Wanted: investors to create jobs

Zimbabwe has an urgent and pressing need of policies that will encourage the creation of employment. But because employment arises from investment and investment depends upon investor confidence, the more urgent need is to encourage and support investors.

Recreational centres used to facilitate vocational training courses.
Recreational centres used to facilitate vocational training courses.

We can even distinguish between different kinds of investors and point out that the ones we need most are those active in the productive sectors, the ones who make things. Those in the service sectors, such as commerce, transport, banking, insurance and accountancy, are needed too, but they create not nearly as many jobs.

As we have hundreds of thousands of job-seekers arriving on the labour market every year, we need, as a country, to become especially good at attracting the kind of investors who can employ and train them.

People who can identify business opportunities and are prepared to commit themselves, their finance and any other resources that might be required to build successful productive enterprises, have an unusual collection of qualities.

To start with, they will be good at identifying opportunities, and at managing money, people, productive processes and all the challenges of the market place.

They will also have the courage to take certain risks and the patience to work through time-consuming processes that promise returns only after lengthy development periods. They will also have the ability to adapt quickly to changes that can at any time affect customer preferences, costs, materials, and the technologies involved in producing their particular products.

People with this range of skills and special qualities are rare. We should be looking after the ones we have and we should be making every effort to attract as many as we can find, because it is so difficult to cultivate such people.

For all these reasons, it was hoped that the publication of a new document on March 29 2012, Zimbabwe’s Industrial Development Policy, would identify and implement the changes needed to make this country attractive to investors in general and industrial investors in particular.

Regrettably, this latest document does not fulfil this need. While a few paragraphs commend the virtues of productive activities, most of the document consists of lists of business sectors within which government believes investment opportunities can be found.

A large part of the rest of it consists of phrases implying government assumptions that its direct involvement in the business operations will be both expected and welcomed.

In the exacting and unforgiving world of business, however, investors can get nothing of practical value from such a document. For a start, investors worth having do not need the advice of government officials on investment opportunities. On top of that, serious productive investors do not want to hear even a hint that government advice on what to do should be taken, or that government might claim rights to participate in new business ventures. Such demands amount to threats that are more than enough to make genuine investors look elsewhere.

Some of the phrases in the document suggest a solid pathway to success is being built. For example, government claims it is committed to playing its role as a facilitator for industrial development.

This is an entirely welcome sentiment and it is even supported by assurances that “government will simplify rules, regulations and procedures to remove bottlenecks”, and by a line in the document’s concluding paragraphs that says: “In this light, Government will create an enabling environment and make appropriate policy interventions.”

However, the pathways almost always disappear under tangled thinking before they get far enough to become policy changes in the right direction.

Other sentences state: “In order to fulfil our vision of industrialisation, close co-operation between government, business and labour is imperative,” and “Industrial policy is founded on the principle of tripartite (government, business and labour) participation in decision-making, goal setting and corresponding tripartite acceptance of responsibility for the successful implementation of the strategy.” This collection of words is more ominous. Businesses will have good reason to argue that the leverage government claims for itself and labour is far more likely to generate a disabling environment, with government and labour making all the demands and business making all the payments.

If one side wields all the authority, but all the responsibility has to be carried by the other, production soon grinds to a halt.

Steering clear of dead ends is a skill that good investors acquire at a very early point on their respective learning curves.

Without doubt, every investor is looking for an enabling environment that is supported by appropriate policies.

But just as the groundsman does not involve himself in the soccer game after preparing an enabling environment for the players, the government officials who prepare the grounds for business activities should be kept well away from teams of players on the fields. – from an address given to the George Makings’2012 Labour Conference.

Post published in: Opinions & Analysis

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