Maravi

(NEWZIMBABWE) Hope for the poor in welfarist budget

COMMENT - Praise singing for the MMD's austerity budget, which underfunds youths, agriculture and the army. Remember that the MDC did not want benefits from the diamond industry or mining at all. They wanted the likes of Anglo-American to keep it all, so they could 'create jobs for Zimbabweans' (hewers of wood, fetchers of water, anyone?).

Hope for the poor in welfarist budget
29/11/2011 00:00:00
by Toendepi Shonhe

THE US$4 billion 2012 National Budget presented by Finance Minister Tendai Biti last Thursday was by all measure, people-centred and problem solving. In this sense, the budget statement was both historic and democratic as evidenced by both its formulation process and the ultimate product.

Never in the history of this beautiful country has a Minister of Finance travelled the length and breadth of Zimbabwe to interact with Zimbabweans of all origins and political orientation as they aired their views, expressing their aspirations, engendering and rooting participatory democracy in policy making.

Consultations were carried out in both rural and urban areas, with labour organisations and employers associations, traditional leaders and war veterans, parliament and governments departments all to ensure that the views from the elites and those of the majority domiciled in the second economy are captured, what he described as both ‘enriching and humbling’.

The quality of engagements at the consultative forums was deliberative and participatory, giving ordinary citizens a voice on their future.

The budget statement therefore reflects that the crafters were fully informed about the situation in the country, making it truly people-centred and people-driven. In practical terms, the budget and the budgeting process recognise that ‘top-bottom’ approaches to policy only make people ‘subjects and objects and not shareholders and crafters’ of policy making robbing citizens the opportunity to define their destine and shaping their welfare.

The consultative process enabled the Ministry to establish the key challenges facing the Zimbabwean economy, and crying for redress. He summarised these as ‘political discord and disunity on key national policies, power and energy crises, unemployment hovering beyond 70%, transparency over diamond revenues streams from Chiadzwa, access to basic goods and services, including business licences, national identity cards and banking services, liquidity and high cost of money, labour market flexibility, wages and practices and their connectivity to productivity.

The broad-based consultations enabled the identification of the level of indebtedness of the central government to local authorities that is arresting productivity at local level, massive high and inefficient government expenditure, the need to prioritise infrastructure development, clean water supply, social security, agriculture support and food security, price stability and the need to ensure policy implementation consistency as some of the challenges urgently requiring government attention.

Zimbabweans who participated in the consultative process will find the issues they raised to be in sync with those underscored in the budget statement. The issues also resonate with citizens who failed to get an opportunity to air their views because some of the issues addressed in the budget are a common knowledge that they needed remedy.

Take unemployment as an example, with present estimates of 70-80%, every Zimbabwean knows that this is a national catastrophe, whether the people pointed this out at a consultative meeting or not. That the budget policy statement sought to address this challenge means that the Minister is sentient to the problems facings Zimbabweans today.

It is clear that an unemployment level of between 70-80% has a negative effect on the economy, making it the most damaging challenge facing Zimbabwe today. As such, any remedy that relegates unemployment cannot be the panacea for Zimbabwe.

The budget statement therefore identified measures intended to create employment opportunities for the unemployed and poverty stricken citizens. The budget statement focused on capital formation through infrastructure development and public works as crucial in fostering economic growth and in turn job creation, bolstering chances for the government to achieve its stabilisation role through its allocative responsibility.

The government has, therefore, placed emphasis on capital formation with significant resources being allocated for infrastructure development. In particular, at least US$300 million from diamond sales has been earmarked to contribute to a total of US$800 million reserved for infrastructure regeneration.

And yet, the most significant step taken to ensure employment creation is the setting up of a ‘job fund’ of US$20 million. This will be supported by some measures being taken to create a stable macro-economic environment appropriate for business and for economic growth. For instance, the national budget statement proposes a 25 percent increase in customs duty on fresh produce in order to protect local small hold farmers, promote growth and poverty eradication spurring job creation. A similar effect is envisaged on wheat flour import and the packaging of flour, rice and salt where a new duty was introduced.

In the same vein, the budget statement placed emphasis on the need to resolve the debt overhang, attracting foreign direct investment (FDI) that is critical for economic growth and employment creation, leveraging on mining, revitalising industry, through the Industrial Revival Fund of US$60 million, supporting SMSs to the tune of US$36 million, small scale irrigation schemes support for US$15 million and public works supported to the tune of US$3 million.

The public works programs are set to eradicate poverty, promoting food security, rural infrastructure development and maintenance for community development.

It is clear from the FDI figures, as a percentage of Gross Domestic Product (GDP) currently at 1.1%, being the lowest in the region, the highest being Angola at 22.8% in 2010, that political uncertainties and policy inconsistencies associated with the indigenisation law have had a negative effective on business confidence as well as peace and stability in the country.

No wonder, the budget statement puts emphasis on job creation rather than transfer of non-existent wealth as a policy priority. And off-course, this is timely and sustainable.

As highlighted in the budget statement, while the country remains reliant on internally generated resources and severely limited fiscal space, the budget statement has tried to respond to immediate and long term needs, mainly job creation and upliftment of the citizens and not sharing of a shrinking cake through a random indiscriminate indigenisation facade.

Toendepi Shonhe is the Director General of the MDC-T. He holds a Masters in Management in the field of public policy and writes in his personal capacity. He can be contacted on toendepik@gmail.com

Labels: BUDGET, MDC, NEOLIBERALISM, TENDAI BITI

posted by MrK @ 7:23 PM