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Chris Chenga Open Economy
It is difficult to sustain a stable country without the majority of the citizenry in the middle class. This is empirical fact spanning across multiple contexts evidenced over the last century. Mao’s Cultural Revolution was fundamentally triggered by an unsustainable macro-economic imbalance. America’seconomic growth cycles are traceable to moments of deliberate interventions which strived for sustenance of a middle class.
The consistency of social harmony in what are considered relatively progressive states, particularly in Scandinavia, were a result of social contracts which persuaded equitable contribution towards a sustained middle class.
The recurring incidence underlying these disparate social, economic and political structures is obviously the continuous restitution of balance in a country; a middle ground where the majority of citizens can find content for sustainable continuity.
Regrettably world over today, as if the lessons were erased from memory, the virtue of a sustainable middle class withers into the background of public discourse. Quite often it fades into confined platforms such as philosophical academics and studious think tanks.
Middle class discourse has no place in mainstream platforms.
In the most regrettable scenarios middle class rhetoric is misrepresented in the loose identity of populism; adequate qualification for mainstream dismissiveness.
Accordingly, it should be little surprise that the greatest cause of anxiety and stimulant of conflict in most regions of the world today is disparity of living standards.
An inherent result of the lack of stability brought about by broad middle class existence.
Astute Zimbabwean observers would benefit greatly from seeking better guidance and start to consider how a middle class existence may help to boost our present circumstance.
Indeed much like our African peers, the last century has not been a model of middle class experience.
Most indigenous African populations were marginalized from economic strata that contributed to any equitable balance in an economy.
Thus, an appreciation of a middle class may not have been convincing in terms of experience. Erudite Zimbabweans would be careful of a misleading nostalgia that we often entertain when lamenting our economic challenges, the majority barely had any true middle class experience.
An even greater and more immediate challenge would be to justify a middle class creation taking precedence over the excitement that new access to means of production has on our political impulses.
Notwithstanding, our present fiscal squeeze can be a convincing case for the need of deliberate middle class existence in our social construction and economic policy making.
Government is struggling to meet civil servant salaries, recently offering a US$100 payment with the rest to be settled later. Apparently this offer has found mixed responses, the majority expressing unease.
It is important to perceive this stand off as a middle class issue.
Contrary to what popular discourse has allowed, a large group of civil servants represent typical middle class occupations.
For instance, teachers, doctors and other skilled professionals found in public entities are involved in what should be middle class professions.
This is especially within a context of the economic contribution that is expected from their output productivity and their earnings in terms of spending and savings.
As is the nature of economic growth, the fiscal squeeze currently experienced by Government is in fact attributable to the depressed productivity and low earnings of civil servant middle class professionals.
Contrary to predominant views retained in Government, it will not be multi-lateral credit lines or the successful offering of bonds which will solve our fiscal squeeze.
Instead, it will take a change in the value perception towards professional civil servants to view them as a middle class grouping, and also structural reforms that will stimulate the professional civil servants productivity.
On that premise, the Comptroller and Auditor General report becomes imperative. Public entities and the civil servants functioning within them are not achieving adequate productivity.
By not offering their supposed products or services efficiently to market participants, the economic loss creates fiscal contraction.
More simply, inefficiency and low productivity in the civil service means fewer opportunities availed for market participants to create taxable revenues.
Consequently, over a sufficient time series, as the tax base in our country shrinks, there is a shortfall in the salaries available to pay civil servants themselves.
Again, challenging conventional discourse, our recurrent expenditure budget is not necessarily too high in absolute terms. Grade D1 civil servants, who are skilled professionals and should be perceived as middle class, are paid US$420 a month.
These are middle class professionals whose salaries must suffice for mortgage payments on a middle-income home for a household of at least three children, with enough savings to dedicate into a pension fund that provides for subsistent retirement at an average age of 65, and still leave enough as disposable income.
Evidently, these salaries do not meet these standards, and should be viewed as an economic deficit in a stable economy.
The economy is suffering because of a lack of well-paid middle class civil service. Their earnings would be going to enhance aggregate demand through consumption and their savings would have a huge multiplier effect through longer term capital investment.
The notion here pushes to inspire that structural reforms in public entities should be put in place to enhance the civil services’ efficiency and productivity output.
It is only when efficient public entities serve the greater economy of market participants can we then increase our tax revenue, simultaneously lifting the salaries of what should be a middle class grouping.
This sequence is a mandatory precondition if we are to overcome our present economic circumstance and create a sustainable growth trend. D1 civil servants must form a notable part of our middle class.
It must be emphasised that it is incorrect for Government to source multilateral credit lines and sovereign loans without putting effective reforms that enhance the depressed productivity of public entities and the civil servants working in them.
This will only exacerbate our debt burdens. The Comptroller and Auditor-General’s report should be taken seriously.
Moreover, it is especially unsustainable to source tax revenues through traffic fines and higher taxes on a shrinking tax base. It is misguided policy.
We need a stable middle class that creates wealth, and is rewarded for notable productivity output. The civil service represents a large group of what should be this middle class.
Government must inspire productivity output and offer good remuneration for this economic strata.
Online Reporter