How good is your business these days?

A RETAILER and a funeral parlour undertaker were discussing performance of their respective businesses. Business is very low said the retailer. On the other hand, the undertaker reported that business was brisk on his part. The retailer was not amused by the undertaker’s remarks, as he was actually happy at the high death rate.

A RETAILER and a funeral parlour undertaker were discussing performance of their respective businesses. Business is very low said the retailer. On the other hand, the undertaker reported that business was brisk on his part. The retailer was not amused by the undertaker’s remarks, as he was actually happy at the high death rate.

Moses Tsimukeni Mahlangu

The abovementioned story/allegory will be used to unpack Zimbabwe’s mouse and cat game with the Bretton Woods Institutions. For some time now, the country has been under surveillance by the International Monitory Fund, under the auspices of the Staff Monitoring Program (SMP). A business weekly of October 8-14, 2015 reported that sharp differences had erupted within government over the re-engagement of the International Financial Institutions and the Multinationals. Opposing forces view Finance minister Patrick Chinamasa’s actions as hostile to the party’s empowerment policies.

Of late, Youth minister Patrick Zhuwao has said the reforms would render party youth jobless. He has openly said that instead of party youths being fired from the civil service, the proponent of the said radical reforms would be sent packing. As if not to be outwitted, War Veterans minister Chris Mutsvangwa advocated for casting of the net wider in seeking economic redemption. He refers to the IMF as the baptised financial saviour of Zimbabwe. One is not sure whether or not the economic meltdown would be totally blamed on IMF policies or programs.

Chinamasa’s remarks are worth noting — walking the talk, need to work hard on what one has set out to do. Should government take this route of being responsible and accountable, this country is on a bright recovery path.

The IMF’s assessment of progress (re-forms) so far made by Zimbabwe is positive. The country’s economic and financial conditions remain difficult. Growth has slowed down, unemployment is rising and economic activity is increasingly shifting to the informal sector. The external position remains precarious. In the light of the country’s arrears to creditors, low commodity prices and an appreciating United States dollar, external inflows remain highly constrained, the levels of international reserves are very low and the country is in debt stress. Coming from an independent assessor this is likely to be a correct picture of the state of affairs that have always been known to be.

Driven by this stark reality, the External Arrears Clearance Committee together with the Ministry of Finance and Economic Development took the bull by the horns. From September 21-25, Dr Mangudya led a team on a lobbying offensive. Rome, Brussels, Berlin and Paris were the targeted capitals. It has always been argued that policy inconsistences are the biggest outdoing of this country. Overlaps in Ministries administration is killing the otherwise well meaning initiatives.

Of the reforms undertaken so far, the IMF singled the financial sector and labour market as the outstandingly successful. Back to the retailer-undertaker story. To the undertaker said the high death rate was brisk business, whilst this was disgusting to the retailer. The onslaught in the financial and labour market sectors is good performance to IMF. On the other hand, approximately 30 000 x a family of 5 = 150 000 souls have been sentenced to death owing to job losses. Labour/retailer is disgusted at such wanton ruthlessness, whilst IMF/undertaker records brisk business Zimbabwe is praised for doing a good job by bringing back the Master-Servant Act.

However, the assignment is not yet over as the following areas must be addressed too:- ●Mitigating the impact of this year’s adverse shocks on the external position and growth ● Improving the investment climate ● Restoring confidence in the financial sector ● Garnering support for the strategy to clear arrears to the International Financial Institutions

Another area that has set the two Patricks (Zhuwao and Chinamasa) on each other’s throats is the rationalisation of public expenditure, as well as reducing public employment costs. Depending on which economic school of thought one is coming from, a developmental or welfare state is welcome during a depression. However, it is not good governance to pay ghost workers out of government coffers. The ghost employer who employees ghost workers must pay the said ghost workers.

Two issues, jump out from Zhuwao’s and Chinamasa’s hatchet. Firstly, it could be a question of who has the thunder and who wants to steal it. Secondly, the said radical reforms could result in the ruling party losing its power grip on the nation.

The teamwork shown by Chinamasa and Reserve Bank governor, John Mangudya is commendable. However, this does not mean this article supports the ruthless nature with which workers have been dehumanised by job losses in the name of labour market flexibility.

The import of this article is to emphasise the need to respect other people’s portfolios. In terms of the biblical golden rule, Matthew 7:12 whatsoever you want others to do you, do it to them.

One thing is for sure, the IMF is here to stay and all the reforms they need or had been missed over the invasion years, it is now pay back time. The government is at its weakest point economically, giving the predators the most opportune time to humiliate the once untouchable tiger.

Chinamasa’s press statement on October 8, 2015 captures a three pronged strategy of amortising the multinationals debt, namely:- ●Clearing arrears to IMF $110 million, World Bank $1,5 billion and African Development Bank (AfDB) $60 million ●Development of a new Comprehensive Country Financing programme to be supported by the AfDB, IMF and World Bank as a leverage to long terms financing to promote growth and debt sustainability ●Engagement of the European Investment Bank, the Paris Club and non-Paris Club bilateral creditor for debt resolution on the strength of the country performance under the above programme

Tentatively, the proposed debt settlement is meant to further fasten the Britton Woods Institutions grip on the country. Mind you, these institutions have developed a spider philosophy, that of making sure wealth circulates within their kith and kin.

Whilst it may be good news to have the debts cleared, the truth of the matter will be that one institution will offset the indebtedness of another debtor. On the other hand, the offsetting institution will assume the position of new creditor. The difference is the same. The new creditors will enjoy the spin offs from the radical reforms. It will be easy to do business, labour market will be flexible. Hiring and firing will be made easy. Civil service employment costs will be reduced. In the final analysis all the reforms are for the benefit of the Britton Woods Institutions. This is economic slavery of the 21st Century. How effective is your business strategy?

As a people we shall overcome – Martin Luther King Jnr.

lMoses Tsimukeni Mahlangu writes in his own capacity and can be reached on [email protected] for comments.