By Donovan Chimhandamba
Program director and Brawlers Captain, Tau Nkomo. The last few weeks must have been a roller coaster for you. Putting together a function of this quality and yet brawling on a shoe string budget is just an amazing feat. I can confirm that the situation at the Brawlers event has moved to another level (remember SB Moyo).
Well-done Captain and your team, you deserve a round of applause on a job well done!
Your Excellency – Ambassador David Hamadziripi. We are honoured to have you and Amai Hamadziripi with us tonight at our prestigious Brawlers Annual Year End Function.
Today marks the first official Brawlers function that you meet the wider members of Brawlers community, a day that you continue with the tradition we set with your predecessor, whereby you share with us some insights regarding our country Zimbabwe and challenge us to do more to help build our country.
Your presence is most appreciated and seeing Amai Hamadziripi looking glam and young sitting next you, I think we are going to see some inspirational dance moves tonight.
Thank you for gracing this function.
Consular General vaMukonoweshuro you have become part of our furniture. Members of the diplomatic corps, and the Brawlers community at large, it gives me such great pleasure to be here and see that our Brawlers vision is indeed alive and lives through us.
Part of the vision that we set for ourselves was to find ways to mobilise and aggregate diaspora resources towards the rebuilding of Zimbabwe’s critical infrastructure. In order to do this, us as Brawlers and diaspora, we need to continue to understand where our country is headed economically. What is happening in Zimbabwe has many of us asking questions:
- Are we moving forward or backwards?
- How long will it take to get Zimbabwe to where it should be?
- How do we see the opportunities through what seems to be a regressing economic environment filled with a lot of noise and dust?
To help us answer some of these questions, we thought we should have His Excellency Ambassador David Hamadziripi give us a keynote speech focusing on the topic “Zimbabwe – a transitioning economy and the opportunities for diaspora”.
But before His Excellency gives his keynote address, lets spend some time defining and understanding at a basic level what a transitional economy is and what typically happens in those countries both at a macroeconomic level where there is policy reforms and at a microeconomic level where all our businesses operate in.
This is a heavy but necessary subject for a night like this, so I advise you to keep the wine flowing.
Our Transitional Economy
So first, a Transitional Economy is an economy which is undergoing change from being a centrally planned economy to being a free market based economy. So one could say it is a state moving from being a communist state to a free economy or otherwise moving away from being a government controlled economy to a free market economy.
Generally the countries that go into transitional processes are countries either coming from a civil war (what we call the fragile states) or countries coming out of long periods of economic decline due to bad government policies or sanctions and economic isolation.
So as we talk tonight, keep this at the back of your mind, Zimbabwe has joined the many other nations that are trying to move from a centrally planned or governed economy to a free market economy in order to reverse years of economic decline.
So Zimbabwe is a transitioning economy and the next question is what happens in transitioning economies.
Transition economies undergo a set of structural transformations intended to transform formerly government controlled institutions and develop them into market-based institutions. This is frequently accompanied by liberalization of markets by either the removal of statutory instruments that were designed to protect government monopolies or state sanctioned cartels or just removal of trade barriers.
So let me give some example to put context using our former colonial parent Britain:
Britain emerged from the 1939-1945 war triumphant, but economically exhausted. It was one of the top three
superpowers, although in reality a distant third behind the United States and the Soviet Union. Britain emerged as a model social democracy, combining planning (command economics as you would know it as) and collectivism with civil liberties.
In the mixed economy the state owned the utility companies such as gas, electricity, coal, rail, etc and regularly the state would intervene and plan for these utilities. Simply put Britain was a centrally planned economy or command economy till the late 70’s.
Beginning in 1979 with the newly elected Thatcher Government, Britain embarked on a decade long of economic reform aimed at transitioning its economy into a free market economy from being a command or centrally planned economy.
A centrally planned economy
Thatcher was the most unpopular Prime Minister known as the Iron lady. But she set Britain on a path that would see it pull itself out of the abyss of economic paralysis and become more market responsive.
Through this British transitional period there has been large and small scale privatization of formerly state owned and run British institutions. British Airways, British Rail, British Petroleum (BP), British Broadcasting Corporation, Rolls Royce, British Rail, Cable and wireless, London Buses, Liverpool airport, Regional Water Authority and most recently Royal mail and the list is endless.
The real point here is there was a massive shift in state role within these command businesses. The state became a regulator and not an operator. Coupled with a financial sector development strategy Britain saw a massive jump in private capital investment into previously state owned enterprises as the private sector took ownership of these assets for profit and leveraged the financial capital markets.
What Britain went through, China did from 1978 with President Deng who reformed China from a pure communist state to some level of a mixed free economy. To join the European Union on 1 May 2004, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia had to complete the transition process.
South American countries have to a large extent failed to transition their economies as transition trajectories have varied considerably in practice. In some cases reforms have been accompanied with political upheaval, such as the overthrow of a dictator in Romania, or the declaration of independence by Croatia.
Even Thatcher herself and John Major failed to hold on to power as the population felt punished and impoverished by their transition economic policies.
What this means for Zimbabwe
This is important to understand in the context of Zimbabwe.
The current currency reforms, state institutional reforms, privatization proposals and fiscal consolidation measures under Minister Mthuli Ncube’s Transitional Stabilisation plan are leaving most confused as the changes seem to wreak havoc and pain to the populus.
It is this confusion and pain we are seeing we are trying to make sense of and determine our role in all of this. We know that from most economies that have gone through transition process, they rapidly privatized small enterprises and small units of state-owned firms, thus creating small and medium-sized enterprises which went into the hands of the new millionaires of today.
In conclusion, could Zimbabwe’s transitional economy be an opportunity for us to emerge as the owners of the new small to medium businesses in Zimbabwe? Russians and American millionaires were born during such planned havoc.
Your Excellency what is the space been evacuated by government as it transitions from a command economy to a free market economy that we should look at? As part of DIDG, we are of the view that Zimbabwe probably started transitioning in 2016.
For today, I will stop here and hope that you will have a merry Christmas and a prosperous 2019.
Donovan Chimhandamba was speaking at the Brawlers Annual Year End Function this week.
Washy Mashanda, Tau Nkomo, Donovan Chimhandamba
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