MDC Alliance manifesto: A snake oil sales manual, or silver bullet?

The MDC Alliance’s “bullet train” political campaign has clearly been quick off the mark (no pun intended).

Perhaps too quick off the mark to the extent that they had raked up in excess of 40 rallies without a manifesto from which their campaign message was tethered.

And without such an anchor to their messaging — which, however, has been welcomed as acceptably visionary by their starry-eyed supporters and derided as “whimsical and outlandish” by critics — their policy blueprint was undoubtedly going to invite both scrutiny and interest.

Promising bullet trains, spaghetti roads and solving the cash shortages in two weeks, especially to an electorate that is weary of economic challenges and wary of expedient promises, was always going to be an expensive bet.

This might as well have been the reason why BBC’s Stephen Sackur, during his May 11 interview with MDC Alliance’s presidential candidate Mr Nelson Chamisa during the BBC HardTalk programme, sought to test the MDC Alliance’s inclination towards populism at the expense of credibility.

But on Thursday, the MDC Alliance finally released its 95-page manifesto, SMART (A Sustainable and Modernisation Agenda for Real Transformation), exactly 27 days after Zanu-PF’s May 4 launch of its own 78-page policy blueprint.

And it makes interesting reading.

Quite clearly, as will be highlighted below, most of the various proposals that are made in the document are either being implemented, have been implemented or have been proposed by the new political administration, particularly after the political transition in November 2017.

But, most importantly, while there seems to be convergence on what needs to be done, there are noticeable differences on how this could be done, which raises fundamental questions on the viability of the plans, including the ability to conceptually appreciate the gravity of the current economic challenges and the practicality of policy options.

Perhaps examining the empiricism of four key proposals of SMART on cash shortages, agriculture, economic reform and foreign policy might help to understand better the MDC Alliance’s key campaign message ahead of the July 30 elections.

Cash crisis

At the heart of the ordinary electorate are the cash shortages plaguing the nation.

The MDC Alliance says half of the cash shortages are caused by confidence issues, which will naturally disappear when they are elected into office, while a proposed “ordinance” to scrap the bond note will help materially make an impact on improving the situation through reinforcing the multi-currency system.

But having made such a diagnosis, on page 25 of their document, they seem to concede what economists have always been advising — that the cash shortages are being caused by huge trade deficits, where, in simple terms, imports are far exceeding exports.

“The Government has continued to run huge budget deficits that have been unsustainably financed through domestic borrowing.

“Consequently, this has manifested in debilitating cash shortages, liquidity crunch and crowding out of private sector investments, thereby arresting the overall economic growth,” reasons part of the manifesto.

Budget deficits are not peculiar to Zimbabwe.

The US, the world’s biggest economy, last year ran a budget deficit of $666 billion.

However, for most African economies, balance of payment support, especially from international financiers such as the International Monetary Fund (IMF), have been critical in stabilising economies.

Short of exponentially increasing exports more than imports — made all the more difficult by the need to import more capital goods and raw materials for a recovering economy and the use of the US dollar as a unit of exchange — the cash shortages are more likely to continue, particularly where recourse to international financiers is not possible through the Zdera sanctions regime, which makes it illegal for international financiers to support Zimbabwe.

Renowned lawyer and businessman Mr Tawanda Nyambirai made this observation on his Facebook page yesterday.

“A successful currency reform agenda must not seek to abolish these alternative currencies that the public already has different measures of confidence in.

“It must reinforce that confidence and get rid of the fiction of a 1:1 rate of exchange between these currencies and the USD.

“The rates are what they are in the market. What we need is stability in the rates.

A precondition to the creation of that stability is the recognition that we do not generate enough US dollars to fund our imports in addition to paying for local productivity,” he argued.

And the caveat to accessing balance of payments support and increasing foreign direct investment is to legitimately engage the international community, and the July 30 elections, provided they are credible, free, fair and transparent, would naturally provide the basis for such re-engagement.

This is why it is argued that re-engagement after the elections will provide the silver bullet to cash shortages.

And the proposal to join the Rand Monetary Union, now the Multilateral Monetary Area (MMA) — itself a creation of countries that are geographically in or near South Africa (the hegemonic economic power in the union) such as Lesotho, Swaziland, Namibia, whose economies are inextricably linked to Pretoria — as a long-term solution is curious.

It arguably surrenders the monetary sovereignty of the country, as the South African Reserve Bank (SARB), as the issuer of the unit of exchange, the rand, will be the paramount institution, making Zimbabwe an economic appendage of South Africa.

While debatable, this has to be interrogated further, especially at a time when the world is currently facing the discomforting fact of Brexit and a US government’s will to assert its own economic sovereignty.

This could be the reason why the MDC Alliance is proposing stripping the powers of the Reserve Bank of Zimbabwe (RBZ) through creating a creature called the Financial Affairs Regulatory Authority of Zimbabwe that will supervise and carry out surveillance of the financial sector, and limit the functions of the central bank to monetary policy “management” and overseeing the national payment systems. Food for thought.

Red flags in land and agrarian reforms

While the MDC Alliance and Zanu-PF manifestos are agreed on the need to modernise agriculture and the agricultural value chain, there are crucial proposals that need to be interrogated through the SMART agriculture proposals by the former.

In essence, on page 45, the MDC Alliance proposes to scrap the Special Input Support programme, or Command Agriculture, replace 99-year leases with title deeds and, similarly, issue transferable certificates of occupation to communal dwellers, including introducing a land occupation and use tax purportedly to improve production.

Viewed at face value, these proposals might be considered as noble to boost yields, but looked at closely, there are red flags that might threaten to reverse the land reform programme, which was implemented to democratise land ownership.

Not only that, it also raises fundamental questions on ownership of agricultural land by the State.

By issuing title deeds, which necessarily do not have a “race stamp” — guaranteeing that they can be only transferable to blacks who the land reform exercise sought to deliberately empower — it means the land, though issued to beneficiaries for free, can easily be traded, sold, or even foreclosed by financial institutions.

Rather than labour on the farm and fend off mounting debts from banks, it might be an easy option just selling off the land, and considering the state of the economy, this might trigger a wave of land sales to people of means; thereby negating the fundamental drive of the land reform exercise.

And what then becomes Government’s role in re-organising the land? And most crucially, what then becomes of Section 72 of the Constitution, which asserts the “rights to agricultural land” and extensively spells out the role of the State?

So, how does such a laissez-faire approach to land become possible in view of such a constitutional provision?

Does it mean the Constitution has to be amended?

Again, some serious food for thought.

Further, after successfully redistributing the land, with emphasis now shifting to hygiene issues of rationalising ownership and farm sizes, how can the farmers be capacitated, particularly in such harsh economic conditions that have been with us for the past 18 years?

While Zanu-PF has proposed to extend the provision of free inputs under the Presidential Input Support Scheme for soyabeans, cotton and maize for vulnerable households, including providing tractors, combine harvesters, stockfeed, manufacturing equipment “on a cost recovery basis” to commercial farmers, the MDC Alliance says its role will be limited to supporting vulnerable communities and regulating the sector.

It also indicates that capital and land loans will be provided by commercial banks and a Rural Development Fund, which they are proposing to create.

But cutting back agricultural subsidies might have the unintended consequence of further encumbering farmers who seemingly still need the much-needed lift.

The Alliance also promises to ensure that “every farm” — yes, every farm — will have mechanised farming equipment for tillage, harvesting, transportation and storage, but it doesn’t spell out how this will happen.

The jury is still out on the wisdom of introducing a land occupation and use tax (land tax), even making communal land transferable, albeit through the involvement of traditional chiefs.

Feasibility of $100 billion economy

When the MDC Alliance, through one of its principals, Mr Tendai Biti, said they wanted to create a $100-billion economy in the next 10 years, the market was naturally curious to find out how that could be possible.

Already, Zanu-PF has indicated that it intends to grow the economy at a rate of 6 percent per annum in order to achieve middle-income status in the next 12 years, but the MDC Alliances believes this is unacceptably unambitious.

Overall, the Alliance plans to grow the economy at 10 percent in the 10-year period through 2028.

But there are salient features to this plan, which need to be empirically examined.

The Chinese now call it the “standard of judging the truth”.

As explained on page 35 of their manifesto, the MDC Alliance envisages that the economy will grow 8,9 percent in 2019, 16 percent in 2020, 15,9 percent in 2021, 13,1 percent in 2022, 12 percent in 2023, 11,7 percent in 2024, 10,9 percent in 2025, 10,6 percent in 2026, 10,2 percent in 2027 and 10 percent in 2028.

Is this practical?

The Chinese economic miracle — which was charted by a 74-year-old Deng Xiaoping in 1978 (since the correlation between age and ability to deliver has become an issue in this election) — saw the Asian country being transformed from an economic backwater to a moderately prosperous State within three decades, growing at an average rate of 9,6 percent from 1989 to 2018.

Growth peaked to an all-time high of 15,4 percent in 1993 and a low of 3,8 percent in 1990, highlighting the boom-and-bust cycles of both internal and global economic growth.

A putative MDC Alliance government, therefore, has to triumph this.

Last year, the World Bank forecast Ethiopia as the fastest-growing economy in the world, with growth coming in at 8,3 percent.

But how will this breakneck pace of development be funded?

The answer seems to be on page 31 of the manifesto, which reads: “With the aid of its international partners, including financial institutions and international development agencies, the MDC Alliance government will organise a major conference to map a way forward on the following issues: (i) financing the reconstruction agenda with the SMART pledge”.

Not only that, the MDC Alliance has sworn to introduce fiscal discipline as highlighted by the proposal to establish a 15-member Executive, but reading through the document, it seems they are also creating additional cost centres that an overburdened economy, which they describe as “fragile”, cannot be possibly expected to shoulder, especially at a time when Government’s recurrent expenditures are presently in excess of 90 percent of revenues.

For an ostensibly broke Government, introducing free basic primary education; grants for tertiary education students and the disabled; grants for the elderly (above the age of 65), who will only receive free health care; and subsidised access to essential services for war veterans — though noble — might in the interim be as superfluous as the fifth wheel.

The MDC Alliance government will also be expected to bankroll additional commissions and institutions they intend to create such as the Planning Commission; Financial Affairs Regulatory Authority; independent Debt Management Office; Banking Ombudsman; Housing Ombudsman, among others.

Surely, financing all these programmes, while also pursuing major capital projects such as building a new pipeline from Beira to Zimbabwe and new railway line from Chirundu to Harare, which the Alliance plans to do in five years, is a bit onerous.

Conversely, Zanu-PF has premised funding its programmes through re-engagement and promoting FDI, while at the same time adopting austerity measures and fiscal discipline.

To date, it claims to have attracted FDI commitments of more than $16 billion in the last five months, a figure some believe has been unrealistic and inflated.

Yet in the book “China Emerging — How Thinking About Business Changed”, author Wu Xiaobo, claims on page 16 of the book that: “In a book called ‘The Building of Modern China’, author Peng Min reveals that, in 1978 alone (when China’s reforms began), agreements were signed for more than US$7,8 billion (a big sum then). Of this amount, around half were signed in just 10 days, from December 20 to the end of 1978.”

And this is worth reflecting on.

Foreign policy

Although both Zanu-PF and the MDC Alliance are agreed on the need for re-engagement, the ruling party, which makes re-engagement part of the central themes of its manifesto, anchors its efforts on “mending strained international relations, strengthening existing ones and creating new friends”. (page 15).

It further claims on page 55 of its manifesto that it has successfully engaged external creditors.

Most notably, on April 25, President Mnangagwa announced that the row between Harare and London, which mutated over the years to become a multilateral issue, was over.

The MDC Alliance is equally clear on its foreign policy position: “The MDC Alliance government will pursue a conservative foreign policy in respect of which it will remain non-aligned and will seek to make friends with every decent state in the world, that shares its values of democracy, constitutionalism, socially just transparency, openness and inclusivity.” (Page 25)

Except there is one problem — Mr Nelson Chamisa announced the opposition party’s allegiance to Israel, emphasising that it was important to provide that “spiritual connection” to the country.

But this is not the issue.

Siding with one party in the Middle East, widely considered to be an aggressor in the volatile Middle East, is very worrying.

But observably, the MDC Alliance’s manifesto seems to be decidedly American in character.

It talks about the need to “pursue happiness” in the same way that the American Declaration of Independence talks of “life, liberty and the pursuit of happiness”; the Alliance talks of supporting Israel and putting up an embassy in that country seemingly in the same manner the US government has put up an embassy in Jerusalem on May 14; it talks of rejoining AGOA (African Growth and Opportunities Act), which raises a lot of questions when they say they will let the “flag follow the dollar”.

While re-engaging the Americans and normalising our relations with them is arguably in our best interests, the most fundamental question is, what can be derived from overly patronising them, especially at a time when Washington is currently quarrelling and seemingly shutting the door to both friend and foe, not least its neighbours Mexico and Canada?

Obviously, the tensions surrounding last week G7 meeting are both poignant and instructive.

Refreshing proposals

But there are refreshing proposals, especially on trying to create a legal framework on cryptocurrencies, including creating an e-filing system for legal proceedings and correspondence in line with creating IT-enabled efficiencies and cutting costs.

Likewise, IT-enabled policing is very welcome in view of how China has managed to combat crime through technology.

Uncanny similarities in policy

The MDC Alliance seems to be convinced that Zanu-PF is an unmitigated disaster, and in their manifesto, it seems, they cannot bring themselves to accept that the course taken by the new political administration in its new trajectory to promote economic growth is workable.

And they try by all means to tweak some of their policy proposals to make them seem different from Zanu-PF’s plans. Such proposals, which are uncannily similar to their political rivals, some of which have been implemented or are being implemented, are illustrated in the accompanying table.

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  • sarah

    Point of correction Zanu pf Blueprint was only 25 pages

    • Darlington Musarurwa

      Thanks very much for your contribution. I think you are talking about the soft copy – the abridged version. The hard copy is 78-pages.