Zim’s NDS 1 and the Sino – five year plan: Does the free market economy principle work?

Noble yet detached !Doing the wrong things right! Similar strategies with different economic foundations and results. How so? This might be true of the current economic relationship between Zimbabwe and China vis a vis the National Development Strategy 1 of Zimbabwe and the new 5 year Plan of China. The blueprints share a number of similarities which include a more domestic approach towards development, infrastructural development, digital development and environmental sustainability measures, however, the similarities in blueprint expression do not translate to situational circumstances, reality as the Zimbabwean Shona ghetto lingo would say “Pinda paground” meaning know your environment. Suffice to say, the NDS1 though noble lacks two variables, firstly the capacity to promote and expand  local Zimbabwean economic activities and secondly the requisite knowledge of microeconomic fundamentals, which inform macroeconomic strategy in order to achieve the envisaged ‘2030 Upper Middle Class Status” .In order to achieve this status Zimbabwe needs to disassociate itself from being dependant on Chinese and other foreign capital mobility, and ideals such as free market and focus on supporting their local enterprises.

Looking at how Sino Zim relations began with China supporting Liberation movements ideologicaly financially,and militantly, the  strategy was long term for China, this help to Zimbabwe was never a free meal.In 1980 China could not fully utilise this relationship economically, however the situation changed in 2003 when China grew to have an annual GDP of USD 1000 per capita.China began engaging in an expansionary economic drive ,whereas the ZIDERA Act Of the USA and EU Sanctions made Zimbabwe economically desperate. In came the look East Policy and Chinesse multinationals such as Norinco and Anjin were involved in Zimbabwean mining. In truth China was cleverly using Zimbabwean and African resources to strenghten their own economic interests, building its own riches, and thus building its resource capactiy, reinvigorating what Xi Xinpin calls “The great Chinese Empire”. Moreso there was an influx of Chinese nationals into Zimbabwe who  traded in textiles,plastics and other products in the country and alas the US Dollar that was in Zimbabwe was re-exported back to China.The secret behind this Chinese success was was simple, if you want your national economy to be successful, invest in your local business people and protect them to give them growth. But the question remains,does Zimbabwe gain from this?

Zimbabwes NDS1 intends to move away from stabilisation to economic growth led by market forces in the private sector by means of macro economic stability, sustaining an inclusive and equitable GDP growth, strengthening social infrastructure and ,modernising the economy through ICT Development.

However the consultative process towards formulating the NDS1 had to look into a key factor which is that the Zimbabwean economy is by and largely informal.Through capturing the informal sectors micro economic fundamentals ,understanding issues of liquidity and policy inconsistency towards the informal sector, we can craft a blueprint derived from our environment which would reflect inclusiveness,create good faith and promote innovation in our economy.It is therefore advisable that we revise whom we term as “stakeholders”in economic consultative processes and include local informal enterprises.

Chinas dual approach is focused on domestic growth , which they can achieve as they acquired resources and most importantly they are their own market in terms of numbers as such they can sustain those acquired resources.Zimbabwe is endeavouring to have a free market economy but history reminds us that there is no nation under the sun that achieved economic growth through free market principles, China and the west  included, for at some point in these nations development, there is a point when their governments used the principle of protectionism and protected their local industries and created a foundation for economic expansion. China is doing the same with their Digital technology,aiming for global digital dominance through domestic innovation and capacitisation.But they already have the capacity and resources gained,and Zimbabwe lacks therein, though gold deposits can serve as a natural backbone for a strongly backed currency.This will help in to promoting our own local businesses and then venture into the free market with our own local businesses, most importantly a foundation to offer as competition. That which we term as small and medium enterprises or even informal might be the foundations to our very own entrepreneurs. 

Zimbabwe need not adopt principles not of our own ingenuity, in fact our own macroeconomic fundamentals are meant to be a reflection of microeconomic activities, meaning microeconomic factors should inform and dictate the macro economic structure, the small economic activities are the ones that aggregate to the bigger picture.Just as the Chinese invested in their own people, so should Zimbabwe.

Kudakwashe Mataire is a Masters of International Trade and Diplomacy Student at the University of Zimbabwe.

Follow @ZimbabweVoice on Twitter, or like our Facebook page by clicking here for the latest breaking news in Zimbabwe. To join one of our clean WhatsApp news group, click here. If you find the group full, let us know by clicking here.

Show More
Back to top button

Adblock Detected

Zimbabwe Voice notices you have turned on ad blocker. Kindly turn it off to access our content, as we rely on ads revenue to keep operating.