The Road to Recovery
In the past 18 months we have been struggling as a country to deal with the legacies of 37 years of dictatorial control and maladministration. This has involved correcting our living standards and dealing with historical liabilities. Now that we are nearing the end of this phase, we need to work out how to get onto the road to recovery. In other countries like Argentina and Greece they have had the assistance of a big brother - the IMF and the EU. In our case, I think we are on our own.
For many in our land the present situation is simply impossible. We need a safety net that will assist many individuals to get through the next year until the benefits of any recovery can start filtering through. In addition, we need to start to take advantage of the many things that are our own integral advantages as a country - some of them a legacy of our recent past.
Let's start with the need for targeted support for the vulnerable. When the Government made the right decision to remove all subsidies from the basic commodities of fuel, electricity, maize, vegetable oil and wheat, they hurriedly had to reverse themselves when they appreciated that this was a step to far. But what was wrong being not the basic decision, but its sequencing. What we should have done was to introduce a national voucher system for these basis needs.
Under such a system we could get the Reserve Bank to print vouchers which could be exchanged for these basic foods at any store or supermarket and provide sufficient food to meet basic needs. This would enable the absolute poor among us to buy their basis needs to survive.
Subsidies on an untargeted basis would cost us many times more than that and achieve little, most of the expenditure wasted on corruption and on other beneficiaries who do not need subsidy. Current blanket maize subsidies will cost us nearly Z$3 billion in the next 12 months.