Open Economy: National Budget lacks progressivism

29 Nov, 2015 - 00:11 0 Views
Open Economy: National Budget lacks progressivism Finance Minister Mr Patrick Chinamasa

The Sunday Mail

At a post-Budget breakfast on Friday, Finance Minister Patrick Chinamasa again pleaded with business to not involve politics in economic issues.

In saying that, the Finance Minister regularly displays the most transparent signs of a country lacking progressivism; a country that instead sees need to constantly resort to distinguish economics from politics.
Such a notion is especially suspicious coming from our fiscal chancellor, as his position itself is the fundamental political manifestation for economic representation.
Moreover, granting five Presidential exceptions, under Chapter 5 Section 104(3) of Zimbabwe’s Constitution, a Finance Minister is appointed on precondition of having secured a seat in Parliament seat.
Therefore, MP Cde Patrick Chinamasa is first and foremost an elected politician!
That is not to doubt Minister Chinamasa’s sincerity. He is as honourable as a gentleman’s handshake.
Yet, that good quality becomes a source a worry when the Finance Minister is seemingly forced to distance politics from his mandate.
It suggests a resignation to the fact that Zimbabwe’s economic aspirations have superseded the expectations it has in its own politics. It qualifies that the involvement of political issues only serves to hinder traction towards economic desirables.
This is contrary to progressivism!
Progressivism is the understanding that desirable economic outcomes are influenced by political interactions which advance three socio-political virtues: co-ordinating functional and equitable market structures, promoting human potential, and intentionally sanctifying ethical uprightness in economic systems.
Minister Chinamasa’s national budget actually speaks on all three virtues, but addresses all of them in policy and tone that reveal a certain resignation.
In terms of co-ordinating functional and equitable market structures, like many other policy announcements of recent years, the National Budget once again emphasised the need for public entity reforms!
It belaboured the slow progress made over the years in pushing the Public Entities Reform Agenda. I would argue that the onus on public entity reform is initially on our manner of political interaction.
Much of the decay we have seen in public entities and State-owned enterprises is traceable to political interactions of patronage, rent-seeking, tolerance of mismanagement and extraction.
Thus, while Minister Chinamasa suggests audits and corporate governance reforms, effective remedy to chronic under-performance and abuse of public entities can only come through direct confrontation with our political culture!
Indeed our failure to co-ordinate functional and equitable market structures is not because of a lack of audits, operational controls or the absence of corporate governance.
The Auditor-General has for years revealed where the leakages in State offices occur, and abuse of corporate governance has been exposed frequently.
Institutions like the Zimbabwe Anti-Corruption Commission have already been formed, and it is pleasing to note that the Office of the President has decided to directly oversee this arm.
Our biggest problem is simply poor political will and political interactions that are evidently placed above suggested frameworks in the Public Entity Reform Agenda.
Such frameworks are proving futile in the face of political forces that continuously override these efforts.
As State enterprises are the industrial centrepiece and drivers of the macro-economy, market structures in Zimbabwe become inequitable in that private participants adopt burdensome costs which make their enterprises uncompetitive and less profitable.
This is more transparently versed in the National Budget under sections on the cost of doing business, ease of doing business and encouraging private sector investment.
In terms of human potential, the National Budget can be perceived as a pretty dark day in our economic history with much more significant implications than subtle appearance.
It revealed an uninspiring economic relationship between society and its public institutions, as well as a developing flawed economic system.
The aforementioned political interactions have made it norm to override legislative frameworks, hence for society we have enabled deviant conduct to be standard.
As fiscal policy is designed to extract value out of the choices between predominant or desirable economic impulses, it is disturbing that we now have fiscal policy constructed on the strength of deviant behaviour.
This is a grim perspective to have of human potential as a country!
In social theory, there is a principle of reflexivity. Reflexivity is an act of self-reference where an action affects the very same entity instigating that action.
While fines will generate income for Government, betting on citizen’s deviant behaviour for fiscal gain has a far greater economic harm.
It is fiscal policy which inadvertently confirms that in our economy, accepting the risk proposition of deviant impulses has become almost rational in certain economic circumstances.
Contrary to diplomatic reasons suggested by Minister Chinamasa, traffic fines have become a lucrative revenue stream.
The strategy behind hiked traffic fines suggests that we have created an economic system where deviant behaviour offers greater return than the risk of misconduct by citizens.
One can offer rebuttal to this proposition and argue that society must take accountability for its own actions.
However, competent governance is aware that economic impulse is influenced by comparative opportunities presented to others — thus if political interactions remain more economic in deviance, society will act likewise as a reasonable frame of reference.
In effect, I would argue that our political interactions have created an economic system leveraged on deviance.
Evidently, enforced tax structures are increasingly corroborating to this notion. This notion has far-reaching relevance throughout the National Budget under sections such as compliance within financial institutions, environmental standards, and contractual enforcement.
Conclusively, we cannot separate our politics from our economy. Either our political interactions enhance our economic efforts or they become burdensome obstacles.
It is clear to see that we lack progressivism!

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