Commenting on abandoning the 1:1 gedye, Eddie Cross believes it was an act of bravery. He goes on to say ED economic management is didn't from Mugabeconomics. Notice how Eddie Cross doesn't use facts &numbers? But superlatives?
Under ED the economy contracted for two years by 8%pa according to WB. The condonation bill, saw unprecedented snbudgetted expenditure under ED. Even the WB noted the ridiculous world beating expenditures.
Under Chinamasa external debt was US$9bn& he had a plan to address it under the LIMA negotiations. Now it's double. Chinamasa reigned in expenditure, cutting GMB subsidies.ED brought Zupco subsidies.Under ED the truth is a punishable offence. They even banned OMIR.Mugabe didn't!
It is true that under ED, some people have become fabulously wealthy. Principally by creating a corruption monopoly whereas Mugabe believed in competitive corruption spread across the breath of supporters. Not just a coterie. ED has good fortune eg a commodity boom.But all wasted
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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.
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.