Towards the economics of pain & patience

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Paddington Masamha

Economic policy in Zimbabwe is currently guided by the Transitional Stabilisation Programme (TSP). The reform agenda is expected to run from October 2018 to December 2020. The current economic blueprint is guided by a very lucrative theme titled, “Towards a Prosperous & Empowered Upper Middle Income Society by 2030”.

It has largely been argued that the new reform agenda will face the same fate of its predecessor blueprints such as ZIMASSET. However, the current government’s TSP publicity campaign keeps gaining momentum with each day we are approaching December 2020. Regrettably[PM1] the Transitional Stabilisation Programme (TSP) in my opinion has two key limitations. The original structuring of the reform agenda and the implementation processes of the TSP is plagued with the following concerns;

1 Disproportionate austerity measures

2) Doctor-patient binary

The TSP largely manifests the tremendous power that the current government has on its economic inhabitants, financial hegemony and apparent policy dictatorship. The implementation of the TSP revenue policy prescriptions has largely been decorated with ‘instant’ or ‘immediate effect’ clauses.

As such, the fiscal authorities have thus adopted a hegemonic strategy to achieve their goals without necessarily debugging the underlying issues behind the Zimbabwean economic conundrums. Gauging from the public discourse currently being utilised by the monetary, fiscal and political authorities; there is no doubt that our government has adopted the, ‘I know best, you have to follow’ syndrome. In the interest of saving the publisher’s limited space, the researcher will merely isolate two major incidences. For instance, the Minister of Finance and Economic Development’s fiscal dialogue at Star FM where he harshly responded to some genuine questions by the radio presenter largely demonstrates the hegemonic force being adopted by the honourable minister. Specifically when asked why fiscal authorities did not give car importers enough time to prepare for the payment of duty in foreign currency, the Minister harshly said, “hatina kuvatuma” (meaning we did not send them to import the cars). One can choose to play down such a vehement reaction but an additional public discourse which confirms my argument will suffice.

This January 2019, the Minister of Finance and Economic development has encouraged Zimbabweans to endure the pain of fiscal austerity. Whilst addressing the European Parliament, the Minister unequivocally declared that the TSP involves some ‘painful measures’ so as to restore the national budget to controllable levels.Using the doctor-patient analogy, the Minister emphasized the issue of painful reforms. “These measures are those of a doctor performing a lifesaving operation. They cause pain, but the pain is the only thing that will lead to a recovery,” these were the words of the Minister. Given this public international discourse the obvious questions which lingered in my mind were to do with identifying the doctor, the patient, the disease diagnosis processes, the prescriptions and the final recuperation of the patient.

The analogy of a surgical operation

From observation of medical surgical operations, certain key participants are noticeable. Obviously, the patient (where the surgical operation is being done), the surgeon, anesthetist and scrubbing nurses as the key theatre personnel. Imperatively, the chief of surgeon is the person who is responsible and accountable for the activities, operations and ultimate results of the theatre room.

At the end of the surgical operation and the patient recovery period, two major possibilities do exist that is either a failed or successful medical procedure. Practically within the theatre, surgical mistakes are a possibility whilst we also cannot rule out the probability of negligent behaviour by participants conducting the surgical operation. Some surgical failures might also be attributed to a failure by the chief of surgeon to assemble a competent team for the task at hand. One cannot end this discussion without mentioning the possibility of the patient being in a condition which is irrecoverable.

Who is the doctor?

The Zimbabwean economy is currently under an austerity surgery. The country’s austerity surgeon is the Minister of Finance and Economic Development Professor Mthuli Ncube. On the monetary front, the Reserve Bank of Zimbabwe Governor Doctor John Panonetsa Mangudya is a key figure within the austerity theatre room. Given that his monetary policy stance of maintaining that the bond note on a 1:1 parity with the US dollar is the main reason why the economy is moribund, one would not be wrong to visualise him as occupying the role of the anesthetist.

The obvious position which the reader has correctly guessed which is solely reserved for the President is that of chief of surgeons. One common language or discourse that these chief economic chauffeurs have preached is that Zimbabwe should brace itself for pain, but in their view the pain is just but for a season or momentary. Some pro-government analysts have even invoked the biblical case study of the children of Israel’s exodus from the land of Egypt to the land of Canaan.

There is absolutely no doubt that the Zimbabwean economic theatre is being manned by veterans. For starters, the chief of surgeon has been within the political field since the time of the liberation struggle, the anesthetist has an impressive record as a banker and the surgeon is without a doubt one of the biggest brains to have represented Zimbabwe in an international frontier. However, what baffles the mind in the interim period, is the general disjoint between the promises of prosperity and the economic reality of our dilapidating economy.

Who is the patient?

This is rather a debatable question. From the doctor’s perspective; the patient is the Zimbabwean economic inhabitants. Like any other expert, the surgeon has always reiterated the need for Zimbabweans to be patient and longsuffering. This position is corroborated by the Minister’s borrowing of the words of Margret Thatcher which say, “Yes, the medicine is harsh, but the patient requires it in order to live.’’

The fiscal authorities’ austerity measures are the anticipated antidote to our economic ailment. As the fiscal chauffeurs put it, the austerity medicine might seemingly be punitive but the only necessary corrective measure for the economy to recuperate. From the monetary front, the governor has reiterated that the bond note is not the problem.

Whether his sentiment passes the bond note value destruction and price erraticism litmus test is surely a discussion of another day.

Within the public domain, the assumption that economic inhabitants are the patients in need of a surgical operation is being resisted. Emanating from a political and economic front, analysts argue that it is the leadership which needs surgical operations. The chief surgeon is being nailed mainly for having over-promised and now under-delivering. Divergent views also give defences of saying Zimbabwean transition was at some point on course but the unfortunate incident of the August 1 killings reversed our previous gains.

Without contributing any specific answer of correctly identifying the patient, this paper stresses a general view point that no surgical operation has succeeded in an environment of blame game.

Disease diagnosis and economic prescriptions

In a historic fashion, the MOF correctly diagnosed the Zimbabwean problem. On October 1 2018, in his presentation of the Fiscal Measures for Reversing Fiscal Dis-equilibrium, the Minister openly admits that the government budget deficit was unsustainable and an albatross to economic growth. His announcement was a historic acceptance of the fundamental problems wrestling the nation. So without necessarily politicking the issue at hand, the Zimbabwean problems are a byproduct of its leadership failure to ‘eat what they did not produce’.

Having correctly identified the economic conundrum, the expectation was that the TSP should have mainly targeted the main economic problem. Unfortunately, given the limited political muscle to dislodge the government borrowing drivers, the Minister instead focused on revenue boosting reforms so as to reduce the government budget deficit. Much of the widely known ‘painful’ austerity measures include the draconian 2% transaction tax system, the payment of import duty on second-hand cars and other imports through foreign currency. Such a prescription overdose was rather extreme but instead should have been the injection which befitted the government portfolios.

The proposed expenditure reducing strategies were proposed as futuristic strategies and are less likely going to be implemented. Sadly, the austerity measures have been disproportionately favoring the elite whilst over taxing the patient to death. Given the currency crisis and the proliferation of black markets, fuel shortages and its long queues, a bleak festive season and a variety of economic tribulations; surely the patient is likely going to succumb to the ailment.

Regardless of having fiscal, monetary and political blunders, the leadership’s message from their public relations campaigns is rather appealing to the moral suasion strategy of urging the patient to ‘endure the pain,’ ‘be humble and austere.’ Within such a gospel however, defense mechanisms of peddling economic saboteurs, social media aggravating economic problems and the government’s incapacity to print US dollars are touted as the barriers to the leadership’s incapacity to quickly attain a successful economic operation.

 Economic recovery: A national project

There is obviously no one universal panacea or methodology to solve a problem. Even within the same line of thinking of the doctor-patient binary, both the doctor and the patient have a crucial role to play within the transaction. The doctor is required by law and morally to correctly follow through all technical and analytical procedures to diagnose the problem. A prescription to manage and or eliminate the patient ailment is then administered. The patient on the other hand, should not only follow the doctor’s expert analysis but has an additional duty to maintain healthy eating habits and engage in some form of recommended physical exercises.

So there we have it Zimbabwe. The experts (doctors) have spoken. Let’s brace ourselves for pain. However, as patients under their care, we demand that they at least respect some fundamental obligations. For starters, fiscal authorities should practice the gospel that they are preaching of ‘government leading by example.’ In the words of the Minister, government is ‘continuing to make big cuts to perks and unnecessary expenditure.’

If government could substantiate these claims through published statistics surely the members of the public will be more willing to follow through the ‘austerity for prosperity’ economic prescriptions. Additionally, the doctor’s prescribed methods have largely been disproportionate by only targeting the poor masses. Going forward, the patients demand the full government commitment to structural economic reforms.

It has long been established that our economic albatross is the government’s unsustainable borrowing. As such, more initiatives and economic stratagems should mainly target fiscal consolidation and fiscal restraint measures which manages the government’s unrestrained borrowing behavior.

Whilst it is a great international approach to present a positive picture about our economic developments, the Zimbabwean fiscal and monetary authorities have a legal obligation to restore the financial soundness of the economy. The failed attempt to maintain the bond note within the multicurrency regime has proven to be a wrong prescription for economic recovery. Re-dollarising the economy is a sure way to resuscitate the comatose currency crisis within the nation.

It is without a doubt that a lack of political hygiene has been the major incubator of Zimbabwe’s economic distress. Going forward, economic recovery is not only linked to monetary and fiscal reforms. The restoration of the Zimbabwean political governance to more democratic as opposed to command governance system is surely an indisputable obligation.

To our President, we are in an economic operation. As the current head of state, it is your time to shine and it is your exclusive prerogative to deliver the best fiscal, monetary and political prescriptions which will surely prove that indeed the country is under a ‘New Dispensation’ and ‘Zimbabwe is Open for Business.’ Assuming, your current team is sincere about these mantras and indeed revolutionary, one day Zimbabwean Austerity shall surely be a great prescription for our national Prosperity.

To the nation at large, yes our leaders might view us as economic patients in need of the doctor’s expert opinion, but we can change the discourse. Zimbabwe can become a great nation again. We have hope which goes beyond political, fiscal and monetary reforms; though we demand such preconditions to be fulfilled. Our land shall prosper. The patient shall recuperate from the economic comatose.

Paddington Masamha is an Independent Financial & Economic Analyst. Email pmasamha@gmail.com.