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(HERALD) Doing business: Zim vs the world

Doing business: Zim vs the world

The World Bank’s IFC recently released its Doing Business 2010 report titled Reforming through difficult times. The annual report looks at 183 economies.

The World Bank worked with over 8 000 specialists including over 15 from Zimbabwe that included Fin360’s own. The report compares among other things, the ease of doing business in the 183 economies selected. Zimbabwe is ranked at 159 overall while the pole position is held by Singapore. It is rather unfortunate that data collection for the report was done in about six months spanning last quarter 2009 to first quarter 2010. This period was crammed with a number of socio-economic developments some of which were not fully implemented at the time of final data synthesis.

Nevertheless, the Zimbabwe specific report and other sources all reveal that there is still a lot to be done in order to make a positive mark on the global front. We believe we can, if we choose to, rank among the best African economies. But Zimbabwean statistics simply don’t balance. For one, the resources we have do not match the GDP for various reasons. We managed to come across some statistics apparently correct as at January 2009. Some are shocking and others just leave you awe struck at the level of ignorance we have exhibited as Zimbabweans in various issues.

It’s not all gloom though, according to the CIA World Fact Book — January 2009, Zimbabwe’s literacy ranking is 107, this puts us ahead of other emerging economies such as South Africa and Egypt which come in at 126 and 157 respectively. Our literacy ranking then was apparently 90,7 percent. So where do we get it wrong? How are we missing the mark? Why can’t we translate the level of literacy to higher GDP per capita? It is common knowledge that Zimbabweans are doing exceptionally well in foreign economies, so why can’t we make changes that positively affect our economic direction. How is it that we had a literacy rate of 90,7 but an unemployment rate of 80 percent. (One thing Zimbabweans have also mastered is the art of blaming, the questions raised above will likely be referred to others thought to be responsible and yet (at some point) everyone has contributed to the successes and failures of the nation.)

In any event what makes it simpler to do business in one country and not in the other? If one country can put in place favourable policies that build investor confidence and translate in an ease of doing business why can’t we replicate this? Policy effects can easily be modelled. Investment advisors will agree that there has been of late major challenges in addressing the Indigenisation issue, there are questions flying in from all quarters, and in some instances advisors are defending and interpreting policies (some of) which they don’t understand. Businesses ought to be simple and straightforward, and so should be tax and all other revenue collections. Not only that, licensing and regulation should also be made simple, particularly when the recipients are bona fide.

Other frightening figures are of course in HIV/Aids prevalence. Apparently the number of people living with HIV/Aids was 1 300 000 then, about 100 000 more than those in the United States of America.

The worrying thing is that the Zimbabwe population is anywhere between 11,5 and 13 million while the US population is at anywhere above 307 million. These are thus some of the issues that need to be addressed in order to build a solid socio-economic core that can be sustained over many generations to come.

Back to doing business; it’s rather frustrating many a times when a foreign investor tells you in the face that they are not willing to participate in a certain sector of the economy, because "security of my interests is not clear", or because they need to wait and see what will happen with the GNU, GDP, GNP and all other G’s. Why does it all have to boil down to politics at times? Yes, you are right, policy matters and investor confidence will mostly be influenced by this, but it’s only to the degree to which we (the people) decide it to. Ignorantly speaking why should a squabble between two entities affect the price of my eggs? To what degree should this have an effect on investments, what quantitative factor in policy decisions should be attributable to pricing investments so as to provide a necessary discount in times of uncertainty? Simply put — quantifying the risk.

Zimbabwe boasts of a huge labour force that can be evidently utilised in growing the countries books. The past 10 years have given rise to resilient individuals who have survived the most hopeless of periods and have thus the necessary core values to succeed in these times as progress beckons.

Doing business ought not to be like riding a bicycle up a hill particularly when this can be avoided. Zimbabwe has the potential to rise to the ranks of some of the fastest growing economies. But, only if we choose to.

As part of our CSR we are designing business models for unemployed individuals (youths, women and men) in poor communities. The models work with an initial US$50 injection: The target is creating an income of at least US$150 per month which should go a long way in sustaining families and communities. Send us your suggestion on how this can be achieved.

l Fin360 Research is an African Financial Research and Advisory firm.

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Labels: DOING BUSINESS 2010 REPORT, IMF

posted by MrK @ 6:06 PM