Politics, economics: Bane of Zim's socio-economic prospects (Part 1)

HARARE - A recent report on Zimbabwe authored by the International Monetary Fund (IMF) creates the impression that efforts of the economic team driving the country’s revival agenda are being undermined by political circumstances.

It notes that this economic team was forced to pay the 13th cheque in 2016 by government mandarins, which bonus payment had not been budgeted for.

Lately, there have been reports about President Robert Mugabe also reversing the decision to retrench 2 000 civil servants who were employed under the ministry of Youth.

What is coming out from all this is that there is conflict between economics and politics. It is also being implied that our economic think-tanks are not the cause of the rise in the fiscal deficit and the implications thereof.

A strong relationship exists between economics and politics. In fact, the performance of the economy has always been one of the key political battlegrounds in Zimbabwe and elsewhere.

Economic policy involves combining economics with a broader understanding of how to make policy work, whether politically, administratively, or otherwise.

Economists need political support to push through their policies and due to the fact that many economic issues are inherently political. Resultantly, economists need to be aware of this interplay to ensure that economics does not lose its appeal.

The next question then is; who should manage the economy — unelected professional economists or politicians who get elected but might not know about economics?

There’s no easy answer.

Naturally, it should be both. In a democracy, this should be the responsibility of elected politicians whose decisions should be based on advice from impartial economists and the electorate.

Their decisions should be based on evidence rather than looking for something to justify their political ideologies.

The IMF’s reports on Zimbabwe seem to suggest that Zimbabwe’s sound economic policies are frustrated by politics, given that some “good” policy recommendations do not see the light of the day while other “good” policies are reversed or some “bad” policies are imposed on technocrats.

Our challenges are largely fiscal and structural. Those that remain unresolved are political in nature. We have, therefore, seen failure by both the economists and politicians to understand and accommodate each other.

There also seems to be differences in ideology or schools of thought between these parties.

Our technocrats are more on the neo liberal side while the political side is shaped more by the Marxists or socialist background.

Resultantly, our technocrats, to some extent, view politicians as people with limited understanding of economics. As such, they want them to implement policies that may even push the politicians “out of power”.

The attendant resistance to some of the neo liberal policy options by politicians has now resulted in the country having a “good economic team” versus “bad politicians”.

The technocrats are happy with the pat on the back they get from international institutions for the recommendations they make even though some are not implemented or a fraught with delays.

Isn’t it time economists also seek to understand the other view and see how they can be blended together in a manner that reduces tension and moves the country forward?

Our economists believe that our salvation is in the IMF and hence they try by all means to please them and force government into arrangements, which principals have doubts in terms of their materialisation.

In the past, Zimbabwe paid $100 million to the fund, with the hope that we would get funding from the IMF. Lately, the country was working on the Lima debt arrears clearance programme, which has not yet materialised.

According to the IMF, the Lima process is said to be “facing severe headwinds” because of the need for a strong reform agenda on “political and governance reforms, including human and property rights” to facilitate debt treatment and the unlocking of financial support. This is despite the fact that the multilateral institutions were all engaged at the same time and had agreed to the proposal.

Politicians see through these things that economists fail to see and at the end of the day feel vindicated on the need to go it alone.

At the same time, it signals a marked shift in goal posts by the multilateral institutions and the tone of the language now mimics that of the major shareholders.

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