NEDPP’S fantasy economics

The announcement earlier this year of another economic turnaround package - the National Economic Development Priority Programme (NEDPP) - was just another indicator that the Zanu (PF) regime is living in a fantasy world.  What was even more astonishing was the claim that business leaders had b

ought into this new programme and were alleged to have taken seriously the ludicrous remarks of the Economic Development Minister.
Two previous recovery blueprints – the Millennium Economic Recovery Plan (2000) and the National Economic Revival Programme (2003) – have failed dismally.
The NEDPP’s stated objectives include: the reduction of inflation and currency stabilization, food security and the generation of US$2.5 billion in foreign currency within three months.
What it fails to address is that the hyperinflationary conditions are a symptom, not a cause, of the economic meltdown.  The real causes include political illegitimacy, corruption and gross macroeconomic mismanagement.  Political illegitimacy derives from the stolen elections of 2000, 2002 and 2005, while economic mismanagement derives from a number of factors including the unbudgeted payments to war veterans in 1997, the country’s costly military adventures in the Democratic Republic of Congo and of course, the land ‘grab’ exercise with its destructive consequences on commercial agriculture and the resultant shortages in foreign currency. 
The latter has had seriously negative effects on downstream industries in manufacturing, commerce, transport, construction, finance and contributions to export earnings and import substitution.  All these and the resultant pariah status of the country have had serious consequences on our balance of payments and virtually all the economic fundamentals.
Solutions are to be found in the restoration of political legitimacy, normalization of relations with the international community and sound macroeconomic policies.  The MDC’s economic blueprint: Reconstruction, Stabilization, Recovery and Transformation (RESTART), provides a well thought out roadmap to the resolution of these problems.   
Food Insecurity
The major cause of food insecurity in this country is the government’s land ‘grab’ exercise, together with existing government pricing policies and monopoly in the marketing of agricultural products and distribution of the related inputs.  The resolution of this problem will require the resuscitation of commercial agriculture, involving a national land audit, rationalization of land distribution and the immediate implementation of a well – constituted agricultural recovery programme involving the commercial areas as well as the communal lands.
The country needs a holistic approach to the land crisis. No amount of ‘cutting and pasting’ (such as the so-called command agriculture) will resolve food insecurity.
Generation of forex
The assertion that the country needs at least US$2.5 billion to effect any changes in the collapse of the economy that is taking place at present is probably the only element that has any truth in it.  What is pure fantasy however, is the claim that this enormous sum will be raised by the state in “cash and investments” in three months.
As clearly revealed in section 9.3 of the RBZ’s fourth quarter monetary statement (January 2006), “The 12-month period to 31 December 2005 saw foreign exchange inflows into the formal market amounting to US$1.70 billion, compared to a total of US$1.71 billion in 2004 representing a decline of 0.46%”.  Given this record, how on earth does the NEDPP hope to raise US$2.5 billion in three months?

Post published in: Economy

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