As I read Mutili Ncube’s Transition Stabilization Document, I was left with a lot of questions.
Questions I found challenging to address without first extricating myself from the box of economic theory to the common sense practicality of human existence and survival.
The first thing I had to do was ask myself what the purpose of human life is? The answer was pretty simple: it is the physical self preservation of human life and spirit for the purpose of procreation, provision and protection of off-spring in optimum emotional and psychological conditions that encourage the replication of the process perpetually for evolution.
Physiological survival derives from the ability of humans to use their minds, strengths and advantages to utilize their environment and resources to produce food, shelter, health and safety. With that comes a mate, procreation, off-spring, family, a sense of purpose and belonging.
Societies Of Necessity
Upon attaining these basic needs, humans seek to ensure future, sustained provision to guarantee the success of the family. This pushes them to group with other humans of common interest to create a society that collaborates to produce future [sustained] provision.
This social grouping is what delivers security, enhanced psychological and emotional well being which motivates the repetition of the process.
Human Existence & Economics
Now that I had established the fundamentals of human existence. I now had the tools to test how these same conditions could be reproduced by man made laws of economics and policies in this colonial construct of modern life.
I would then use this to frame my understanding of the finance minister and his role. Intent on establishing how he seeks to ensure my human existence through his Transitional Stability Program? At the same time interrogating how his future plans would ensure that I can provide food, shelter, safety and security for my family in future.
Human Survival As Applied Economics
Based on the principle laid out above, effective economic policies from my finance minister firstly needs to group us [Zimbabweans] in a common interest. From here they would need to identify our resources and seek means to channel our strengths and advantages to utilize those resources to produce our human life needs.
So what are our resources in Zimbabwe and what are the strengths and advantages that need to be leveraged to use these resources to sustain life?
Well, first of all our nation has:
• A rich communal culture: a highly spiritual, communal culture that thrives in scarcity by pooling small bits of labor, energy, resources, knowledge, skill and strength to produce provision for the society.
• A hard working administrative, technical and manual labor force with an amazing work ethic.
• A diverse number of economic systems and groupings that include the following:
• A sparsely populated area supporting 63% of the nation’s most productive people living on rural land.
• Characterized by quality of life, high self sufficiency, low crime, low disease burden and less reliance on the monetary system.
• Rich in culture, quality livestock, wild life, national heritage sites, natural wonders, nutrition, seeds, fruits, forestry, water resources, minerals, ownership of resources by the common man and agricultural output from the people.
• Most of the nation’s primary production and foreign currency earning coming from the agricultural, mining and tourism activities of the rural population.
• 17% percent live in cities,
• 5% of them are property and capital owners, while the rest work or seek employment from the capital owners,
• 95% of them rent from the capital owners, consuming and transacting what is produced in the rural areas to survive.
• Majority are subject to unemployment, poverty and inequality.
• Dependent and can not survive without the monetary system unless subsidized by rural or diaspora contributions.
• Alongside we have another 20% living outside Zimbabwe working in the diaspora.
• This group is made up of highly skilled, skilled and semi skilled administrative, technical and manual labor.
• They earn foreign currency, remitting on average $3.2bil formally and informally annually to sustain the consumption of their families back in Zimbabwe.
• 10% of these are property and capital owners, increasing our total capital owning class to about 3-5% of the total population.
From this short description, a structure of the Zimbabwean economy has began to take shape. Our economy is driven by production from 63% of our [rural] population that has access to resources, assets to produce their own survival and surplus for the nation.
The remaining 37% consists of a 10% asset owning class, while 60% of this group are struggling to eek out a living in the diaspora and local towns where they don’t produce their own survival provision and don’t own factors of production.
Many of these could gain access to factors of production and become much more productive if they went back to their rural origins.
My Finance Minister’s Challenge
So what is the economic dilemma that my finance minister is supposed to grapple with in both his transitional stabilization plan and two future long term plans?
He is meant to ensure that he is developing an economic policy that:
1. Brings Zimbabweans together into a society of united people who communally contribute their labor, ideas, capital and strengths to work their environment and their resources for survival and prosperity of the whole society as they traditionally did.
2. Identifies, quantifies, consolidates and protects the resources that are controlled mainly by 63% of the population and those in the cities because those resources are the factors of production to sustain the entire society and generate the nation’s wealth.
A portion of these resources must be insured and warehoused as a basket of value for a resource backed local currency.
3. Assists 63% of the population to keep taking advantage of their strengths and advantages to produce more food, shelter, health security, surplus to assure future production, prosperity and peace of mind of the nation.
4. Assists those living in cities and the diaspora who are struggling to acquire food, shelter, health and security to come back to resource rich rural areas and establish themselves so that they can begin to produce from the abundant resources.
5. Harnesses the savings of the diaspora and city dwelling capital class and allocates them to leverage the opportunity and capacity in the rural economy.
6. Facilitates the creation, consolidate and allocation of debt for public administration, social development, capital accumulation and production in the economy.
7. Creates new Afrocentric financial vehicles to collect, consolidate and allocate a lumpsum of collected communal contributions (marounds, stockvels) to be invested into resource ownership, processing and sales.
8. Develops a stable means of exchange that facilitates competitive cost production for internal and external trade, saving and value storage. This beginning with backing the medium of exchange with a weighted basket of our vast resources and industry output.
9. Develops frameworks, mechanisms, grants and incentives to promote the sophistication of our agricultural and mining produce through industrial value addition. Supported by tooling, maintenance workshops, technical services, research & development; innovation and training centers for industry.
10. Administers the creation of commodities exchanges, markets and value channels to get local products efficiently to local, African and the surplus to overseas markets. Continental integration being the focal point.
Rural Driven Economy
This means our finance minister should be devising a monetary policy that allocates investment of domestic capital into the rural economy to leverage resources ownership, agriculture, mining and tourism.
Once these sectors are producing sufficiently, part of their proceeds must be reinvested into agro-processing, mineral sophistication, tourism capital accumulation and marketing of the products. This will be augmented by attraction of highly skilled diaspora and foreign technical skills to capacitate the new processing, service and marketing value chains [local and export] evolving in the process.
If you notice, so far I have not mentioned full employment or foreign direct investment as keywords. That is because with 63% of our population living in rural areas, they are not seeking jobs to survive but they aspire to use their resources more efficiently [land, labor, minerals, water, livestock, Wild animals, trees, grasses, labor] to survive and grow.
Through the resources found where they live, they already have the means to produce all their’s and the nation’s survival requirements.
We Have Historically Been A Rural Economy
Up until recently this rural base of production sustained upwards of 90% of our population over the past millennia. From birth to adulthood these pre-independence Zimbabweans were nurtured by a rural economy based on barren reserves during colonialism. Now they have fertile land, meaning they now have the capacity to produce even more.
Pre-colonial Great Zimbabwe and Mutapa Empires were built out of this rural model that did not use paper money, an employment model or external debt but it traded and flourished all the same.
This illustrates the potential of this economic model to sufficiently support development and the 2030 middle income vision if rural areas can be serviced with energy, sanitation, access to clean water, roads, communication, support institutions and skills.
Full Production Vs Full Employment
In short the economics equation in Zimbabwe is not the proverbial western problem of achieving full employment but it’s a need for full production.
The need for the majority of our families and collective society is to see every bit of land being used efficiently and sustainably to feed families and the people of Zimbabwe. With the surplus finding channels to markets in neighboring countries and internationally.
It’s to participate in the sustainable extraction our mineral wealth, processing of them into raw material and products to be used locally and exported outside Zimbabwe to earn foreign currency that they want.
Rural Production Will Produce Jobs & Organic Industry
To achieve this our rural population will require the injection of capital, infrastructure, labor, innovation and technical expertise. This shouldn’t be too difficult because these needs are underwritten by a wealth of resources as collateral. Labor becomes an input for production and not the reason we need production.
If our economic policies are laid out well we can mobilize our communal culture of pooling capital among Zimbabweans (maround, stockvels) to generate huge amounts of investment capital. With that we could invest in research & development, new technology, hiring leading technologists from across the world; procuring innovation, trade secrets and blueprints from our skilled diasporians and foreign skills to improve our agricultural, mining and tourism product.
With increased output we repeat the process, increasing our hiring of highly skilled diasporians and immigrants to sequentially transfer technology and knowledge they have from leading companies. We use them to build new up stream and down stream industries and innovate new ways to process and sophisticate our resources.
We establish research & development facilities with skill from across the world and infuse new techniques, knowledge, skills and innovation culture into our education system, training centers and media. This is known as the Triple Helix when capital, education and industry converge to leapfrog us into our own unique hybrid industrial and innovation era.
Capital Ownership Buys Innovation & Ability
When you own the capital and facilities that can afford to employ highly skilled technologists, innovators or inventors. Their knowledge and intellectual property becomes the institutional IP of the Zimbabwean entity and the improvements leapfrog Zimbabwe into industrialization through the flying goose effect.
This means as a nation we benefit from local investment employing foreign skills that transfer technology into our institutions and people. More than foreign investment that keeps its research and development centers in other locales, never transferring knowledge and technology to Zimbabweans which creates technology dead ends.
Foreign Investment Does Not Leave Its IP
This is a critical lesson we should have learnt when foreign investment divested from Zimbabwe in the late 1990s. After 100yrs of its presence in the Zimbabwean economy, foreign capital never left technology or knowledge, which incapacitated Zimbabwean industrial growth. We need to learn from that experience: foreign investment does not leave its IP behind.
Why Are Our Current Economic Policies Not Geared for Triple Helix?
So why did the Transitional Stability Plan and indeed most other African plans focus on achieving full employment instead of full production? Because our economists and finance ministers are caught up in economic theories written by European economists to solve European survival problems.
European Capitalist Economics
European nations were characterized by small territories, huge populations, high population densities, few natural resources and thanks to capitalism the little they had were quickly exploited and depleted. Capitalism also meant a few nobles owned the resources while the rest had no access to resources to produce what they need to survive.
The only way the masses of Europe could survive was to become labor for capital to turn the scarce resources into products. The capital owner would in turn pay them money to buy shelter, food, safety and security from other capital owners.
Its from these necessities that European economists engineered a way to exploit their huge populations and minds to produce profits for capital so that capital could produce long term sustained provision for the nations.
With as many smart minds as Europe had, for centuries they tried to extract food, shelter, health, gold and security from exhausted resources but they realized that they did not quite have those super natural powers to keep yielding.
So inevitably they created a medium of exchange to swap for resources from other neighboring nations to produce until the medium was depleted. This resulted in the need to improve weapons to rob neighbors until the neighbors resources were depleted.
Out of necessity came the need for European nations to group and develop vehicles to transverse oceans in search for new lands with resources that could be stolen and exploited. To accompany this force would be a new valueless medium of exchange [paper money. In the US its cotton money] alongside manuals convincing people in new lands to let go of their resources for the valueless medium and goods manufactured by the Europeans. This was the beginning of global free trade economics, the rest is history.
The question we need to be asking each other now is with all our abundant resources, why are we as Africans following the European manual to sell our resources to them for cheap for their medium of exchange and their factories to create us full employment. Yet we can keep our resources, develop our own factories and we can employ them for their expertise to give us full production?
Once we control the resource and it’s processing, we can control the market and in comes the triple rent that will pull global investment.
By Rutendo Bereza Matinyarare of Frontline Strat Marketing Consultancy.