Labour, Race Relations and Politics in Zimbabwe

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In view of the recent labour furore in Zimbabwe, I came across some interesting information. Consider this.

In 1991, a researcher from the Graduate School of Management at the University of Queensland named M. Shadur published a report on a Zimbabwean parastatal’s performance.

In this narrative, the researcher laments that after independence, the post 1980 period saw “the promotion of inexperienced personnel into important managerial positions,” and “cases where older or more experienced Whites felt passed over for promotion in favour of Blacks.”

Furthermore, “after independence, management’s power over labour relations outcomes was reduced [as] government intervened to attenuate management’s right to hire and fire.”

The government’s intervention in labour relations after 1980 resulted in a frigid labour market characterized by the pro-worker labour laws that existed in Zimbabwe until the July 17 2015 supreme court ruling (which gave employers the right to dismiss employees on 3 month’s notice without benefits) and the consequent Labour Amendment Act of 2015.

Race and Economic Performance

Now, according to the research, the “parastatal was the sole supplier to its private-sector competitors of the basic ingredients for…products,” and the “parastatal operated in deficit, funded by state subsidies.

“The annual trading account deficit increased dramatically after independence, rising from 7 per cent of sales in the year to June 1980 to over 50 per cent of sales in each year from 1983.”

Regrettably, the research did not disclose the name of the parastatal, and therefore I am unable to judge its performance up to 2015.

Nevertheless, the fact that the organization’s deficit rose from “7 per cent of sales in the year to June 1980 to over 50 per cent of sales in each year from 1983,” is telling, as it perhaps illuminates two (mis)steps taken by the government in the 1980s that contribute to Zimbabwe’s current currency quandary.

Firstly, we racialised our economy, and secondly we politicized our economy.

Yes, prior to independence in 1980 opportunities were limited to Black Zimbabweans on the basis that they were Black, and that was the reason for the war.

Yet, after 1980, it seems as though we ignored our own reconciliation and unity messages, and proceeded to limit opportunities to White Zimbabweans on the basis that they were White.

By allowing “the promotion of inexperienced personnel into important managerial positions,” on the basis of race, (without official affirmative action procedures) we further racialised the workplace at the expense of production and performance.

Some may argue that in 1980 Zimbabwe had recently emerged from a protracted civil war, and that there was a sense of urgency on the part of government to encourage black Zimbabweans to participate in the economy. This is noted.

However, the state of the economy today shows us that promotion and indeed policy itself should be merit based and free from racial nuances, corruption and nepotism. Zimbabwe needs a radical paradigm shift if we are to get the country back on its feet.

As it stands, the national fiscus is burdened by several non-performing and bloated parastatals; many of which have joined the retrenchment orgy currently taking place in the country.

Reports indicate that over 20 000 jobs have been shed since July 17 2015.

The job hemorrhage that the country is suffering from can be analogized as the advanced stage of an ailment that began in the 1980s.

Now, I am not trying to argue that deserving black workers should not be promoted to managerial positions.

What I am trying to say is that we need to aspire to become a constitutional meritocracy like Singapore, and abandon our discriminatory approach to economics in both policy and practice.

Ultimately, opportunities should be made available to all citizens irrespective of race.

Politicization of the economy

Now, since the price controls of the 1980s, the government has been directly involved in the country’s economic affairs, at times irrationally.

For example, where production prices increased by 126 per cent from the mid-1980 to 1985, the prices to consumers remained relatively static owing to the government’s socialist inspired price controls.

You see, government’s interference in both labour relations and the marketplace back then was the start of the politicization of the economy that we see today.

I experienced government interference in the market while managing a butchery in 2001.

During that time, the government reintroduced price controls, after spending the 1990s under the dispensation of the Economic Structural Adjustment Programme (ESAP).

In that year (2001), the state’s price and currency controls forced retailers to sell goods at a loss.

As a result, the nation experienced foreign currency shortages and shortages of commodities like meat. Eventually, the black market became the main market until we demonetized the Zimbabwe dollar in 2009.

The hyperinflation of 2008 was the consequent climax of our politicized economics. What we need today is for the government to take a laissez-faire approach to the economy, and perhaps the best way to begin is to repeal the indigenization laws.

Today, the Indigenization Act stands as another reflection of the interference of politics in what is supposed to be the free market. Frankly, it makes no sense that we insist on enforcing Indigenization at a time when the nation is desperate for Foreign Direct Investment (FDI).

We are literally asking people from the East and the West to come and do business here, and then after they arrive, we expect to tell them that they must give up 51% of their investment.

No one will pitch up to that party, because no one wants political interference in their business. The two should remain separate.

This is also true of Land Reform. That programme has been politicized.

If we can revisit the land programme and allow for merit-based land distribution irrespective of race, perhaps we can resuscitate our agriculture. As it stands, we have politicized land tenure at the expense of performance and productivity.

Constitutionalism

Section 56(3) of the Constitution of Zimbabwe reads, “Every Person has the right not to be treated in an unfairly discriminatory manner on such grounds as their nationality, colour, tribe, place of birth.

“Ethnic or social origin, language, class, religious belief, political affiliation, opinion, custom, culture, sex, gender, marital status, age, pregnancy, disability or economic and social status or whether they were born in or out of wedlock.”

I am a born-free (that is, born after 1980) Zimbabwean, who believes in implementing our constitutional values.

The thing is, the world perceives Zimbabwe’s political and racist rhetoric as a smoke screen for our reluctance to effect constitutionalism and good governance in the country.

Ultimately, we need to change our tone and revisit our policy. Period.

Tau Tawengwa

Executive Director

Email

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The Politics of Labour in Zimbabwe

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A Zimbabwean Supreme Court ruling handed down on July 17 2015 has given companies the right to end workers’ contracts at any time, without availing terminal benefits and simply by giving them three months’ notice.

As a result of the judgment there has been a bloodbath of job losses across sectors as employers take advantage of the ruling in order to cut costs and shed unnecessary (dead) weight. Ostensibly, about 9000 workers in Zimbabwe have been laid off since July 17.

Labour activists and organizations have cried foul over the ruling, with some union leaders announcing that they were “shocked” at the ruling.

Semantically speaking, the use of the word “shocked” by the Zimbabwe Congress of Trade Unions (ZCTU) president, George Nkiwane, betrays a sense of self-centeredness on the part of employee bodies.

It seems as though workers feel that they should be protected from redundancy at all costs; even when their employer can no longer afford the wage bill.

This is a misconception that has been held by workers in Zimbabwe since independence in 1980.

The error emanates from the pseudo-socialist ideologies embraced by both trade unions and the government in 1980, and influenced by the cold war politics of the time.

However in 2015 the nation’s circumstances have changed somewhat, and therefore, economic policies should not be based upon the socialist grandstanding of yesteryear, especially not when we live in world that acknowledges that labour market flexibility is a precondition for economic growth.

Plainly put, Zimbabwe cannot continue to isolate itself from the rest of the world as continuing to do so is just impractical.

Notably, however, in his July mid-term fiscal policy review, Finance Minister Patrick Chinamasa acknowledged that Zimbabwe’s high labour costs encumber government’s operations.

In fact, the Zimbabwean government employs around 500 000 civil servants whose wages consume around 80 percent of the national budget. In light of this, the Finance minister has announced that he intends to reduce that wage-bill to below 40 percent of the national budget.

Essentially, this means that the government has acknowledged that labour market flexibility is the first step towards pulling the country out of its current economic quandary.

Even though there have been reports that some politicians are pushing for the country’s labour law regime to be urgently amended in order to shield workers from further job losses, it is my view that the government should let the labour market regulate itself, and ultimately take a largely laissez faire approach towards the economy in order to stimulate growth.

Zimbabwe needs to detach itself from its socialist nostalgia and holistically embrace neoliberalism.

Labour Market Flexibility and Globalization

Flexible Labour Markets have two general characteristics, namely:
● Employers can hire and fire workers straightforwardly and without complex legislative hindrances
● Limited Government intervention in the labour market

Now, since the July 17 ruling, some of my pro-worker colleagues have criticized me for lobbying on behalf of capitalist elites. Nevertheless, it’s important for them to remember that to an employer, labour is an asset akin to a car, a cellphone, or a laptop.

Once the asset becomes unsustainably costly, the pragmatic thing to do is to dispose of it completely and find a cheaper way to remain competitive.

The problem in Zimbabwe is that since independence politicians across the divide have often connived with labour leaders to use labour issues as voter bait.

Several instances have occurred where union leaders have advocated for worker rights and higher wages with the backing of politicians; even at times when it has been detrimental to the wider economy.

This has created a sense of entitlement among workers as a collective, and we are now in a situation where workers have a tendency of overstating their own worth

I mean look, as recently as 2013, Zimbabwean labour union leaders (supported by politicians) were advocating for a monthly minimum wage of around USD540 per month (excluding allowances) for both public servants and private sector workers.

That’s nothing short of costly when compared to an average monthly minimum of around USD300 per month in South Africa- a country with a Gross Domestic Product (GDP) of around USD 350 billion (around 25 times higher than Zimbabwe’s GDP).

Nevertheless, Zimbabwe has reached a crossroads, and it is clear to all that if government does not give businesses the flexibility to lay-off their workers, then businesses will continue to fold and eventually there will be no revenue base for the government to speak of.

I’d like to think that’s the reason behind the Finance minister’s bold declaration that “a flexible labour market is key to our economic recovery.”

After we achieve labour market flexibility, the next step is for the government to introduce incentives for businesses to invest and grow our economy.

Perhaps it would be helpful to take a look at our neighbors’ (Mozambique and Zambia’s) economic blueprints and deduce how they are growing their economies so rapidly.

As it stands, Zambia is growing at 6% per annum, with a GDP of USD27 billion. That’s twice the size of Zimbabwe’s GDP. On the other hand, Mozambique is growing at 7% per annum, with a GDP of 19 billion.

Ultimately, it’s no secret that Zimbabwe has the potential to surpass both Zambia and Mozambique economically. However it’s now up to the government leaders to politic less, and make more practical decisions.

Tau Tawengwa
Executive Director

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