Why an economic planning commission makes sense
-Rhodesia’s Ministerial Economic Coordination Committee saw the country through sanctions
In 1981, March 23 in particular, Prime Minister Robert Mugabe opened the Zimcord meeting. Zimcord is short for the Zimbabwe Conference on Reconstruction and Development. The idea of the conference was to set out elements of a three-year plan leading to the development and recovery of all aspects of Zimbabwean life following years of minority rule. History records the meeting as successful after having met its target for aid. A total 31 nations and 26 developmental agencies including USAID pledged $1.45 billion. This is one of the ways that independent Zimbabwe managed its political transformation.
Thirty-eight years later the nation saw its second leadership transition. We might not agree on how this transition happened. Some might not agree on who led the transition. But it is generally agreed that there was need for leadership change in the country. After 37 years, Zimbabwe was beginning to feel the weight of having a leader who had gone past the accepted active biological time. While in 2014 there had been an economic realism that the country needed to reform and re-engage to catch up with the world, the biggest risk was always the politics. But in spite of this risk, government experienced a gradual and internal shift in fundamental economic policy.
However most appropriately, the first lesson of economics is scarcity: There is never enough of anything to satisfy all those want it. The first lesson of politics is to disregard the first lesson of economics.’ Those who have read a lot of economics textbooks will be familiar with this quote from Thomas Sowell. Politicians generally have no regard for economics and this has always been the biggest downfall. But the country takes to heart President Mnangagwa’s promise that in his five-year term, the economy will take precedence over politics.
All eyes are now on his choice of Cabinet and overall how he will handle his PR. He has a lot of weight on his shoulders considering that 49,2 percent of the country did not vote for him. While a lot of names are being thrown around, it is largely expected that the Cabinet will balance between partisan loyalty, political craftsmanship and competency or skill in a particular area. In my view only two key ministries require careful consideration; Finance and Local Government. A lot of people have asked why Local Government was key and the answer in my view is simple; Zanu PF’s most repeated promise was devolution. Devolution is the transfer or delegation of power to a lower level, especially by central government to local or regional administration.
However, when a Cabinet is put in place, there is need for the President to set an independent economic planning commission, a superior body overseeing planning and implementation of Government programs in a systematic and coherent manner. I have repeated this since 2013, and will say it still as it remains relevant since there are limitations in terms of the technocrats that Mnangagwa will incorporate in Cabinet.
As early as 2011, there were reports Government was planning to set up a National Planning Commission comprising all line ministries to oversee the implementation of the Medium-Term Plan.What this country lacks is a national perspective on the economy. There is no mechanism for building knowledge among the various ministries and therefore no convergent policy. If an independent planning commission were to be set up, it would be able to facilitate coordination between the public and private sectors to ensure the successes of Government policies. It will also correct perceptions and build people’s confidence in the ruling party. Confidence that indeed they are open for business; they can handle the foreign currency shortage crisis; they can create jobs; they can arrest corruption; they can deliver the best social services, that their leaders will not have a sense of entitlement and overall they can restore hope in a lost generation.
The increasing importance of various infrastructure projects, in which the private sector is expected to participate in, cannot be left to individual ministries. Nor is it feasible to leave it to the hands of Treasury. A planning commission would be able to coordinate this and ensure efficient distribution of funds.
Another area where such a type of commission would play a key role would be the setup of a research division where detailed and authentic projections would provide guidelines to both Government and the private sector.
An independent commission would also mobilise the potential of other agencies both within and outside Government and strengthen its skills base. With high incidences of corruption within the public sector, civil servants cannot do it alone.
Zimbabwe is not far from achieving economic growth. It only needs to take a few steps forward by coordinating and effectively planning around the same message.
History records that on the morning of the collapse of Federation and the eve of Rhodesia’s UDI in 1964, the Smith regime passed an Exchange Control Act (1964) and Reserve Bank of Rhodesia Act (1964) in preparation for taking full control of financial matters in the event of provoking Britain to impose economic sanctions in response to the colony’s rebellion. The RF entered into a series of trade agreements with other countries. They especially created alliances with South Africa and Portugal to form the Pretoria-Salisbury-Lisbon axis determined to maintain white superiority in the region. Preparing for Britain’s retaliation, Salisbury created a cabinet committee called the Ministerial Economic Coordination Committee (MECC). Chaired by the Ministry of Finance John Wrathal, the MECC consisted of key ministries which would cooperate and coordinate on key policy priorities requiring government financing to stimulate economic development. The RF deliberately defaulted on debt. Restrictive exchange controls created a hot-house effect through locking investments in and reducing the possibility of foreign exchange loss through disinvestment. Foreign companies were forced, usually against their will, to register as local companies if they were to continue operating, including the expatriate Standard and Barclays Banks. In short, the ministries closely coordinated economic policies for the general benefit of the white Rhodesian state.
Notably, according to Tinashe Nyamunda’s account, the Reserve Bank of Rhodesia, under Noel Bruce for most of this period, was kept at the periphery of state. Its role was limited to traditional central bank roles of money supply, setting interest rates and monitoring and registering financial institutions. Governor Bruce’s main media presence involved representing the bank in cases against its adjunct in the United Kingdom, giving policy statements limited to the roles ascribed to the bank. Major fiscal decisions responsible for Rhodesia’s economic success were the responsibility of the Finance Ministry in consultation and close coordination with the MECC. Although they did not always agree, the cabinet committee’s protective approach to the Rhodesian economy required very astute, collaborative, informed and inventive management strategies as the recipe for import substitution industrialisation, economic diversification, and (smuggling) export led survival and even growth. This insured the stability of the Rhodesian pound and the Rhodesian dollar (after decimalisation in 1970) for the better part of the UDI period.
After a planning commission is set up, one can only hope that the country will focus on what it is really good at. Its advantages over other nations; where it competes favourably. People easily point to agriculture, mining and tourism but we need to identify specific areas. I generally would focus on the value chains cognisance of the fact that textile and steel were the main drivers of the economy back in the day. This however is a story for another day.
When asked what he would want the President to do for the country, Dairibord chief executive Anthony Mandiwanza told Tambarara, that the economy needs to go back to work. According to him, there are three pillars, which will drive the economy; import substitution, export generation and the participation of the international community.
He also spoke of the need to look at the nodes for economic turnaround such as agriculture, mining and tourism. And of course, he also said that he would ask the President to say for Zimbabwe Incorporation where the President is the Chief Executive to meet with business people quarterly to agree on the transformation agenda and review its success. The planning commission is however the first step.
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