Economic Reforms Won’t Help Zimbabwe’s Economy
Zimbabwe’s economy continued to experience turmoil, although it managed to weather a devastating period of hyperinflation that peaked in 2008.
One economic area that has remained a thorn in the flesh for ordinary Zimbabweans has been volatile currency. The country has struggled to maintain a stable currency. The Zimbabwean dollar (ZWD) was Zimbabwe’s official currency between 1980 and 2009. Following hyperinflation, in 2009 it was withdrawn and the country moved to a basket of mainly regional but also global currencies.
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In early 2019, the multi-currency regime was replaced by a new currency which was renamed Zimbabwe dollar by the Reserve Bank of Zimbabwe. It is now the only legal form of tendering in the country.
The implication of Zimbabwe’s currency woes was that the exchange rate continued to be largely determined by a parallel market. This has its deep roots in the speculative activities that were rampant during the years of hyperinflation and which have persisted.
The prices of goods therefore continued to be dictated by the parallel market and foreign exchange remained scarce. Speculators continue to engage in activities that reap quick profits, to the detriment of the economy and Zimbabweans. Speculators include influential politicians, large corporations and individuals.
In an effort to stabilize the challenges of Zimbabwe’s currency volatility and alleviate foreign currency shortages, the Reserve Bank of Zimbabwe introduced the foreign currency auction system in June 2020. But it did not. liberalized the foreign currency market, because the bank intervened in the auction. to try to control the exchange rate.
In my opinion, economic reforms alone cannot end the country’s economic crisis. Instead of more economical interventions, Zimbabwean society must self-introspect and help redefine the country’s ethical compass.
I defend this approach from a sociological perspective of ethics. My PhD focused on the working class response of the capital Harare to the hyperinflation and Zimbabwe’s political crisis in the 2000s. One of my main findings was that many ethical principles of workers had been eroded by the ‘hyperinflation, which required a repertoire of survival responses. These sometimes bordered on corruption and speculative activities.
In addition, in my current academic role, I have had to grapple with the concept of ethics, not only from a research point of view, but also from a broader societal point of view, since it acts as the moral compass that guides our behavior. Being an ethics student made me revise my thesis on Zimbabwe’s endless economic crisis, in addition to proposing possible solutions to this perpetual challenge.
Zimbabwe’s ethical regeneration
To keep pace with hyperinflation, many Zimbabweans have had to engage in speculative activity. It was based on hoarding commodities that were scarce in the 2000s. They often resold them at inflated prices on the parallel market. This meant that commodity prices continued to soar as speculators quickly made money.
This behavior of making a quick buck through speculation seems to have taken root in the social fabric of Zimbabwean society. Forex traders continued to operate a parallel currency market, despite hyperinflation under control. In some cases, they act on behalf of businesses and senior politicians.
To eradicate the cancerous scourge of speculative behavior, Zimbabwean society will also need to rely on societal ethical values, as has happened with success in Asian countries such as China, Taiwan and Singapore. These countries have mixed the ethics of Confucianism with business practices.
Confucian ethics dictate hierarchical relationships and identification with social rules. It also emphasizes the “self-control of individuals” in their conduct.
If this value of discipline and good conduct were exercised in Zimbabwe’s business ethics, the country’s economic fortunes could improve.
To initiate the much needed ethical regeneration of Zimbabwean society, political leaders must take the lead in tackling corrupt and speculative activity.
Rhetoric that claims to castigate corruption and put in place economic measures to alleviate Zimbabwe’s monetary problems will not be enough.
A Thomas Sankara type of ethical leadership is what is needed. Sankara, the president of Burkina Faso between 1983 and 1987 imposed a rule according to which the political leaders of the country publicly declare their financial assets and their wealth before taking an oath.
Another good model is the United States’ approach to asset declarations by politicians. It imposes transparency and the capacity of civil society to have these asset declarations audited. Transparency International maintains that such an ethical practice enables citizens to hold politicians to account.
In addition, a continuous financial audit during the exercise of a political mandate should subsequently be mandatory. The Transparency International Georgia chapter has done this, and it helps monitor any unusual discrepancies in politicians’ asset declarations.
What needs to be done
The government of Zimbabwe should take inspiration from Sankara’s Burkina Faso in quickly arresting and prosecuting individuals convicted of corrupt and speculative activities, regardless of their status in society.
South Korea is doing this. Corrupt leaders are arrested, regardless of their political or financial weight.
In addition, the Zimbabwe Anti-Corruption Commission should be endowed with the capacity to perform optimally. It aims to curb and expose corruption. But he is blunted by underfunding.
There is also an urgent need for the Zimbabwean government to enact whistleblower protection legislation. Whistleblowers in the private and public sectors must be protected.
The government should also take steps to improve governance practices in the private sector. The head of Zimbabwe’s Anti-Corruption Commission, Judge Loice Matanda-Moyo, recently claimed that the private sector was the biggest culprit in corrupt activities in the country.
The Zimbabwe Confederation of Industries and the Zimbabwe National Chamber of Commerce, the main representative bodies of business in Zimbabwe, should insist that every business has an ethics or compliance office. Their mandate would be to ensure ethical business conduct.
And it should be mandatory for all senior executives in the company to publish an ethics statement each year, which reflects their organizations’ ethical practices, good or bad.
Finally, creating a company that is ethical in its conduct is a process that takes time. It should include the inculcation of ethical principles in the school system. This would mean that from an early age Zimbabweans learn moral and righteous behavior. A model that deserves to be emulated is dotoku, or moral education, in Japanese primary and secondary education. This was introduced in 2018, and is a separate topic with standardized textbooks.
This approach should also be related to other subjects, such as science and business.
In other words, the word “ethics” should become synonymous with interactions and behavior of Zimbabwean society, not a foreign word.
Tapiwa Chagonda, Associate Professor of Sociology and Director of the Center for Data Ethics at the Institute for Intelligent Systems, University of Johannesburg
This article is republished from The Conversation under a Creative Commons license. Read the original article.