ABBREVIATIONS

EXECUTIVE SUMMARY

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ABBREVIATIONS

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EXECUTIVE SUMMARY

Zimbabwe approaches the next millennium with a menu of difficult policy options on the economic front. The major cause of the economic crisis currently facing Zimbabwe is a crisis of governance rooted in the Government’s institutional structures responsible for the custody of the public purse, the budget, and the delivery of fiscal and monetary policies. These have proved inadequate and inefficient in protecting or promoting the public interest. They have failed in fostering prudence and good governance in the area of economic management, particularly in the administration of sound fiscal policies, the reform of public enterprises and in controlling public expenditures within prescribed constitutional limits, among other areas. In addition, the disproportionate influences of the International Monetary Fund (IMF) and the World Bank (WB) in prescribing policies that are inappropriate and harmful and the failure of the Government of Zimbabwe to protect the public interest in this regard by managing these relationships prudently has worsened the crisis.

On Thursday 23 October, the Minister of Finance, Dr. Herbert Murerwa, presented to Parliament the „Millennium" 2000 Budget, which gives estimate budgets for the year ending 31 December 2000. The budget document, which has been dubbed the „Blue Book", has generally been discounted by analysts as a disappointment on the grounds that it does not meet the expectations of most, if not all, sectors of society. The major flaws in the budget are that the figures do not show any direct link to the reality of the country’s economic situation. For instance, there is no indication in the document of how the government plans to deal with issues such as the ever accumulating debt burden, AIDS, high unemployment rates, rising inflation, the high budget deficit, and the ever decreasing real wages, among the many issues that the budget was expected to address. The budget therefore leaves Zimbabweans with nothing to look forward to in the next millennium.

The Zimbabwe National Chamber of Commerce (ZNCC), Parliamentary Advocacy Office (incorporating the Zimbabwe Congress of Trade Unions (ZCTU), Parliament of Zimbabwe) and the Zimbabwe Economics Society (ZES), in conjunction with the Friedrich-Ebert-Stiftung (FES) co-hosted a one day seminar to deliberate on and discuss the Millennium budget. The objectives of the seminar were to:

• create a platform for dialogue on important national policy issues related to the budget;

• enhance understanding of the budgetary process among civic, business, Parliament, academia and labour;

• engage civic society, business, Parliament, academia and labour in a critical appraisal of the Millennium budget; and

• develop specific recommendations for consideration in the final national budget for the year 2000.

The rationale behind this seminar was to bring together stakeholders in the budgetary process to share ideas on how Zimbabwe should move forward in this important process.

The thrust of the discussions revolved around the following three broad topics:

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• critically analysing the budget against the background of the current state of the economy in the country;

• analysing the political economy of the budget process; and

• identifying possible strategies and making proposals for the best way forward for the Zimbabwe economy.

The meeting agreed that the country’s economic situation is in a crisis and there was need for the participants to come up with concrete suggestions and solutions to the problems bedevilling the country. One participant remarked that the situation is so bad that if Zimbabwe was a company, it would have been liquidated.

The major issues highlighted at the seminar include the following:

• There is no doubt that the country is experiencing a serious economic crisis as manifested by the rocketing inflation, high unemployment and loss of investor confidence, all of which point to the need for a more positive budget. This was echoed in all the presentations and the discussions at the seminar.

• It was emphasized throughout the presentations and discussions that there was need to come up with not just marginal piece-meal solutions to the problems, but concrete fundamental rethinks of the philosophy guiding the country’s economy and correcting the present budgetary process. The Chair constantly reminded the participants that criticism alone was not enough as there is need to make concrete contributions on the way forward.

• Underlying the economic crisis in the country is a general lack of political will to seriously address the problems.

• The Millennium budget as presented has serious weaknesses that need to be addressed and corrected if it is going to influence change in the economic performance of the country.

• The consensus from the discussions indicated that the budget as presented is pointing the country in the wrong direction and has to be completely overhauled.