Internationally acclaimed local economist Tony Hawkins says Zimbabwe’s economic revival hinges on the building of consensus between the ruling Zanu PF and the country’s main opposition, the MDC.
Hawkins, an economics professor who founded the Graduate School of Management at the University of Zimbabwe, made the remarks at a recent breakfast meeting hosted by the Institute of Directors Zimbabwe (IoDZ) to unpack the latest Monetary Policy Statement delivered by Reserve Bank of Zimbabwe (RBZ) governor John Mangudya.
“Ultimately the solution to Zimbabwe’s problems is political. You can fiddle around with the economy as much as you like but you are not going to get a lasting solution without some form of political and social consensus,” said Hawkins.
The respected economist pooh-poohed ongoing talks between President Emmerson Mnangagwa and opposition parties which have been boycotted by the main MDC, led by Nelson Chamisa.
“There is no point in dialoguing with guys who got less than 0,5 percent of the votes.
You really gotta dialogue with the Alliance (MDC Alliance) which had something like 44 percent of the vote,” he said. Hawkins said an agreement between Zanu PF and MDC has become inevitable because of the deteriorating economic situation.
“Whether it will be in the form of transitional authority or government of national unity, I am not a politician so I will not go down that road.
“But it seems to me that as the economic conditions become more difficult in 2019, government will be pushed more and more towards looking for a solution along these lines. That is what happened in 2008 remember. There is also international pressure for that kind of solution,” the respected economist said.
According to Hawkins, the worsening economic situation has forced Mnangagwa’s government to re-strategise due to their failure to get a much-needed international bailout to address its sagging foreign position.
“The exchange rate endgame, if there is such a thing, requires an international bailout, the prospects for which have receded quite a lot since the elections. “Government has subsequently shifted from Plan A which is international re-engagement to Plan B which is trying to borrow from the East which is China, Iran, Russia and Belarus looks to be most unlikely place to borrow money.
“Plan C, which is probably where we are today, is to try and build some kind of domestic consensus through dialogue,” he said.
Hawkins foresees an economic collapse if Mnangagwa’s government fails to build national consensus.
“There is a risk; some will call it a probability that the shutdown in January was the beginning of increasingly bitter exchanges between a cash-strapped government and angry urban work force.
“Angry because real wages are down by a third, the cost of living is rising sharply and the service conditions which they operate under are deteriorating,” he said.
Given the worsening economic situation, Hawkins is not convinced that the government will religiously implement its austerity programme. “At some point the government will have to try and buy off the urban electorate who voted heavily against them in the last election, which may mean wage increases, subsidies and perhaps a fuel cut though not in the near future. It may mean delaying increases in the price of electricity and so on, in other words making Zesa lose even more money than it is losing at the moment.
“We have a very serious issue. We have an extremely fractured and polarised society. We have a rural electorate which supports government and we have younger and urban voters demanding change. How this plays out no one can tell. All we can say is I think the social and political climate will probably worsen as unemployment rises and it will, as poverty increases and it will.
Exacerbated by the rise in inflation and the fall in real wages, the polarisation will worsen,” the UZ economic professor said. – Daily News