Sunday, January 16

Economic reforms will not fix Zimbabwe’s economy


Zimbabwe’s economy has continued to experience turmoil, despite having 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 Zimbabwe dollar (ZWD) was the official currency of Zimbabwe between 1980 and 2009. As a result of hyperinflation, in 2009, it was withdrawn and the country became a basket of mostly regional currencies, but also some global ones.

Moneyweb Insider Gold

Join heated discussions with the Moneyweb community and get full access to our market indicators and data tools while supporting quality journalism.

R63/month or R630/year

SUBSCRIBE NOW

You can cancel anytime.

In early 2019, the multi-currency regime was replaced by a new currency which was renamed the Zimbabwe dollar by the Reserve Bank of Zimbabwe. Now is the only legal tender form in the country.

The implication of Zimbabwe’s monetary problems has been that the exchange rate has remained largely determined by a parallel market. This is deeply rooted in speculative activities that were prevalent during the hyperinflation years and have persisted.

The price of the goods has, therefore, continued to be dictated by the parallel market and foreign currency has remained scarce. Speculators continue to engage in activities that generate quick profits, at the expense of the economy and Zimbabweans. Speculators include influential political figures, big business, and ordinary people.

In an attempt to stabilize the challenges of Zimbabwe’s currency volatility and alleviate the foreign currency shortage, the Reserve Bank of Zimbabwe introduced the foreign exchange auction system in June 2020. But this did not liberalize the foreign exchange market. , since the bank has interfered in the auction. in an attempt to control the exchange rate.

In my opinion, economic reforms alone cannot end the country’s economic crisis. Rather than more economic interventions, Zimbabwean society needs to self-introspect and help reset the country’s ethical compass.

I am defending this approach from a sociological perspective of ethics. Me doctorate focused on the response of the working class in the capital, Harare, to the hyperinflation and political crisis of Zimbabwe in the 2000s. One of my key findings was that many of the ethical principles of the workers had been eroded by hyperinflation, which required a repertoire of survival responses. These sometimes bordered on corruption and speculative activities.

Furthermore, in my current academic role I have had to grapple with the concept of ethics, not only from a research perspective, but also from a broader social perspective, as it acts as the moral compass that guides our behavior. Being an ethics student has made me revisit my thesis on Zimbabwe’s never-ending economic crisis, as well as offering possible solutions to this perpetual challenge.

Zimbabwe Ethical Regeneration

To keep up with hyperinflation, many Zimbabweans had to engage in speculative activities. This was based on stockpiling commodities that were in short supply in the 2000s. They often resell them at inflated prices in the parallel market. This meant that prices for goods continued to spiral, with speculators making a Easy money.

This behavior of making quick money through speculation seems to have taken root in the social fabric of Zimbabwean society. Currency traders have continued to operate a parallel currency market, despite the domestication of hyperinflation. In some cases, they act on behalf of companies and top politicians.

To eradicate the cancerous scourge of speculative behavior, Zimbabwean society will also have to rely on the ethical values ​​of society, as has been successful in Asian countries such as China, Taiwan, and Singapore. These countries mixed Ethics of Confucianism with Business Practices.

Confucian ethics dictates hierarchical relationships and an identification with social rules. It also emphasizes ‘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 change for the better.

What is needed

To kick-start the much-needed ethical regeneration of Zimbabwean society, political leaders must take the lead in the fight against corrupt and speculative activities.

The rhetoric that seeks to punish corruption and implement economic measures to alleviate Zimbabwe’s monetary problems will not be enough.

Some kind of Thomas Sankara Ethical leadership is what is needed. Sankara, the President of Burkina Faso between 1983 and 1987 He enforced a rule that the country’s political leaders publicly declare their financial assets and wealth before taking office.

Another good model is the US approach. patrimonial statements of politicians. It obliges civil society to have transparency and the capacity to audit these asset declarations. International Transparency argues that such ethical practice allows citizens to hold politicians accountable.

Also, an ongoing financial audit while you are in political office should be mandatory thereafter. Transparency International chapter in Georgia has been doing this, and this helps monitor any unusual variations in politicians’ asset disclosures.

What to do

The Zimbabwean government should take a leaf out of Sankara’s Burkina Faso by swiftly arresting and prosecuting people convicted of corrupt and speculative activities, regardless of their status in society.

South Korea does this. Corrupt leaders are arrested Nonetheless political or financial influence.

In addition, the Zimbabwe Anti-Corruption Commission should have the ability to execute optimally. It is meant to curb and expose corruption. But it is blunted by lack of funds.

It is also urgent that the Zimbabwean government enact whistleblower protection legislation. Whistleblowers need to be protected in the public and private sectors.

The government must also take steps to improve governance practices in the private sector. The head of the Zimbabwe Anti-Corruption Commission, Judge Loice Matanda-Moyo, recently stated 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 for companies in Zimbabwe, should insist that all companies have an ethics or compliance office. Its mandate would be to ensure ethical business conduct.

And it should be mandatory for all senior executives in the company to issue a statement of ethics annually, reflecting the ethical practices of their organizations, good or bad.

Finally, creating an ethical society in your conduct is a time-consuming process. It should include the inculcation of ethical principles in the school system. This would mean that from an early age, Zimbabweans are taught about moral and upright behavior. A model worth emulating is dotoku, or moral education, in primary and secondary education in Japan. This was introduced in 2018 and is a Complete subject with standardized textbooks. .

This approach should also be linked to other topics, such as science and business.

In other words, the word “ethics” should become synonymous with the interactions and behavior of Zimbabwean society, and not an alien word.The conversation

Tapiwa chagonda, Associate Professor of Sociology and Director of the Center for Data Ethics at the Institute of Intelligent Systems, University of Johannesburg

This article is republished from The conversation under a Creative Commons license. Read the Original article.


www.moneyweb.co.za

Leave a Reply

Your email address will not be published. Required fields are marked *