STERP II – a far from realistic document

Zimbabwe began to suffer from self-inflicted damage long before anyone reached for the almost entirely invalid “sanctions” excuse, writes respected Zimbabwean economist JOHN ROBERTSON.

ZIMBABWE now has an updated recovery policy framework from which to obtain guidance on what to do next. The just-issued STERP II document is a 382-page revision of the 127-page version of the Short-Term Emergency Recovery Programme that was issued in March 2009.

At the launch of the programme, the Deputy Prime Minister, Thokozani Khupe, left her audience in no doubt: international assistance will be needed to close the wide financing gap between domestic revenues and the expenditures that will be needed to make the programme work.

But missing from her presentation and from the document itself is any attempt to argue that Zimbabwe is now deserving of the needed assistance.
Bringing about the recovery would be challenging enough even if the country had actually suffered from the claimed effects of “sanctions”, but Zimbabwe began to suffer from self-inflicted damage long before anyone reached for the almost entirely invalid “sanctions” excuse.

Deliberate damage

If this enlarged and revised document included any evidence that the
recovery proposals included efforts to repair the damage deliberately done,
assistance would almost certainly be offered much more readily and much more generously.

But no such lines appear in the text, or to address the fact that the country’s problems are as serious as they are because decisions were taken to close down Zimbabwe’s biggest business sector and to dispossess the investors who had built this capacity.

What does appear in the statement is that, “The Framework strategies to
transform Zimbabwe’s agriculture will involve a greater reliance on
efficient inputs delivery and farm output marketing systems and a smooth
integration of agriculture with the domestic, regional and international
markets.”

Regrettably, the phrases suggest we will all be putting our trust in
bureaucratic procedures in the apparent belief that they can make business
acumen and talent unnecessary.

The importance of the people who had already transformed Zimbabwean
agriculture and who used to be relied upon to deliver all of the
efficiencies required is not acknowledged, not recognised and not admitted.

Dairy development

Consider the paragraphs under the heading Dairy Development:
602. Challenges experienced with overall livestock production have also
undermined dairy farming.

603. As a result, raw milk supply, which was 256 million litres per annum in
1990, has since fallen to current levels of 23 million litres.  This is against national demand of 96 million litres, and an installed capacity of 350 million litres.

604. The general decrease in dairy production is also a result of viability
challenges, unavailability of stock feeds on the market in previous seasons,
as well as crippling labour shortages.

605. The Framework targets increasing dairy production to around 25 million litres in 2010.  Supportive measures during 2010 to 2012 include support for growth in the dairy herd, which had been depleted to around 140 000, against an all-time high of about 1.4 million.

Simply dishonest

While a few facts can be identified in those lines, the relevant facts are
missing and some of the claims are simply dishonest. Dairy farming was not
undermined by livestock production challenges.

It was undermined by the eviction of the owners of nearly all the dairy farms in an acquisition process that destroyed a large percentage of the dairy herds. True enough, “livestock production challenges” did follow, but for reasons carefully avoided in the STERP II document.

The relevant facts are that highly skilled dairy farmers used to produce
more than 10 times the current volume of milk, and because this was well in
excess of national requirements, a wide variety of diary products could be
exported. Now that production is about a quarter of the country’s
requirements, substantial imports are needed.

The confiscation of dairy farms, complete with the massive investments in
equipment and breeding stock, was as expensive to the country as it was
unjust to the investors who had created the businesses.

The claims now implied in the STERP II programme that the industry can be revived as if all this never happened and as if people who acquire such farms for nothing can run them as well as those who spent sometimes a lifetime building them is as dishonest as it is stupid.

Choosing to redefine farming as a social or even political activity instead
of a business activity does not release the population from its need of food
or paid employment, any more that it releases food processing factories of
their need of agricultural inputs. 

Equally, any attempt to claim that farming skills are inborn, natural, inherent, intuitive or instinctive simply denies the existence of the vast range of technical, scientific, engineering, financial and marketing experience that farmers need in order to survive.

Glaringly obvious

In urging the international community to assist the Government in its
economic recovery and growth endeavours, the Deputy Prime Minister was
perhaps unaware of facts that are glaringly obvious to nearly everyone else:
Zimbabwe used to stand out as one of the Third World’s most successful
developing countries, but it chose to impose policies that have damaged or
destroyed most of its productive capacity.

It is now asking for assistance, not to put things right by fixing what was
broken, but to meet import bills, recovery expenses and lost tax revenues
with money that taxpayers in other countries have to earn and donate to the
people of Zimbabwe.

All this is necessary so that Zimbabwe’s government can pretend that it has done nothing wrong and has no need to admit making mistakes. As is the case with almost all aid, transfers of money to meet these requests will do Zimbabwe no favours.

Unless the country places its future into the hands of competent investors and business operators who can again base business decisions on the rule of law, on property rights and on security of tenure over freehold property, the country will remain dependent on aid.

Zimbabwe certainly needs aid. But it should come with the pre-condition that steps be taken to re-engage the Zimbabweans who have the skills needed to place the recovery onto a self-sustaining path.