Broken and vulnerable; that is how our monetary and value systems are. They thwart both risk visibility and systematic management of the same. On top of that, the feeder variables to a sustainable monetary system are non- existent within our opaque economic system; almost everyone (if not everybody) is not honest to the optimum channels for doing our aggregable business. In the end it appears a Zimbabwean currency can’t be supported by what we are doing, and the US$ brand must somehow place-hold for stability (and growth?). We do not have a domestic currency issue. NO! We have a domestic value and monetary system issue, and the adversaries are many; they include you and me! The domestic or internal value system is being failed by weaknesses in most of us!
The integral variables for a successful internal monetary and value system that is characterised by fair pricing and majority open market trades, are not only eminently failing just within central and commercial banking practices. The deficiencies extend to
- taxation,
- revenue channelling linked to the level of productivity and external exchange,
- pricing anomalies that are a result of the lack of a market acceptable value equilibrium arrived at by the availability and visibility of all the preceding,
- plus, the penultimate impossible capital market needed for the ultimate desirable of growth.
Money and its value as a resource cannot currently be allocated optimally. Allocation proportionality is being distorted by the secondary and speculative activities that are blurring economic sector priority and core business supply line hierarchies. The compound demand within this new disruptive sector of major players is putting a premium to foreign currency. On the other hand, the non-productive competition (majority of people) are ‘funnily’ enough bringing a behavioural economics conundrum through excess demand and competition for the US$ 'brand’. This is a very unfortunate and most unnecessary stage added into a vicious cycle of trying to bring custom to the core and primary activities of manipulative players who are also running a secondary disruptive black-market sector. The horror brought by most of the humans inducing excess demand for forex in the system is that most is for non-capital expenditure – little investment or production linked to it! US$ for the digestive system? The Zimbabweans no longer breathe only oxygen, they breathe US$s! I know that will be the respiratory system!
Who else is bringing a problem delinked to production? I do not know what calculations we are doing in coming up with cost of goods sold or traded in Zimbabwe. Pricing in both US$s and ZWL is affected by an import element yes, but there is a significant proportion I believe based on desperation and created urgency for transaction by the Zimbabwean demanding the US$ brand. All this to play a double role of purchase in both the primary and secondary businesses of most major players in basic goods.
What this especially means to some of these players is, (i) more money, and (ii) no threat of entry from any new industry player as it becomes harder to raise ZWL to get US$ cash for food first and US$ to invest in new business capacity beyond food!
Zimbabwe is under a growing multiple monopoly lock!
Zimbabweans are seeking the US$ to make life harder for themselves, for businesses to have no competition, and for businesses to profit more than once!
But there is a big reverse gain in a future wherein both the ZWL and the economy were to appreciate. Guess who will be holding most of the ZWL after people chased and paid high values for the US$ brand of money? The person who sold you the US$ so that you bring custom to their primary business!
The biggest loss in this, however, has been in the more current resultant failure of maintaining and extending a localised element of economic activity based on the ZWL.
That foundation for that thriving ZWL economy is sought by seeing through the following question:
what segregated internal economic
activities can we transact at a reasonable and observable equilibrium linked to
an introductory currency value, yet decoupled naturally
or by clear calculation from a foreign exchange value?
Impossible for some? From it, we need to build our calculations/modelling on our comparative advantage or disadvantage factors; these should make the difference between our indexed currency value and pricing of competing basket imports (without factoring in any tariffs). We could get both the more intelligence based market value exchange rate and the right pricing channels for goods in Zimbabwe without the mark-up of perpetually pessimistic perceptions. At least a starting point for an intelligence based valuing system.
Our demons are however many.
Quite a chunk of functional industry that even produces mouth watering export receipts have no fully traceable activity and hence limited impact on internal business activities (less their imports).
So for livelihoods and profiteering, people and lives high and low have run off to the black economy where the ins and outs are not clear, not rightly recycled nor shared in the aggregable economy. Here contribution costs to the economy are not captured through taxation and any potential economic structural support that would result from investing in the essentialities of central government. The informal sector’s level of success only becomes clear with its product in the form of an unrelenting demand factor its earners put on the US$.
However, the failure to
graduate to formality and contribution is not accepted widely (and maybe not wisely)
as due to the autonomous decision by players to divest from the functionality institutions of a legal economy.
It is the lack of knowledge and linkage in who is doing what and when that is killing the ZWL and the economy. It is the lack of linking all production, however small, clearly and for each other that is dropping the ZWL. It is the human factor of putting a premium on prices due to the prevalence of fear and/or pessimism. They know there is a majority leaving their homes mentally geared up for the worst transaction. ‘Hazvishamise kusvikako tichizotopper up pamari iyoyi’ mentality. ‘Manje manje kuma 1:120’ mentality. Then a capitalist is expected not to capitalise when you have a mind expecting this?
I thought recently of a group of man and women of brick makers, cement makers, water carriers, roofers and stone crushers who all decided to be unrelated and stood in their places with their goods on a plain. All tried to gain from each other without meeting as much their end of the bargain. The heat came and they got sun burnt as they negotiated hard. The rain came and all got cold whilst they hard bargained for a trade. Days went by and as the elements were taking their toll, they all agreed to part with a bit of their lot to give to a foreign tent maker so that they could all be shielded inside to continue negotiating their interlinked futures. It was sad; only the tent maker could get housing material in exchange for her perceived to be sheltering piece of green cloth! All these days on the exposed plain; they could build a house of stones for the comfort of all of them; muZimba remabwe.
