OPEN ECONOMY: Economic nationalism is legitimate!

06 Mar, 2016 - 00:03 0 Views
OPEN ECONOMY: Economic nationalism is legitimate!

The Sunday Mail

A regular theme of this column has been the importance of public discourse; how a nation conducts its discussions, the context and parameters around which conversations are confined, and, more importantly, the ideologies and philosophies that inform opinions exchanged within that discourse.

It remains my proposition that it will only be when Zimbabwe improves its public discourse that we will start to see noteworthy traction in our economic circumstance.

We have carried on for far too long with a contestation between the guidance of nationalist self-awareness and foreign-influenced conventionalism.

Foreign-influenced conventionalism searches to win its appeal by either one of two notions: its familiarity with what is imagined to have been a more rewarding past, or an easy alternative path compared to the present challenges of modern Zimbabwe.

In doing so, foreign-influenced conventionalism has tried to diminish and, in some cases, totally deny the legitimacy of nationalist self-awareness as a practical guidance of economic management.

It is not my intention to be divisive by raising social stratification, however, it must be said that quite often it is our intellectual and educated base which lends credence to foreign-influenced conventionalism when contributing to our public discourse.

This is the greatest compromise within our educational system in Zimbabwe!

It seems to groom adoptive intelligence without instilling an awareness of beneficiary of that intelligence.

Furthermore, our empowerment endeavours and recent foreign affairs have also created opportunity for external elements to portray inquisitions of beneficiary as being antagonist to foreign interests — which is really not the case.

For instance, over the past few weeks, a few articles in the private media have suggested an ambiguity in the intended beneficiary of our economic aptitude.

An article titled “Zhuwao on Foreign Direct Investment: Tyranny of the Misinformed” expressed intellectual fury, stating that policy discord is now normalised in our once great nation.

I’d encourage the writers to interrogate the context in which they imply a “once great nation”, especially when this assumed era of affluence occurred within a structure where the majority was marginalised from income gains and high value economic activity.

Notwithstanding, while the premise of the article was to highlight the need for more FDI in Zimbabwe, the article reflected a conventional adherence to placing salvation on foreign economic intervention whilst diminishing our own responsibility.

The writers did well to highlight the meagre domestic savings in the economy.

However, they offered very little suggestion on how domestic players culpable in shrinking those savings can act to reverse that trend.

Instead, the writers chose to dismissively label local players as merely “subsistence and speculative” investors.

The main reason why we have low FDI and savings in Zimbabwe, and why neither is likely to be sustainable in this economy is because of our incompetent socio-economic interactions; both in the public and private sectors.

For instance, sensible investors will not put money into a country where business models do not align executives’ remunerations to productivity.

Sensible investors will not put their money in an industrial base that pushes government for more protectionist policies whilst it retains uncompetitive industrial processes and archaic equipment.

There is very little investment allure when unions and interest groups such as Buy Zimbabwe chastise consumer preferences, yet it does not consider whether local retailers are pursuing effective means of winning customer equity through marketing, pricing and customer relations.

Investment will not see profits in an economy full of market distortions attributable to a culture of profiteering and arbitrage. These are not matters to be solved by FDI.

They are matters that repel FDI.

Our indigenous economic agents are offering poor investment propositions. It is this internal locus of perspective which many of our intellectuals and academic elites of conventionalist mindsets fail to retain.

This is exactly why many conventionalists will call for greater FDI, yet very few of them can point out where that FDI stands to make competitive returns!

Conventionalism has taken away introspective assessment of our indigenous economic agents.

Our own socio-economic interactions are the most significant deterrent to FDI and savings accumulation.

There is a popular conventional argument that our economic circumstance and liquidity crunch warrant for Zimbabwe to loosen foreign ownership restrictions.

That argument is ill-conceived!

It absolves the aforementioned internal socio-economic deficiencies.

Restricted foreign economic participation is not the issue!

Foreign-influenced conventionalism has sought to deride the Indigenisation and Economic Empowerment Act as legislation outside practical economic theory.

It is difficult to accept this notion as sincere when there are more than 50 other cases of countries that pursue similar foreign ownership restrictions.

In some cases such as the Abu Dabhi Department of Economic Development, versing foreign ownership limits is strikingly similar to ours: “limited liability companies must by law be at least 51 percent owned by a UAE national or locally-owned company”.

Whilst conventionalists argue that the IEE Act is over-extended, the Federal Council of the UAE went as far as to curtail “side-agreements” where local agents acted as fronts for foreign parties by passing a Federal Law called the Anti-Concealment (Fronting) Law in 2004.

Zimbabwe has been lenient on fronting. We have also been extremely accommodative by extending business-friendly incentivises for legislative compliance through rebates and credits.

Unlike the UAE and many other countries, it is possible in Zimbabwe to have a 100 percent foreign-owned entity as long as it abides to socio-economic desirables outlined within framework and regulations.

The suggestion to reserve certain sectors in the economy is common practice worldwide.

For instance, the Foreign Acquisitions and Take-Overs Legislation Amendment Bill in Australia enforces reservations in land and residential real estate. Thus, the imposition of foreign ownership restrictions by Zimbabwe merely abides to standard practices of national interest.

I suspect that an opposition to nationalist self-awareness has also created a space for professional complacency; much so our economic analyses have regressed to the point of superficial conformity to foreign conventional schools of thought.

For instance, according to an article titled “Joint Venture Act barrier to investment”, free market notions, for which I am concededly an advocate, are unfittingly proffered for public-private contracting.

It is economically illiterate to suggest little government involvement and oversight in joint ventures!

The state is the natural counterpart.

One can only suspect the influence of a dismissive sentiment to anything economically nationalist.

Economist Mr John Robertson associates State oversight with a philosophy obsessed with control and intrusion to private enterprise.

Mr Robertson’s motive to ridicule improved Government oversight in joint ventures where corruption has been a problem is testament to nationalist spite.

It does us no good when our economic minds cannot focus on impartial practicalities.

As Zimbabweans, we are letting each other down through blind conformity to foreign-influenced conventionalism.

Hypocrisy falls on private media because without foreign ownership restrictions in that particular sector, the same publications dismissive of economic nationalism would be run out of business by foreign media houses were it not for those laws.

The success of the few majority indigenous shareholders in that sector is testament to what can happen for more of us under foreign ownership restrictions.

Self-awareness is the capacity for introspection and the ability to recognise oneself as an individual separate from the environment and other individuals.

It is nationalist self-awareness that brought about a need for economic empowerment.

As Zimbabwe, we may have labelled it in our own phrase, but all other self-aware nations recognise themselves as individuals separate from others.

This consciousness guides their economic management.

We are weighed down by an intellectual conventionalism which resists the guidance of national self-awareness.

Our economic circumstance would be greatly improved if we carried out our public discourse from an internal locus of consciousness.

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