The popular phrase, “It’s the economy, stupid!” was coined by Bill Clinton’s campaign strategist, James Carville which led to Bill Clinton’s 1992 presidential campaign win against the then sitting president of the United States, George W. Bush. This campaign messaging was utilised at a time when the American economy had endured a recession, a weakening public health care system and rising disapproval ratings of US jobs performance of the Bush administration. To reignite the focus of the American people on the task that was at hand, Bill Clinton’s campaign team chose to use the economy as a target which required much reform in order to improve the lives of the American people.
Whilst the importance of developing and implementing forward-thinking economic policy reforms in an increasingly volatile, uncertain, complex and ambiguous world cannot be overstated. It does, however, lead to somewhat of a misguided way of thinking about the economy.
More often than not, mainstream thinking of examining an economy or the performance thereof, as it relates to the Zimbabwean question in particular, is with respect to its agricultural potential as a possible pathway for growth and so is the case with its mining sector. In other words, the messaging is such that when talking about the economy, reference is made to mining, agriculture and the informal architecture of that economy and that becomes the economy, which in turn by omission, negates the most important factor of production – human capital – which is the source of value creation in the productive process of any economy. The same way capital instruments create value in an economy, so do people. The high quality of human capital is Zimbabwe’s greatest competitive advantage with literacy rates of above 92 percent compared to other countries, according to the National Competitiveness Report.
For the Zimbabwean economy to collapse there would virtually have to be no one in the country in order for that to be the case. It, therefore, suggests that the current crisis is not on the demand side but rather lies in the structural, monetary and fiscal policy side. Which would enhance economic development, optimise price stability and ensure the effective allocation of resources? A World Bank report titled, The Changing Wealth of Nations finds that a country’s level of economic development is strongly related to the composition of its national wealth. Human capital is the largest component of wealth in high-income countries. In effect, high-income countries have higher adjusted net savings ratios primarily because of what they do with their human capital in creating value in the productive process of what they produce and are naturally endowed with.
There is indeed no quick fix with respect to the Zimbabwean economy. It has to be addressed at the level of economic diplomacy and domestic public policy reforms. These policy reforms have to be purposed, timed and sequenced in a manner that will unlock the growth that the Zimbabwean economy has the potential to yield. Regional economic communities have an important role to play with respect to Zimbabwe. By mobilising domestic and foreign capital in fixed capital for the establishment of the new plant, equipment, goods, and services. Regional economic communities such as SADC and other African economic communities as a whole are pertinent as this cannot be achieved without the ability of the Zimbabwean people to engage in investment and open trade activities in the continent and across the globe. The average of intra-Africa trade between African economies is below 20% according to the World Trade Organisation and over 50% in Asia and 70% in Europe. People are stronger together. There are currently 14 Regional Economic Communities (RECs) of which 8 are recognised by the African Union. The sanctions imposed on Zimbabwe are a significant barrier to their potential to unlock growth in order to earn foreign exchange reserves so as to acquire a local hard currency. There is indeed much to be said about the form quantitative easing of printing currency which led to hyperinflation as a short-cut to growing the economy but greater economic openness will create opportunities for new export markets, free trade zones and to foster industrial activity.
Throwing money at the problem is not the answer but leveraging a favourable demographic structure which espouses the nation’s productive capacity through its people, broadening access to education and education infrastructure, stabilising policy and strengthening important institutions with good governance, accountability and transparency are but a few of the ingredients that would sure turn the Zimbabwean economy around.
To borrow from the words of a former statesman, “Gloom and despondency have never defeated adversity. Trying times need courage and resilience. Our strength as a people is not tested during the best of times. As we said before, we should never become despondent because the weather is bad nor should we turn triumphalist because the sun shines.” Central to these remarks is the ability that people have to self-determine their own pathways despite turbulent circumstances. And how they think and/ or perceive their circumstance can determine their trajectory. An honest examination of the Zimbabwean economy through the lens of the role that its people have to play in reigniting it, therefore becomes the most pertinent task at hand. The economy is about how people as actors in it, drive and determine value creation and sustainability. Stability and peace in Zimbabwe is in the best interest of the region and its collective prosperity.