The post covid world presents a serious challenge ahead for emerging markets & ever so for small countries like Zim. The trigger will be the rise in interest rates by the FED.
Another global headwind is China. Bail outs & rise in debt levels.
An interesting debate is on how rises in commodity prices don’t translate to extra income for commodity exporting countries in the LR. Imports increase & other industries suffer.
Small countries unfortunately can’t have diversified economies in a globalising economy. They’re simply not competitive enough.
A small nation with its own currency is a disaster when the number 1 risk in AFRICA is currency risk.
Zimbabwean businesses and GOZ should agree on abolishing the auction. It does devastating harm to the economy.
We cannot be satisfied with a 15m people market. SADC is 350m & Africa 1.4bn people. The auction blinkers industry & inward looking.
The only global industry Zim has produced are its people exports. Everything else is exactly how Ian Smith designed it. To be a closed economy.
Almost every price in Zim is GOZ determined. Only our people exports are free from GOZ clutches .
The major difference between Mao & Deng is that Deng was outward looking while Mao was inward looking.
Deng allowed free markets.
As Zim, the world has forgotten us. It’s up to us to rethink and finally kill Ian Smith mentality
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Frederic Bastiat came up with the idea of the broken window fallacy.
In simple terms, a boy breaks a shop keepers window. The distraught shopkeeper is told not to be sad, for it is good for the economy. The glazier finally has a job.
There is certainly a wave spreading across the region. It happened in the 1990’s. Some took advantage & some chose the moment to become more intransigent.
Confirmation bias means we see what we want to see. In psychology it’s the invisible gorilla experiment.
My suggestion for political parties in Zimbabwe is to engage an impartial commissioned study of what happened in Malawi & Zambia. Of course it’s not to confirm what we already know. But to make us see the gorilla.
As far as the Economies of SADC are concerned. Another moment as it was in 1990 has arrived. Zambia & Malawi missed the opportunity and remained socialist despite multi party democracy. Zim went the opposite direction into hyperinflation. SA used the moment to end Apartheid.
1/5 Pension funds & financial institutions are complicit in a lot of the rot but certainly not the cause of it. 2008 the gdp went as low $5bn. If GDP recovered to $15bn. It means new member contributions are way higher than old contributions. New members have bigger piece of pie
2/5 This is because pension funds are a pyramid scheme. Nothing unique to Zim but worldwide. They rely on new members & new contributions to sustain them. It’s a huge problem in the UK. The US is different because of 401k. The individual has greater say in investing.
3/5 In other words. Most pension funds around the world have not kept pace with inflation. Pension funds invest in property, stocks & bonds. They’re forced to take up bonds which yield negative returns. In Zim it’s prescribed assets. Which never yield positive returns.
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.
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