Friday, November 13, 2009

(HERALD) Zim must get rid of underground economy

Zim must get rid of underground economy

EDITOR — Since the introduction of the multi-currency system, I have been watching to see whether or not the economy is growing and we are achieving any wealth creation.

Besides the stability of the economic climate where inflation has virtually been eliminated or reduced to the point of insignificance, we have not been statistically informed as to the performance of the economy.

In this environment of the global economic meltdown any data that can come from our statistics office would be greatly appreciated. For example, we need to know whether we have reduced unemployment; how much we are exporting every month; the balance of payments of imports versus exports; productivity figures; revenue collection data.

One economist could not understand, given the level of Zimbabwe’s lifestyle, why countries like Malawi, Zambia and Botswana are collecting more taxes than Zimbabwe.

They can afford to pay their civil servants real economic wages in US dollar terms than Zimbabwe. Something is wrong somewhere. His explanation was that Zimbabwe has an underground economy, which sustains the high lifestyles of many citizens. Very little tax is being collected from this under- ground economy.

This underground economy has nothing to do with flea markets that are being raided by Zimra but has to do with what the Kenyans call, "WaBenz (the Mercedes-Benz class)". If there is wealth creation judging by the brand new cars being driven which one German professor remarked that we did not have suitable roads for, then one cannot understand why there is very little revenue collected to pay civil servants better salaries.

A lot has been said at conferences and at seminars but one thing is missing.

It is the science of economics. To explain this, the Chinese say that it is the concept of profit which, in turn, is wealth creation. They say it’s nothing to do with politics but just making money. This is why the Chinese and the Japanese do not interfere in the politics of other countries. But wealth creation has a social responsibility that is to pay taxes to the state for the development of the country. It is also to pay civil servants real salaries.

Unless Zimbabwe adopts a culture of economics, no meaningful development will take place.

Albert Nhamoyebonde.



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