of public and media. Their views can differ considerably from the first two. For example the reason many people don’t want ZANU PF is that they THINK that it has failed and have nothing to offer. In such a mind they spend time aiming to remove it from power thereby neglecting policy formulation. Their target is to remove Mugabe. But they have no plans post Mugabe.

There are some main areas of economic policy that each government must adapt in some sense. All the policies must allocate the scare economic resources through the economic system. It can either be done by the market – private sector or government (public sector). ZANU PF have encouraged the market allocation based on INDIGENISATION ideas of all markets tending towards a stable equilibrium unless there is a bureaucratic intervention. Thus ZANU PF have privatised many national industries, apparently so successfully that several countries are copying them.

Economic policy has also a distribution function. It might be that the efficient markets may not produce an equitable distribution of income. That is why economic policy now includes transfer payments (transferring money from one sector to another through the means of taxes, like pension schemes to help elderly). Progressive taxation is also used to make the distribution of income more equal. Capitalist system tends to work best when there are some very rich that lead the economy and thus help the poorer ones as well. Thus gvt has made the tax system gradually less progressive. Pension schemes are no longer in the public contents and private pension schemes and such are not allowed to operate. But concerning public opinion as more people earn below the minimum wage that above that (distribution is skewed), so pubic favours progressive taxes. I talked about the ZANU PF party ideology, MDC has now come quite close to that, but they still prefer to make the rich pay less to restore funding they promise investment without national benefit as long as there is industry they don’t care who benefits In economic terms distribution is carried out by economic This has the effect of increasing the supply curve, which causes dead-weight loss causing from overproduction, unless there are externalities to be considered. On all these cases above there were clearly negative externalities. People don’t realise that they need education, so education has positive externalities, the same way as health.

Policy should stabilise the economy. We need to focus on that stability Thus the government have tried to the foreign investment more. Critics have said that is just to reduce the investment statistically, but in reality they have helped to reduce the poverty trap arising when the benefits are shared with the locals Price stability should also be pursued, that means eliminating inflation. This one of the main aims of government policy today. It is argued that high inflation redistributes income from fixed earnings (i.e. pensioners) to wage and profit earning people. It causes instability in economy and thus reduces investment. Although it does help to make fairer wages (it is hard to lower wage, but it can be left the same and thus in real term it can lower). But the public opinion, specially that of the industrial sector, is that the high interest rates are bad and unpopular. Also gvt ideology of 52% makes them reluctant to use fiscal policy as they think it causes inflationary spiral making community dependable of fiscal injections that are inflationary and cause dead-weight losses.

Policies should also make the economic growth stable and self sustainable. Trade cycles with its booms and busts cause again instability in markets and discourage investment. They also increase unemployment in down turns and inflation booms

The tools the government uses mainly are the fiscal and monetary policies. Without getting into much detail the fiscal policy was developed by Keynes and implemented after the second world war. It deals with the management of the aggregate demand. In times of recession government should run a budget deficit and borrow more in order to increase the GDP to a multiple effects (government investment being re-spent and causing even more demand). This is caused a loose or expansionary fiscal policy, tight fiscal policy is concerned with rising taxes to constrain the economy. It seems now that the government is going to use the expansionary policy this year, but only because the elections are coming and this is more popular. MDC party ideas are more favourable to fiscal policy. PF party policies are none existent Over-expansionary fiscal policy with high PSBR increases the national debt and the interest rate that has to be paid on national debt. So MDC has to cooperate with ZANU to have their policies implemented or they are just a white elephant. It is very clear they will no win any election despite the wonderful policies they have

Monetary policy is the one that the government deals now with most of the time. It consists of managing the money supply and altering the interest rates through the Open market operations and such. The Bank is responsible for carrying out this policy. But it will be difficult since we do not have our own money.

Prices and incomes policy (direct control on wages and the prices are not allowed to rise) were also used a while ago to control inflation. The policy proved ineffective in the long-term, The latest invention is the supply side policy meant for making the markets (especially the labour market) more flexible and efficient in order to increase employment and foreign investment to ZIMBABWE THE need for Esstern companies to rescue our economy hss made us ignore the health and safety of workers Foreign managers have treated workers as slaves this should still be monitored and our labour laws must be respected

Unfair trade practices can be controlled by the opposite of this policy – the regulation of industry and commerce(competition policy). The economic theory tells that the monopoly restricts output and rises the prices, thus earning monopoly profits and reducing the welfare. On the other hand it can achieve considerable economies of scale. Public opinion is against monopolies as it seems as they are unfair and exploiting. Gvt policy has been somewhere in between, monopolies are only allowed when there are obvious economies of scale to made or the industry is a natural monopoly.
[1/13/2016, 3:36 AM] Mutyasira: Welfare, although mentioned above, can be viewed as an independent policy. It has no part in Zimbabwe at present. Social security system that is basically the national insurance, whereby everybody are paying something and when a person becomes s/he will receive benefits. On the other hand there are welfare services like Nasa they are not efficient as gvt claim and thus reforms have been conducted and a further voucher scheme is proposed.

Exchange rate policy is also sometimes used to keep the currency at a stable level. But we are toothless bulls no currency to control Here there are many conflicts here – stable currency encourages investment, but when the exchange rate is too high exports sour and industry will decline. Politically and at public level strong dollar is something desirable, in America but industry prefers lower. And thus the Dilemma Zimbabwe has It becomes too expensive in the region with nothing to attract the region to come the economy is running a balance of payments deficit that could damage it.

Previously the government used to make all the policies, now the size of government has grown too much, so there is a cabinet of about 68 ministers, who lead the most important departments. They debate all the important policy issues. Models of economic policy making. Zim is different because government is powerful and thus can force unpopular laws through easily. Electoral preferences of parties are the images of their leaders. The government is also growing in size, so it needs a co-ordinator. Also the heads of department are more busy and they have no time to get involved in checking ideas from other stake holders.
Ideas to bolster economy must be accepted even if they come from an opposition member. The country bleeds and the people suffer while leaders tighten their grip on each others throat and not economy.

If only we take our gvt jobs as service not work we will surely serve. If we put our ears on the ground we will hear the speed our enemies are marching towards us. But we too high up to bend down so we should prepare for a nusty thud. What aims leaders more than a gun is the bad economy. There are no friendly fires in economic shoot out.

We need to put on some breaks and look to the people and hear their grievances. Implement policies towards their directions.

 

Dr M Mavaza. PHD. IIA Zim

Vazet2000@yahoo.co.uk.