adminsenior Government officials.
Economic Planning and Investment Promotion Minister Tapiwa Mashakada revealed that Zimbabwe has to target to grow the economy at 14,16 percent for the next 19 years to get to US$100 billion.
He said the electricity generation target should actually be 15 485 MW by 2030 instead of the current preoccupation with 2 200 MW. In turn, Minister Biti indicated that our planning should be influenced by different accumulation models to take us to US$100 billion by 2030.
Minister Kasukuwere urged Zimbabweans to indigenise their way to US$100 billion. In conclusion, Vice President Mujuru told the meeting and the country that economic growth is a “decision” and it is time the country made that decision. She went on to second the “Nyanga Resolution” which states that the country would work towards a US$100 billion economy by 2030 as the bare minimum. All delegates at the meeting endorsed the resolution.
The series of five articles which follows have been compiled by Mr Joseph Mverecha of ZB on the theme of “Building US$100 Billion Economy for Zimbabwe by 2040”.
“The Need for a Clear Vision and Mission for Zimbabwe”
Zimbabwe as a country is immobilised and divided along too many fault lines – the rich/poor divide, the racial divide and of course, the perennial political divide that has defined nearly every aspect of Zimbabwean life.
In such an environment, clarity of purpose, the basis of a collectively shared vision and mission is a commodity expendable in the current crisis.
The country needs a clear vision and mission that harnesses the nation’s collective energy for economic growth and national development.
In addition to fortitude and simplicity, national vision is decidedly one of the greatest blessings that Deng bequeathed to China. Mission mindedness has naturally overflowed from the vision.
China is seeking to achieve global economic dominance and they are gunning for that objective with no equivocation. Everything else is ancillary, incidental and subsequent to the national imperative. China has no multiple and conflicting goals and will not subordinate the main objective. In Zimbabwe, collectively, we need to recognise that our diversity is actually our strength and not weakness – we can forge a common vision regardless of our diversity.
FDI and Dynamics of Economic Growth
The global economy is significantly driven by foreign direct investment. The fastest growing regions of the world; East Asia and Latin America are also the regions with the largest shares of global foreign direct investment. The same regions have also made rapid progress in achieving poverty reduction and attainment of other Millennium Development Goals.
On the contrary, Africa (in particular SSA) has a paltry share of global FDI – less than 10 percent of Global FDI. As an example, in 2010, total FDI for Africa amounted to US$55 billion – less than half of China’s FDI.
Foreign Direct Investment plays a critical catalytic role for economic growth and many countries have benefitted from FDI flows. Peru was a basket case, with hyperinflation as recent as 1990, but following the reforms incepted in 1991, the economy has achieved consistent growth for two decades. Countries as diverse, geographically as Tanzania and Vietnam (and numerous others) have achieved consistent growth on the back of FDI.
An Integrated Economic Development Model
One of the critical factors accounting for our less than optimal economic performance over the years, has been the absence of an integrated development model. Fragmentation is one of our most besetting challenges. As such, we do not optimise on existing synergies, within Government and also within the private sector. Many countries abroad have long recognised that you cannot build a sustaining competitive advantage in a globally changing environment on the basis of piecemeal approaches to structural, macro and micro-economic policies, coupled with a low-intensity war of attrition between key stakeholders – Government, business and labour.
The country needs an integrated economic development model and the recently launched Medium Term Plan (MTP) is therefore an important step forward. What remains is to actualise the MTP implementation, monitoring and evaluation.
Understanding Global Dynamics
The Chinese understand the dynamics of the global economy; its flows, discontinuities, ebbs and tides. They know how to apply the dynamics of global economics to their advantage. Firstly, globalisation implies limitless possibilities for growth and economic development, but there are significant and amplified downside risks that must be managed proactively.
For the Chinese, the interplay of a large domestic market, the excess supply of low cost labour coupled with falling barriers to international capital flows combined to create a level of potency rarely witnessed since the rapid industrialisation of North America over a hundred years ago.
The Chinese duly obliged. Steadily and consistently, they have implemented the kind of economic, institutional and regulatory reforms that amplified Foreign Direct Investment flows, from an average of US$1,5 billion per annum in 1980, to about US$40 billion per annum in 1999 and currently stands at over US$80 billion per annum.
l Joseph Mverecha is the Head – Group Economics and Strategy, ZB Financial Holdings. The views he expresses in this series are, however, personal and do not necessarily reflect the views of ZB Financial Holdings as a group.
Online Reporter