FORUM MEETING: BULAWAYO
Introduction
Zimbabwe has never been in such an economic crisis as it is at present. Never before in our history have so many people been out of work, never before have our people battled to survive as they are now. The Z$ is a worthless currency, its spending power is minimal.
ZANU blames the economic crisis on drought, world recession, apartheid and the colonial legacy. Others blame ESAP for our plight.
Tonight I want to leave you with 2 principal thoughts:
1. ZANU (PF) is responsible for the economic plight we are in more that anyone or anything else; and
2. having got us into this mess, having created this mess, ZANU is not able to get us out of it.
ZANU created this mess
People are only given strong, unpleasant medicine when they are sick. ESAP is the strong, unpleasant medicine prescribed for economies that are seriously ill as ours was in 1990 and still is. Botswana does not have ESAP because it has pursued sensible economic policies over the last decade.
ZANU, however, has in 13 short years, almost destroyed what they themselves described in 1980 as the jewel of Africa. How have they destroyed it? I will give you a few examples:
1. By their ruinous half baked socialist policies.
ZANU’S policies of:
– socialism
– tight central Government controls
– hostile attitude towards external investment
– high taxation rates
effectively prevented foreign investment prior to 1990.
2. ZANU has actually promoted disinvestment. Many of you no doubt wonder how it is that ZANU (PF) and quasi ZANU (PF) organisations such as the Development Trust of Zimbabwe have acquired massive interests and shareholdings in companies such as Tregers, National Blankets, Woolworths and Nuanetsi Ranch. Through their control of the Reserve Bank, and therefore our foreign exchange reserves, they have been able to buy local companies, or major shareholdings in local companies for a fraction of their real worth.
External shareholders have only been too delighted to be paid in foreign exchange for their shares, even though they have been paid in some cases only 30% of the worth of the companies.
In the process ZANU and its leaders have acquired great wealth but at enormous cost to the country. The damage to the nation’s investment climate over the years is almost incalculable. No investor worth his salt is going to invest in a country where existing foreign investors are disinvesting and making great losses in the process.
The result of these ridiculous policies is that most people are poorer now than they were 13 years ago, we as a nation have missed out on the boom economic years of the “80’s” and the country is in a serious economic crisis.
ZANU (PF) are not capable of pulling us out
One of the greatest potential tragedies facing Zimbabwe today is that most people have their heads in the sand and are just hoping that somehow Mr Mugabe and ZANU will be able to extract us from this mess. I fear that the Nation may have to sink even further into the mire before people realise that as long as we have Mr Mugabe and a ZANU government we are doomed. I do not believe that ZANU is capable of pulling us out. Why? I advance the following reasons:
Like it or not ESAP is the medicine prescribed to us for economic recovery.
The harsh reality is that if we hope to receive the support of the international community we must continue with ESAP.
But ESAP is a recipe and all the ingredients must be used if it is to work. Leave out one or two of the ingredients required for a cake and you will find that you have a bigger mess at the end of the baking effort than one had at the beginning. ZANU (PF) has left out 2 vital ingredients:
1. It has failed to cut down on the size of Government and Government expenditure. ESAP will only work if Government tightens its belt first.
For some years ZANU has been urging people to tighten their belts but it has not tried to do so itself.
– The President lives like a King – travels to N. Korea (where we won’t get a cent of investment) on an Air Zim Boeing 707.
– When he is in Zimbabwe he has an 18 vehicle entourage.
– 2 Vice Presidents. Spending 4 million on one of V.P.’s houses in Harare
– Cabinet “reshuffle” a joke. Elevation of 8 Governors to full Ministerial stations has effectively increased size of cabinet and expenditure.
– ZANU allocated Z$20 million to itself and this is on top of the vast cost of the so called meet the people visits by the President (thinly disguised political rallies) and ZANU’s investments – where did ZANU get the money to
– build its luxurious H.Q
– buy major shareholding in Tregers, National Blankets, Woolworths, the Kadoma asbestos factory?
Where do the profits go?
In essence there is a rat in the kitchen. Whilst we all work hard by day the ZANU rat devours our wealth by night. At a time when everyone else is suffering ZANU cynically spends money on itself and its leaders’ luxurious life styles. The President’s recent calls for employers to reemploy workers now that the drought has ended reminds me of Marie Antoinette’s alleged statement “let them eat cake”. Mr Mugabe can only be dangerously out of touch with the critical state of the Nation to make a statement like that.
Worse still corruption is rampant in the country. What I have mentioned above is the money we know has been taken by ZANU and its leaders. What about the money which has been drained from our economy by corrupt hidden means?
Everywhere one turns one hears of corruption – the LORAC scandal, Zimpapers, CSC are the tip of the iceberg. Why is it that the names of politicians involved in the LORAC scandal have never been made public? The reason is simple; those involved are too close to the heart of power and the ZANU edifice will come tumbling down if their names are revealed.
The point is that as long as ZANU is allowed to drain the country of its life blood through lawful and unlawful means, the economy will not recover.
ESAP will not work unless money is put in the hands of the productive sector to create wealth rather than in the hands of those who steal it or waste it as ZANU is doing.
2. ZANU is dangerously out of touch with the World’s attitude towards investment. The success of ESAP depends to a large extent on Zimbabwe attracting significant foreign investment. ZANU naively thinks it will attract investment by tinkering with the investment code. In reality its recent actions have killed most prospects of investment. Within a couple of weeks of Dr Chidzero announcing new investment policies in April this year ZANU did the following:
A. Vice President Nkomo announced at the Trade Fair that ZANU would take white and asian businesses if they were not shared. The following points need to be made in this regard:
– he could not have chosen a worse occasion or time to make this statement
– the Trade Fair is the one time in the year when Zimbabwe has the highest number of potential investors in the country, attentively listening to the voice of Government.
– any talk of compulsory acquisition of any business makes foreign investors look elsewhere.
– the irony is that ZANU itself directly or indirectly controls a much greater proportion of the economy than local whites and asians – DELTA, ASTRA, IDC, Tregers, Zimpapers, Hunyani, Zimbabwe Commercial Bank of Zimbabwe, The Reserve Bank, Wankie Colliery, Zisco, Zesa, CSC, NRZ, Forestry Commission, ZBC, Zimbabwe Tourist Development Corporation and Air Zimbabwe.
The fact of the matter is that the Zimbabwean economy is mainly controlled by ZANU (PF) and multinationals. If there is any doubt let me give you 3 very vivid examples:
1. Sansole and Delta
2. Dlodlo and CSC
3. House in Magpie Road, IDC and ZESA – lights.
B. 70 farms were designated many of which are productive and occupied by their owners. Land is an emotive issue. But like it or not Zimbabweans have to make a choice – they cannot have investment and compulsory acquisition of land at Government determined prices. Zimbabwe will not attract significant investment as long as potential investors fear that their investments will be taken over.
C. The President made a well publicised trip to N. Korea. N. Korea is a pariah state in the world. It has refused to sign the nuclear non proliferation treaty. It consistently violates human rights.
We cannot expect investment if we continue to foster such relationships. The trouble is that deep down Mugabe admires KIM ILL SUNG and the rest of the world knows it. No sane investor is going to risk his money in a country run by a person with such totalitarian and megalomaniac tendencies.
The combination of half hearted investment policies and ZANU’S recent actions mentioned above mean that we will not attract the investment required to make ESAP work.
I hope I am wrong in my assessment. I genuinely do. The political reality is that the next election will probably only be in 1995 and much more damage can be done to the economy before then. Only time will tell.
But I challenge the Zimbabwean electorate to watch ZANU to see whether there is any sign of them changing. Your first indication will be soon with the announcement of the Budget in July. Let us see whether:-
– the Ministry of National Affairs is abolished
– the Cabinet vote is slashed (indicating a radical cut in the size of the cabinet)
– the President’s Office’s vote is slashed (indicating that he too will be tightening his belt)
– there is any indication that Government expenditure will be cut from the top down.
Our economy is terminally ill – we need radical measures to save it not tinkering. Watch to see whether ZANU is up to the task. The Forum’s policies are what is required.
I do not have time tonight to speak of the Forum’s economic policies in detail.
I would like to speak briefly about some of the Forum’s key policies:
1. We will cut Government expenditure starting at the top and work down
– Cabinet will be cut to 14
– there will only be 1 Vice President
– Deputy Ministers posts will be abolished
– Governors will be cut from 8 to 5
– the President’s entourage of 15+ cars will be cut
– State visits will be reduced dramatically
– taxpayers money will not be used to fund the ruling party
– once the Nation has seen that sacrifices are being made at the very top the civil service will be reduced proportionably.
2. The Forum will reduce the budget deficit and simultaneously indigenise the economy by:
– selling off parastatals and Government’s shares in public companies to the people
– mechanisms will be implemented to ensure that when shares are sold preference will be given to disadvantaged members of society including blacks, women the disabled and ex-combatants.
3. The Forum will improve the overall investment climate by:
– dramatically reducing taxation
– introducing a variety of new measures to make Zimbabwe more attractive to potential investors
– bringing an end to statements and policies such as grabbing businesses.
The policies have been designed by leading economists and business people and welcomed by leading economic analysts.
These policies alone will mean that ESAP has a much greater chance of succeeding. In any event these policies will have the effect of putting more money in the pockets of ordinary Zimbabweans and will give them more control over their lives.
But time is running out. The time for kidding ourselves that things under ZANU could come right is past. I am convinced that unless we act boldly now to stop the rot much of what we hold dear in Zimbabwe will be lost for ever.
This is a great country. We have wonderful, hard working and intelligent people; we have magnificent resources and an infrastructure which although creaking badly is not beyond repair. If we act boldly now Zimbabwe could once again become a great Nation. The Forum is the only option we have and its success or failure depends on the support you give it.