Is Zimbabwe Rich or Poor?

Zimbabwe is Potentially Rich

Zimbabwe is potentially a rich country which is unfortunately ranked amongst the poorest at the moment.  It is one of the richest countries in terms of mineral resources, fertile arable land, climate, and human resources. Nevertheless it now ranks second from the bottom according to an International Monetary Fund (IMF) report which ranked countries  based on their Gross Domestic Product (GDP) at Purchasing Power Parity (PPP). It was ranked second from bottom with only the Democratic Republic of the Congo (DRC) below it. That is a really sad statistic considering that Zimbabwe was the bread basket of Southern Africa and had capacity to export food to the region. We made enough surplus for exports. With exports Zimbabwe had a source of foreign currency with which to import machinery, spare parts, and essential drugs. The machinery was essential for industrial output. An economy which produces can meet local demand and export the surplus. It is cheaper for consumers to buy local products than imports due to transport and other costs. Now instead of using foreign currency for essential imports, Zimbabweans are using forex to buy imported goods in local but foreign owned shops. So even the local owners import as much as 70% of their products. 

What is GDP?

Without getting too technical with economic jargon to avoid killing the debate, the GDP of a country is a measure of the goods and services the country produces. A country with a bigger GDP is doing better than one with a smaller GDP but the per capita GDP may favour a smaller population for countries with comparable GDPs. However a larger population is an advantage for productive countries. They have a larger pool to get skilled manpower and a bigger market for products and services. China and USA are great examples. Per capita GDP is the GDP divided by the population of the country. It by no means represents the precise income of every individuals. it is an approximation, an average. Disparities are found where the income inequality is wide, where you have the extremely poor majority and the extremely rich privileged minority. In this case income and capital inequality is wide. Zimbabwe has some extremely poor families living on less than a dollar a day and some extremely rich individuals who can afford to send their children to boarding schools abroad but these are a tiny minority. Perhaps the 90/10 rule applies here: 90% of the capital in the hands of 10% of the population. I suspect it could be worse. 

Human Development Index

If we use the Human Development Index, Zimbabwe may fare better because this also considers some strong points such as a long and healthy life, access to knowledge and a decent standard of living. Many will agree that these indicators do not find Zimbabwe at its finest hour. The deteriorating economic put us in a very difficult situation. The good news is that it doesn't have to be this way, and we should find ways of changing the status quo for the better. 

Unreliable Statistics 

The calculation for the poverty or wealth indicators are unreliable as they use unreliable data from poor countries who find data collection expensive to carry. There are no clear records on how many people have left the countries. Even the embassies of poor countries in rich nations do not seem to be bothered about these statistics. There's usually a relationship of animosity although this is not based on a scientific study. 

Political Response to Economic Problems 

The economic challenges Zimbabwe is facing are well articulated and visible for all to see. Fewer and fewer are denying their existence but what we have seen are political and ideological responses which include the now so obvious blame game and refusal to take responsibility. Refusal to take the blame. If a patient refuses to accept they have a condition which requires medication, it is difficult to guarantee that the patient will follow the prescription as directed. The patient may actually sell the medication prescribed. Admitting that things are not okay is the first step in dealing with a problem. A culture of blame without taking concrete steps just creates more excuses as the situation deteriorates. A country which believes it is under economic sanctions from certain countries should strengthen its relations with other countries. I believe Zimbabwe is capable of busting sanctions because they've not been imposed by countries such as South Africa, China, Russia, and Brazil. In fact our biggest trading partner has always been South Africa but we have simply become an exporter of human resources to South Africa's economic growth and development, and an importer of South African products and services. We have become a market for not only South Africa but China and even the Eurpean Union (EU). For some reason the importation of new and used vehicles and all manner of products have never stopped despite economic sanctions. Someone explain this to me. Give me the statistical impact on the GDP before and after the imposition of illegal economic sanctions. The response to the economic challenges has been political and ideological rhetoric and a further deterioration of the economy. 

Economic and Financial Ignorance 

There has been a clear lack of economic and financial intelligence to serve the public good. We have mastered the art of primitive accumulation of capital for selfish gain. The result has been the wider gap in income and capital inequality. The haves continue to acquire more through political contacts and the have nots continue to wait for the day divine intervention will reverse their misfortunes. There's clear evidence of economic and financial ignorance. We can not grow an economy if we don't produce anything. It is not sustainable to import as much as 80% of our products from other countries. It means we have simply become a market for other economies. The three key drivers of economic growth are human resources, capital, and productivity. We have the capacity for economic activities but no clear economic policies. The implementation of any previous has been a disaster. We should learn from that to plan for the future we want. 

What is Capital?

We need to create our own capital. To do this we require a new mindset which can understand the value of what we have as a country. We need to understand the value of human capital, the value of land, the value of political peace, the value of economic activity. We need to understand that there's value in building robust state institutions that are not tainted by party political ambition and ideology. Capital is integrity, honesty, family, country. Capital is a currency, not monetary but a mindset which allows us to create and respect value. 

Rich or Poor?

Zimbabwe is a rich country with more poor people than rich people. The mindset of its citizens has promoted poverty due to both financial and economic ignorance. The absence of efficient public goods and services is evidence of a  mismanaged economy. The poverty in Zimbabwe is temporary, we need a change of mindset in which we stop offering ideological and party political solutions to economic challenges, we begin to use the wisdom of the crowd to confront our challenges. The majority of Zimbabweans are physically poor but must stop propagating the poverty mentality, must not also ignore the reality obtaining. Zimbabwe is not poor and will never be poor if our mindset changes to accept we have erred but can rise again.