‘Crisis should transcend partisanship’

'Products that were in the formal sector, and therefore subject to some form of control, are now (in) the black market sector, and prices are rocketing'
'The targeted sanctions imposed on the ruling elite are not the cause of our economic woes'
'The tragedy is that much of the foreign curre


ncy that is acquired is not used for the benefit of all the people of Zimbabwe’
‘The reality is that our current economic situation has never been so depressed and poor people have never been as vulnerable as they are now’.
In these extracts from his speech to Parliament on 4 September, Bulawayo South MP David Coltart (MDC) shares his vision for the future
MR COLTART: This is not MDC propaganda; if you look at the article on Zimbabwe, that the Zimbabwe government sponsored to the tune of US$1 million, in the September edition of New Africa magazine, you will see some of the statements made in that document support what I am saying.
“For instance it records that our GDP as a nation is back to the level of 1953. We have lost over 50 years of economic growth in the space of a decade. It is estimated also in New Africa magazine that 80% of Zimbabweans are now living below the poverty datum line, including members of our armed forces. Our economy is collapsing. For example, gold production last year was the same as our gold production in 1907! The last time we had coal production as low as it was last year, was in 1946. These are facts that none of us can avoid. We see the manifestation of these things when we visit the supermarkets… The reality is what we have seen in our supermarkets is the symptom of a far deeper cancer in our society.”
THE CAUSES:
“We need to go deep into our history to find when it was that everything started to go wrong. Why is it that in 1958 we had an economy bigger than Singapore? And yet since 1958 we all, black and white, have managed to reduce this country to the basket status it now suffers from. In my view the problems started well before 1980. The root of our decay can be traced back to many of the policies first implemented in the early 1960s. For example, I believe that price control regulations were imposed in the 1960s. Foreign exchange regulations were imposed in the 1960s but, most importantly Mr Speaker, what happened in the ’60s is that we removed one critical important ingredient necessary for long-term sustainable economic growth and that is summed up in one word – democracy.
“The Rhodesian Front government, in the pursuance of white minority rule, discarded whatever democracy was developing in this country in the 1950s under the leadership of real patriots such as Garfield Todd. Therein lies the root of the economic collapse of this country. The Rhodesian Front bequeathed to Zanu (PF) an undemocratic legacy, including the Law and Order Maintenance Act, an undemocratic Constitution, complete control of the flow of information – the RBC simply became the ZBC and did not change its policies of supporting blindly the government of the day – price controls and exchange-control regulations. Zanu (PF) merely picked up where the Rhodesian Front left off.”
SANCTIONS
“Mr Speaker, my Hon. Friend blames everything on sanctions and I want to look at that now. The first point I want to make is that we must consider the history of this country in this regard. We know that in 1966 the United Nations very correctly imposed on the white minority government of Rhodesia comprehensive trade and economic sanctions. They were a censure imposed by the UN of racist policies. They were overwhelmingly enforced. The only countries that breached those sanctions were South Africa and Portugal (and partially by some countries like France). “However, the fact is that after some 14 years of these sanctions in 1980 the Zimbabwean dollar was stronger than the United States dollar… I am not seeking to be an apologist for the Rhodesian Front. The point I am simply making is that despite the imposition of comprehensive trade sanctions over a period of 14 years on the Rhodesian Front regime, the Zimbabwean economy was nowhere near in a catastrophic state as it is now – [Interjection, HON KASUKUWERE: It was a white man’s economy].
“Let me respond to Hon Kasukuwere: It may well have been a white man’s economy but despite that most people of all races then had basic access to food, water and drugs, which they do not have now. Mr Speaker, we are dealing with old historic facts. Irrespective of who is responsible for the imposition of the sanctions and what their scope is, the fact remains that the present targeted sanctions are not as comprehensive as the sanctions imposed on 1966. This then begs the question: why then has our economy collapsed almost totally under a more benign regime of sanctions now? The reason is simple – the targeted sanctions imposed on the ruling elite are not the cause of our economic woes … the sanctions, such as they are, were first imposed in 2002.”
ECONOMIC DECLINE
“However if you look at the pattern of economic decline in this country, we can see the economic decline did not start in 2002 but started in 1997. The first thing that started the collapse … is that this government sent Zimbabwean troops, not in Zimbabwe’s interests but to protect private mining interests of the ruling elite, to the Democratic Republic of Congo in 1997.
“Furthermore, Mr Speaker, unbudgeted payments were made to war veterans in 1997 which greatly increased the budget deficit and as a result the Zimbabwean dollar plummeted and lost something like three to four times its value in November 1997 – on the day commonly known as ‘Black Friday’. If one considers the economic records you will see that there was a further steady decline from 1997 to 2002, five years before sanctions were ever imposed.
“(Sanctions) do not apply to Japan, China, Canada and many other wealthy countries. .. In fact it does not prevent the Zimbabwean government from seeking loans from other developed countries and it still has the right to seek assistance from many international financial institutions.
“The fact that we have battled to get support is not because of American sanctions but because our economic fundamentals are all skewed. In this regard Mr Speaker Sir, we need to turn to what our neighbours have said and in particular we need to consider what none other than President Mbeki said in his weekly letter to the ANC just 10 days ago. He said two things in particular: first was that the Zimbabwe government needs to address the overvaluation of the Zimbabwe dollar. The second thing was that the Zimbabwe government needs to end the quasi-fiscal expenditure which has been hallmark of this government’s economic policy over the last few years.”
EXCHANGE RATE
“The reason that we have our exchange rate pegged at ridiculous levels – the reason the Zimbabwe dollar is still pegged at $250 to 1 against the US dollar – is because this benefits the ruling elite which is still able to buy foreign currency at these ridiculous rates.
“Mr Speaker, the regulations which require the productive sector to sell a certain portion of its foreign exchange earnings to government at ridiculously low exchange rates are part of this ruinous policy. The tragedy is that much of the foreign currency that is acquired is not used for the benefit of all the people of Zimbabwe. The tragedy – if the truth is told – is that it is political elite in the country which benefits from this policy. The preferential access to foreign exchange at staggeringly low rates of exchange, that bear no relation to the real value of the Zimbabwe dollar, is done at the expense of the Zimbabwean people.
“Mr Speaker, until what President Mbeki said is listened to, until the exchange rate policy is looked at, until we bring to an end the preferential access that certain people have to foreign currency, until we bring to an end the unbudgeted quasi fiscal spending, until we end the irresponsible printing of money, our national economic woes will continue.”
PRICE CONTROLS
“Mr Speaker, let me turn briefly to the issue of price control and the Indigenisation Bill. Let me just say these price control measures were introduced as a knee-jerk reaction to the rapid hyper-inflation experienced in late June. The tragedy regarding the imposition of the price controls is that just the opposite of what was intended will now happen. Far from this quelling inflation, it has already fuelled inflation. There has been some short-term benefit to some people but time will show that that is only a small short-term benefit because all that has happened is that products that were in the formal sector, and therefore subject to some form of control, are now being sold by the informal sector, the black market sector, and prices are rocketing.
“Until, Mr Speaker, we get back to a situation where the market determines the price of products, this price-control policy will not be in the interests of impoverished members of our society. We must stop kidding ourselves. This new policy will only increase inflation.”
INDIGENISATION BILL
“There is no doubt that because of the historical inequalities and injustices there is a need for balance and fairness in our society. The problem is that this policy as it is being devised will firstly, in my view, not benefit the generality of the people but will only benefit certain people in the ruling elite, which should not be the intention. Until the whole process is opened up, until we can see that assets are going to be transferred to the vast majority of our population, it will not be in the interests of Zimbabwe. We have the land-reform programme as a precedent in this regard. We can all see the evidence regarding what has happened in that regard. Mr Speaker, it is now clear to all objective observers that the main beneficiaries of the land-reform programme are those in the ruling elite. The biggest benefit has gone to those political and military leaders who have cherry-picked the most productive farms, most of which have now been rendered derelict. That is not in the best interests of Zimbabwe. I have no doubt that the same will happen to our businesses if the Indigenisation Bill goes through in its current format.”
THE SOLUTION
“Mr Speaker, I have the right to speak about Zimbabwe as much as anyone here. I was born in Gweru in 1957 and my roots in Africa go back to 1820 – so I think I have the right to speak about my country, and I will. We need to ask ourselves the question – why is it that Singapore which had a smaller economy than ours in 1958 is now one of the strongest economies in the world and yet our nation during the last 40 years has been reduced to the basket status it is now?
“We need the following, Mr Speaker: Firstly we need to rekindle democracy in our nation. We need to take concrete steps to root democracy. Integral to that is a new constitution; but it must be a new constitution that we all agree to; a constitution which is owned, which is embraced by all Zimbabweans. It cannot just be a document we agree to in this House; any new constitution must be embraced by all our people. We need to enter into a new contract with each other and the Zimbabwean people.
“Secondly, Mr Speaker, we need to remove many of the controls over our society and our economy. I would like in this regard to return to Hon Kasukuwere’s speech and his example of China. Hon. Kasukuwere spoke about China as a great example. I think we have many lessons to learn from China. There are four or five provinces of China which are responsible for the bulk of economic growth enjoyed there at present. These provinces have some of the most liberal economic environments one can find anywhere in the world. There is minimal legislation which controls the activities of the private sector – indeed I stress there is less bureaucracy, less red tape for businesses in these provinces than there is in any other country in the world. That is a fact. In other words, the Chinese Government has embraced the private sector and this has promoted growth in its economy with spectacular results. What we are doing now in Zimbabwe through price controls and through certain provisions in the Indigenisation Bill is just the opposite.
“In conclusion, may I repeat that our nation is in crisis – the resolution of that crisis should transcend partisanship. We need to put our hands together in this House to devise policies than can stabilise our country. We need to devise policies which will bring back our brains.
“Mr Speaker, if we move away from rhetoric to constructive action I have no doubt that this nation can still be the jewel of Africa …” [Interjection, DR. MUGUTI: It is the jewel of Africa]. Coltart: “No, at present it is not but it has the potential to become that – but that can only happen when all of us move away from all this empty rhetoric to consider the harsh circumstances that the poor are facing in our nation today. Our futile posturing must stop immediately. We must, without delay, devise practical solutions to address this economic and humanitarian catastrophe.”



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