A recurring incidence within monetary policy is that it swings from the extremes of significance to insignificance without those speaking on it actually acknowledging its utility. This is one aspect of the suffrage of the economics profession to find its place in national discourse, and ultimately influence political perceptions too. Over time, technical economic analysis has become captive to the expedience of politicised necessity. Politics plays to narratives. Thus, technical economic analysis has become only relevant to supporting or refuting the battling narratives of the day.
Perhaps this is why a parliamentarian can dismiss a policymaker’s actions as “voo-doo economics” when a few years before that same parliamentarian resorted to the same actions when he was a policymaker. The narrative shifted, though the economic fundamentals may have not. That could also explain why some media may portray Zimbabwe’s currency crisis to have started in 2000 with Mugabe’s violent land reform programme, when years before then the economy had endured significant currency shocks, which amongst other events, subsequently led to the pressure on Mugabe’s administration to yield to a fast track land reform. One vantage of observation serves a greater narrative than the other. But, this is how empirical study of economic fundamentals loses its place in discourse.
Most harmful from this abuse of economics is that national discourse eventually becomes vacuous of technical contribution from professionals that deal with real data; at the macro-level professionals such as asset managers, bankers, practicing economists, and at the micro-level actual businesses and professionals ranging from engineers, contractors, health care experts or whatever sector that deals with day to day fundamentals. These professionals simply cannot keep pace with the brisk political narratives to find their place in discourse. Worse still, whatever empirical findings these professionals may offer, whether right or wrong, will soon find their professional input characterised as political allegiance, as it either supports or refutes battling narratives.
Unfortunately, political parties in Zimbabwe are not the most erudite or technically trained. A consequence is that battling narratives become superficial to satisfy immediate laymen sentiment. So then national discourse focuses on engaging futile arguments because they are politically pressing.
Bond notes, themselves, were never really as important as politicised narratives made them to be. To date, they are near 5% of total money supply. The structural reality of which they meant to ease, however, was far more pertinent. But, structural discourse is hard to sustain at the forefront of political narratives. Maybe it is boring and too complex to put a firm political thrust behind it. So, what today is perceived as a currency crisis should have been technically explained and understood as a structural crisis that preceded what became visible in the shortage of foreign currency. Since dollarisation, the economy was structurally inefficient and exposed to structural corruption. Yet still, it is the partial of resolution of bond notes that remains prominent.
Indeed then, the central bank’s monetary policy has become much more prominent than it actually should be. Interestingly, while partisan parliamentarians hammer Mangudya on the futile topic of bond notes, he receives less credit than he actually deserves for directing much of his monetary strategy to subsidise structural concerns that parliamentarians should be more emphatic about. Forex allocations to fuel would not be so significant if the railways were functionally moving cargo and passengers in a local and regional network. Electronic balances in the banking system would be backed by productivity if power tenders were actually awarded to delivering contractors. It would not really matter whether or not $500 million of bond notes boosted exports if the legislative overlap in mining, agriculture, and industrial compliance were not so arduous for investors who would otherwise generate exports. These are all structural reform matters, and should precede any currency reforms anticipated from the central bank.
But due to political narratives, this is how monetary policy swings from the extremes of significance to insignificance without those speaking on it actually acknowledging its utility. In a public hearing, the Governor Mangudya said “We’re all culpable, why does Parly pass the budget knowing fully well about the government’s deficit? Where do you think the money comes from?” If Governor Mangudya deserves to be shamed for bond notes as Portfolio Chairman Biti implies, then parliamentarians should be embarrassed in their title as Honorables. It is the structural ineptitude of parliament that places more pressure on monetary policy.
Zimbabwe’s truth is that it does not have a currency crisis. It has a structural crisis. Politicised narratives have sustained the former. It is false hope to expect much from currency reforms, until structural reforms that can only be enforced by a literate parliament are activated.