1/24
CORRUPTION IN ZIMBABWE
Ian Senior, Corruption,the World’s Big C: Cases, Causes, Consequences, Cures (2006), asserts no significant correlations between high degrees of personal honesty and religious practice and less bribe-taking around the world.
CORRUPTION IN ZIMBABWE
Ian Senior, Corruption,the World’s Big C: Cases, Causes, Consequences, Cures (2006), asserts no significant correlations between high degrees of personal honesty and religious practice and less bribe-taking around the world.
2/24
What do we learn from this significant conclusion on corruption? It means even the most ethical, religious & morally astute societies can be infested with the corruption scourge. Because corrupt states make it impossible to play or move without paying.
What do we learn from this significant conclusion on corruption? It means even the most ethical, religious & morally astute societies can be infested with the corruption scourge. Because corrupt states make it impossible to play or move without paying.
3/24
Under Roman statutes corruption was defined as
“whenever money is taken and a publicly-conferred duty is violated.”
An example may suffice to illustrate.
Why do governments erect toll gates? Let’s think of this in simple terms
Under Roman statutes corruption was defined as
“whenever money is taken and a publicly-conferred duty is violated.”
An example may suffice to illustrate.
Why do governments erect toll gates? Let’s think of this in simple terms
4/24
Citizens already pay taxes. In Zim. 99% of vehicles are imported. Taxes for most vehicles are 100%. Then there is vehicle licenses/taxes for the life of the car. For the car to move one pays 100% in fuel taxes. One of the highest in the world.
So why pay for toll gates?
Citizens already pay taxes. In Zim. 99% of vehicles are imported. Taxes for most vehicles are 100%. Then there is vehicle licenses/taxes for the life of the car. For the car to move one pays 100% in fuel taxes. One of the highest in the world.
So why pay for toll gates?
5/24
The real reason for toll gates was in federal governments were taxes are collected at a local level. Therefore when a vehicle from out of state entered a new state it had to pay for access.
The real reason for toll gates was in federal governments were taxes are collected at a local level. Therefore when a vehicle from out of state entered a new state it had to pay for access.
6/24
The nature of our Zimbabwean centralized government is that all that was required was to increase license fees. Or make better use of all the vehicle related taxes. And not build toll gates. After all. Toll gate money goes back into a centralized pot.
The nature of our Zimbabwean centralized government is that all that was required was to increase license fees. Or make better use of all the vehicle related taxes. And not build toll gates. After all. Toll gate money goes back into a centralized pot.
7/24
I will use another example.
Command Agriculture budget to date is anyway between US$3.5bn to US$7bn. I will use the minimum total cash that has been outlayed. At most 25% of recipients have payed back. How on earth they can get away with it is another matter.
I will use another example.
Command Agriculture budget to date is anyway between US$3.5bn to US$7bn. I will use the minimum total cash that has been outlayed. At most 25% of recipients have payed back. How on earth they can get away with it is another matter.
8/24
During the Dollar era. Zim’s total private sector credit was about US$3.8bn. This involved more than 200 lending institutions & lending to all from Delta to informal traders. The economy ticked on this credit.
During the Dollar era. Zim’s total private sector credit was about US$3.8bn. This involved more than 200 lending institutions & lending to all from Delta to informal traders. The economy ticked on this credit.
9/24
Command Agriculture replaced the total private sector credit. Through a simple directive from central government. No tender. No competitive bidding or due diligence of any kind. By a stroke of pen, money was taken away from private sector credit
Command Agriculture replaced the total private sector credit. Through a simple directive from central government. No tender. No competitive bidding or due diligence of any kind. By a stroke of pen, money was taken away from private sector credit
10/24
What was the wisdom of diverting money from private credit to one man? Lending is a highly complex enterprise involving lots of decisions.
Could Sakunda, with Zero lending capability replace as one entity the entire financial sector of Zim? Or even compete?
What was the wisdom of diverting money from private credit to one man? Lending is a highly complex enterprise involving lots of decisions.
Could Sakunda, with Zero lending capability replace as one entity the entire financial sector of Zim? Or even compete?
11/24
The diversion of capital from private sector to command agriculture was world beating. The world bank highlighted this fact, as illustrated in the picture. Agriculture contributes 9.3% of GDP yet took most of GOZ resources & support.
The diversion of capital from private sector to command agriculture was world beating. The world bank highlighted this fact, as illustrated in the picture. Agriculture contributes 9.3% of GDP yet took most of GOZ resources & support.
12/24
Sakunda went further to take over the full value chain in Agriculture. A value chain existed before Sakunda. But Sakunda replaced it with it’s own preferred firms & associates. Through Command, Sakunda operations became bigger than the entire turnover of ZSE firms combined!
Sakunda went further to take over the full value chain in Agriculture. A value chain existed before Sakunda. But Sakunda replaced it with it’s own preferred firms & associates. Through Command, Sakunda operations became bigger than the entire turnover of ZSE firms combined!
13/24
During this period of the Sakunda madness, GOZ borrowings increased by US$10bn. While private sector credit shrunk to US$400m. Private sector credit has recovered to US$800m. Minuscule compared to it’s highs. Tax payer debt increased. Yet economy worsened.
During this period of the Sakunda madness, GOZ borrowings increased by US$10bn. While private sector credit shrunk to US$400m. Private sector credit has recovered to US$800m. Minuscule compared to it’s highs. Tax payer debt increased. Yet economy worsened.
14/24
Zimbabwe did not need toll gates nor Command Agriculture. Yet here we are. The tax payer has recently been slapped with a 2% transaction tax to pay for the sins of the past. The ZWL collapsed because of the profligacy. These are consequences of corruption. Depositors lost.
Zimbabwe did not need toll gates nor Command Agriculture. Yet here we are. The tax payer has recently been slapped with a 2% transaction tax to pay for the sins of the past. The ZWL collapsed because of the profligacy. These are consequences of corruption. Depositors lost.
15/24
What is the empirical evidence elsewhere?
According to Transparent International 42% of people interviewed confirmed they had paid a political bribe in Africa. This compares to 1% and 2% in Canada and America. In Cameroon its as high as 79%. Asia its 22%.
What is the empirical evidence elsewhere?
According to Transparent International 42% of people interviewed confirmed they had paid a political bribe in Africa. This compares to 1% and 2% in Canada and America. In Cameroon its as high as 79%. Asia its 22%.
16/24
In Europe corruption is high in former soviet states in Eastern Europe & highest in Russia & its satellites. The same prevails in Latin America & Asia. Where ever Communism or socialism is high, corruption resides. Why?
In Europe corruption is high in former soviet states in Eastern Europe & highest in Russia & its satellites. The same prevails in Latin America & Asia. Where ever Communism or socialism is high, corruption resides. Why?
17/24
As illustrated in my examples in Zimbabwe corruption is a function of the power & control of the state in the market place. Where GOZ dictates & intervenes in the market. Directing capital away from private sector to one company. & protecting those who failed to pay back
As illustrated in my examples in Zimbabwe corruption is a function of the power & control of the state in the market place. Where GOZ dictates & intervenes in the market. Directing capital away from private sector to one company. & protecting those who failed to pay back
18/24
Zim’s GDP per capita with a population of 17m is less than US$1000. That is less than it’s per capita in 1980.
Corruption diverts national resources from best use to most politically favored uses. Despite the consequences. US$100m of gold is smuggled every month.
Zim’s GDP per capita with a population of 17m is less than US$1000. That is less than it’s per capita in 1980.
Corruption diverts national resources from best use to most politically favored uses. Despite the consequences. US$100m of gold is smuggled every month.
19/24
This money ends up in Singapore, Dubai etc developing those countries and not Zimbabwe. When policy was right. Zim got 33tonnes of gold in 2018. Wrong policy & almost half the gold disappears. Rolls Royce & the British economy is the major beneficiary.
This money ends up in Singapore, Dubai etc developing those countries and not Zimbabwe. When policy was right. Zim got 33tonnes of gold in 2018. Wrong policy & almost half the gold disappears. Rolls Royce & the British economy is the major beneficiary.
20/24
The civil servant now earns US$150. They used to earn US$500, five years ago. The Fx Auction takes by decree 40% of exporters money & gives it to a chosen few at a discount of 70%. Why would any sane person believe this policy works. Yet civil servants languish in poverty?
The civil servant now earns US$150. They used to earn US$500, five years ago. The Fx Auction takes by decree 40% of exporters money & gives it to a chosen few at a discount of 70%. Why would any sane person believe this policy works. Yet civil servants languish in poverty?
21/24
Back to the theory. Ian Senior in explaining corruption causes finds
“ A far stronger explanation can be found in the relationship between the level of corruption in society and the degree of government intervention in the marketplace”
Back to the theory. Ian Senior in explaining corruption causes finds
“ A far stronger explanation can be found in the relationship between the level of corruption in society and the degree of government intervention in the marketplace”
22/24
Corruption is high when politicians can dish out favours. Remember how Telecel & Netone despite failure to meet GOZ terms got licenses? Econet had to fight in the courts to get a license.What happens today, when one goes to the judiciary?
Corruption is high when politicians can dish out favours. Remember how Telecel & Netone despite failure to meet GOZ terms got licenses? Econet had to fight in the courts to get a license.What happens today, when one goes to the judiciary?
23/24
R.M Ebeling makes the case for markets in solving corruption. “Under these circumstances,government officials have few regulatory or redistributive responsibilities, and therefore they have few special favors, privileges, benefits, or dispensations to “sell”.
R.M Ebeling makes the case for markets in solving corruption. “Under these circumstances,government officials have few regulatory or redistributive responsibilities, and therefore they have few special favors, privileges, benefits, or dispensations to “sell”.
24/24
In Roman times corruption is extended to mean “concussio”or extortion. Meaning a powerful person builds a toll gate. Any business or person to function must pay for access. It’s easier to just pay.That’s how society becomes complicit.
That’s why Zim is full of toll gates.
In Roman times corruption is extended to mean “concussio”or extortion. Meaning a powerful person builds a toll gate. Any business or person to function must pay for access. It’s easier to just pay.That’s how society becomes complicit.
That’s why Zim is full of toll gates.
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