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Stop killing the goose whose golden eggs you need… Zimbabwe GOVT vs Unions? (Part 1)

By Paddington Masamha

Food, shelter and clothing are the elementary human needs.

It is a common expectation of every worker that their employment income should; at the very least, capacitate them to own a personal home, have access to basic health care, provide a basic family meal and aid them to afford decent clothing. Any government which fails to provide these basic necessities of life to its workforce is a failure.

Paddington Masamha
Paddington Masamha

Once the economic inhabitants of any nation have limited access to the basic necessities of life, the welfare costs are passed on to the next generation. My poor health today is not only a burden to me, but extends to my children and grandchildren. My incapacity to own a personal home, is a burden to the next generation.

As a nation; deprived access to educational facilities, poor health facilities, poor infrastructure, and miniature productive investments etc. are a direct liability to the current and future generations.

A bleak picture is painted if one adds to this equation the never-ending struggles with erratic water supplies, intermittent power supplies, poor public amenities and the deplorable state of sewer sanitation. If this trajectory remains unabated, ‘poverty in perpetuity’ inevitably becomes a Zimbabwean heritage.

Zimbabwe is currently grappling with government and union deadlock for its civil servants particularly doctors, nurses and teachers. Continuous strikes, stay away, go-slows and labour unrests have become a national red flag that the leadership has been ignorant to solve.

No single economy can attract tangible investments where labour unions and government are constantly at loggerheads.  The health and education sector have been the grossly affected economic sectors.  

Killing the goose that is laying the golden eggs

Zimbabwean government is largely dependent on tax revenues. Personal taxes contribute the bulk of government revenue collections. Regardless of labour being the largest revenue contributor (laying golden eggs), government policies have largely been unpalatable and in the majority of times choking (killing the goose) the employed population.

The question therefore might be: What is killing the goose?

Broadly speaking, Zimbabweans have endured various phases of economic demise. The main one being the hyperinflationary phase euphemistically termed the Mugabe-Gonomics money printing period. Moreover, the poor masses have greatly been crippled with the currency summersaults from Zimbabwean dollars to the multi-currency system, the birth of surrogate currency economics (bond notes and coins), the surrogate currency morphing into the RTGS dollar and the final re-introduction of the Zimbabwean dollar.

In all these abrupt changes, it is the poor masses’ welfare which is decimated. One cannot be further from the truth by heralding that political greediness has destroyed the profitable ventures or activities of the general populace. Political decisions which ignore the conditions through which labour is expected to be productive but instead adopts militant solutions to labour disputes is not only short-sighted but counter-productive and self-destructive.

In more specific terms, the goose is subjected to unfavourable conditions but the farmer still expects the goose to incubate the golden eggs. For instance, the case being raised by medical doctors is not only salary linked but laments the deteriorating state of government hospitals and clinics which endangers health workers lives.

It is on public record that basic tools of trade such as ‘bandages, gloves and syringes’ are unavailable in most public hospitals and clinics. Medical drugs and equipment have also been scarce and in a deplorable state. The Zimbabwe Senior Hospital Doctors Association posited that ‘the hospitals remain poorly stocked and remain a death trap.’

As a result of the doctors declaration of incapacitation due to meager salaries and poor working conditions, unwarranted deaths from curable ailments are now commonplace. Instead of solving the teething dilemmas, government has continued with their relentless efforts to dismiss medical doctors. There is definitely bad blood between government and Zimbabwean doctors. The government workers blame government for engaging in ‘lip service negotiations’.

Through positing the previous ‘public promises’ made in March 2019 after the Presidential intervention to resolve a health crisis, the ZSHDA argued that such efforts were attempts of playing to the gallery through ‘fanfare and ribbon cutting’ initiatives. The association discoursed that the images which were circulated exhibiting warehouses full of drugs were mere smokescreens. The ZSHDA stated that ‘out of an inventory list of 2000 items, only about 60 had been purchased.’

The association also lamented over government vindictiveness and hostility by citing a case where a doctor who was undergoing an emergency medical procedure was handed over a disciplinary letter within the theatre. One would question where the relevant authorities’ priorities are?

A failed welfare promise-the rotten carrot of ‘Austerity for Prosperity’

The Zimbabwean policy direction was from November 22, 2018 pregnant with the ‘Austerity for Prosperity’ catchphrase. The 5 October 2018 Transitional Stabilization Programme (TSP) page 9 paragraph 24 projected that the economy was, “…to grow at around 9percent annually in the first 4 years from 2019…”

Running under the theme of “Towards a Prosperous & Empowered Upper Middle Income Society by 2030” the TSP was tabled as the necessary policy direction for Zimbabwe. Notwithstanding the 2019 negative economic performance, the leadership evangelized the gospel of economic prosperity by arguing that the pain was only for the momentary period.  

Page 10 of the TSP’s Macro-economic and Fiscal Projections predicted that annual inflation would average 5% both in 2019 and 2020. Without laboring with much analysis, in the year 2019 a negative growth rate is inevitable and the inflation rate has already reached hyperinflationary levels.

There is publicly available evidence in various media houses, radio broadcasts and televised programs when Zimbabwean leaders proclaimed public statements that prices would fall in certain months within the year 2019. In contrast prices ran amok in the year 2019. Fuel price which started the year at US$1.38 for diesel and US$1.43 (during the 1:1 era) is currently priced at ZWL$17.90 (diesel) and ZWL$17.44(petrol) basing on the 25th of November 2019 ZERA publication.

Having publicly boasted that the Zimbabwean dollar was the strongest currency in the region, the leadership was also humbled with the rapid currency depreciation. The then RTGS dollar started off trading at a fictitious rate of USD$1.00/ZWL$2.50 in February 2019. Presently, the RBZ’s asking price interbank rate as at 29 November 2019 was USD$1.00/ZWL$16.70.

The promised prosperity which austerity was poised to deliver failed to meet the benchmarks. In theory, the main austerity target is its direct influence on the Gross Domestic Product (GDP). So if one asks if the TSP achieved its target, the easiest answer would be-the dangled carrot of prosperity is rotten.

Economic growth statistics are negative, the promised ‘return to normalcy’ is hazarding ‘price instability’ and the currency crisis remains unabated. Nevertheless, employment incomes have failed to keep up with the massive inflationary pressures.

Paddington Masamha is an independent Financial and Economic Analyst. He can be reached on email [email protected] and Twitter @PMasamha

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