If what Prof Mthuli says sounds familiar it’s because we have heard it before.
“the austerity measures being implemented on the fiscal &structural sides of the economy, inflation has been targeted to decline to 50-70% by end of 2006; &to single digit by March 2007.” Dr Gono
I’m a little obsessed with Dr Gono. He was more original rather than the current crop. We should spend time going through Dr Gono’s statements. They’re pure gems & help us understand fragile state economic propaganda.
For good measure here are a few quotes from Dr Gono:
“The following deliberate efforts currently underway to enhance productivity in agriculture expected to play a supportive role in increasing food production, boosting real GDP growth & hastening the disinflation process finalization &implementation of the 99-year lease framework;
Comprehensive redress of any infringements on investments protected under Bilateral Investment Protection Agreements (BIPAs); (c) irrigation rehabilitation, which seeks to dilute the country’s dependence on dry-land agricultural production
The painful self-imposed road of macroeconomic adjustment the country and its people is traversing will bear fruit”
• • •
Missing some Tweet in this thread? You can try to
force a refresh
1/10
This makes for the saddest reading this year. For a number of reasons which I will articulate;
(i) Politicization & weaponizing of statistics
(ii) Technocrats reduced to water carriers.
2/10
The herald editorial makes all sorts of claims, as does many analysts given the reduction in inflation from 837.5% to 194.7% in seven months.
The editorial is dangerous. As it removes economic statistics from the realm of economics to the realm of politics.
3/10
Having failed to economically change the structural issues in the economy it seems the new strategy is to fix the output numbers. So politicians can claim success of “single digit” inflation.
The veneer becomes the perfect. This is dangerous in Economics.
On this thread I will restrict the contents to understanding the economics of trade. Which is vastly different from the politics & law of trade.
What politicians think trade is has little relation with what trade is actually about.
2/23
For example politicians the world over will speak of trade deficit & surplus as bad or good thing. Directing policy for this intended good & away from the bad. Yet the economic truth is a deficit or surplus is a meaningless description of movement or goods & services
3/23
The consumers & economies of the deficits OR surplus are better off with the trade than without.
Without the trade, consumers won’t receive cheaper prices & capital won’t receive higher interest. But politics is the art of weaponizing ideas to get votes.
There is nothing new about the FX auction system. The murmurs of discontent are only a symptom of what is wrong with the economic governance. That an importer is subsidized & exporter punished is at the crux of the economic thinking in government. Dishing out expensive favours.
That Mthuli lied in broad daylight about the FX fixed rate reveals his lack of empathy with tobacco producers many of whom face USD costs entirely.
Mangudya’s remarks are very welcome. They lay to bare the stupidity of the policy that kills the golden goose.
If importers were to pay 130 for FX, they would need to work extra hard to sell. Pricing is merely a signal of consumer demand. Interfering with the price mechanism means 3 things;
i. Misallocation of resources from investment to consumption
ii. Massive speculation binge
1/7 ED Mnangagwa’s vision is to be a middle income country by 2030.
What does that actually mean? How does that vision translate to strategic intent and objectives.
GOZ has an empty promise therefore the empty rhetoric & consequentially violation of economic principles.
2/7 Peter Drucker notes leaders are not in control of the universe. Hesiod the Greek poet in 7BC discovered scarcity.
If a leader can’t control & he has very little, in Economics all his decisions have a trade off. An opportunity lost/cost. By hunting you forgo farming harvest.
3/7
More guns less bread. So the price of a gun is the many loaves of bread that could have fed the nation.
You can’t have it both ways. When you consume you don’t invest. When you invest, you forgo consumption.