By Dr Tafataona Mahoso

IN previous instalments I pointed out that for the longest time since 2008, readers of newspapers and listeners to radio and TV programmes on business and economics were told it was important to avoid the creation and defence of our own money in order to avoid the return of crisis conditions similar to those of 2007-2008.
In other words, only the return of the Zimbabwe dollar or its national equivalent would bring back crisis conditions similar to those of 2008.
Come June-July 2016, those crisis conditions have been precipitated or created but there is no Zimbabwe dollar or its replacement.
Why are economists, reporters and their editors not explaining or questioning: How come?
That would be a simple and proper question to ask the financial elites at Treasury, at the Reserve Bank of Zimbabwe, at the Confederation of Zimbabwe Industries (CZI), at the National Chamber of Commerce and at the Zimbabwe Economic Society.
Another simple question journalists must always ask the same financial and economic elites is: What is the purpose of economic organisation for any nation?
This is a critical question to ask all the time because every economic or financial policy formulation, promotion and implementation is based on certain assumptions being made about the sole or main purpose of national economic organisation.
It is clear national economic policies pursued in Zimbabwe, especially following the 2013 elections imply that the main purpose of national economic organisation is to shrink the size of the national economy at a time when the overall global economy has also been shrinking as a result of declining commodity prices.
Locally, we have noticed strange celebrations of the following policy measures which all imply shrinkage:
l Policy recommendations to cut the size of the civil service which are not backed by scientific research demonstrating that indeed there is less work for civil servants to do for citizens.
l Policy recommendations to cut benefits for civil servants and reduce the ‘salary bill’ with very little reflection, let alone research, on the impact the cuts will immediately have on retail, manufacturing, agriculture, education and so on.
l Policy decisions to mop-up any and all funds accessible to the state in order to pay foreign debts at any cost.
This is the basis of criticism of the Ministry of Finance by the Speaker of Parliament Advocate Jacob Mudenda recently.
The Speaker thought that it did not make sense for the State to plead bankruptcy after shipping out to the International Monetary Fund almost US$2 billion to pay interest on debt arrears.
The purpose of national economic organisation cannot be simply to get rid of debts while the entire nation just sits immobilised by lack of liquidity.
He felt Treasury should have formulated a debt-payment strategy which started with creating local national value on which the Government and the people had full control, such as buying gold, diamonds and platinum to create a triad of precious mineral reserves which we could sell and use the profits to pay debt slowly.
A policy to create a foundation based on gold, diamond and platinum reserves would generate local economic activity since these minerals exist here and local companies would supply the required gold, diamonds and platinum.
In addition, such a triadic reserve built up to US$2 billion for a start would help to build confidence in the national economy and could be the initial foundation for a national currency.
l A fanatic policy to bring inflation to zero at any price, as an over-reaction to the hyperinflation of 1997-2008.
There is no question inflation is bad for everyone.
But the deflationary conditions created through a reactive dollarisation policy have progressed from stabilisation to deflation and now to destabilisation as economic depression, unemployment and lack of liquidity trigger social unrest. Surely, it cannot be the sole purpose of our entire economic system to reduce inflation to zero and mop-up all existing funds to pay interest on external debts while leaving the entire population, industry and the public sector stranded and doing nothing.
True, the ultimate objective has been stated as to attract direct foreign investment (FDI) and to open up new lines of credit.
However, these potential benefits remain merely potential and they are entirely beyond our own policy control.
They depend on the goodwill and confidence of external players.
What have we set up for ourselves which depends mostly on our own resources, our own confidence, our own mobilisation as a nation and a people?
In other words there is an implied theory behind many of the policy decisions being pursued here in the last five or so years which assumes that we as a nation and a people are powerless and should depend on pleasing external forces who will eventually have confidence in us and goodwill toward our needs despite the same forces having imposed sanctions on us.
Otherwise we just cut and shrink everything and wait.
This sounds like an accountant’s approach and not an economist’s approach. Accountants always think they have accomplished a lot if expenditure is reduced or stopped altogether; and if all debts have been paid.
So we just sit and celebrate that we are spending less and less on ourselves and we have no debts.
But is that what an economic system (including 14 million Zimbabweans), is organised to do?
Is that the sole reason for its existence?
To do nothing because we do not owe anyone anything and we have cut everything?
Is that the main purpose of national economic organisation?
Yet in reality, the debt repayments being made are causing the debt to grow bigger and faster because we are not producing value from which to pay debts.
For the tiny class of rich financial speculators on whose behalf the ‘economists’ speak, the fundamental purpose of economic organisation is to cut government spending (reduce the deficit) and to reduce inflation because that is what makes financial assets lucrative.
But for the majority of the people the fundamental purpose of economic organisation is to create full employment and meet the basic needs of the majority.
The question for Zimbabwe is: Which society do the experts represent and when will they take responsibility for their failed prescriptions?
These are some of the questions economic reporters are expected to ask and research on.