The Sunday News
Dr Bongani Ngwenya
Preamble:
THE Confederation of Zimbabwe Industries (CZI) says President Emmerson Mnangagwa’s drive towards a middle-class economy by the year 2030 is possible if Zimbabweans work together to increase productivity.
While listening to Foreign Affairs Minister Dr Sibusiso Moyo, discussing the Government’s plans for re-engagement and renewal of Zimbabwe’s international economic relations on the side-lines of the Commonwealth Heads of Government Meeting in London, I was thinking to myself that there is a strong possibility that the new political economy can result in the country achieving the economic goal of becoming a middle class economy by the year 2030 that is about 12 years from now.
On the other hand, the moderator of the event that took place at the Chatham House (The Royal Institute of International Affairs) in which Dr Moyo made his presentation on the country’s drive for re-engagement and renewal of international economic relations, did not mince his words.
He made it clear in his remarks when introducing Dr Moyo that a lot of people need to be convinced that Zimbabwe has indeed changed bearing in mind that our President has been part of the past political dispensation and political economy.
This scenario raises a question of trust. Can a leopard change its spots? The Government is pursuing an agenda for economic recovery and promoting itself as a trade and investment destination following a presidential transition in November last year.
So far there has been vast good policy pronouncements including the vision for turning the country into a middle class economy by the year 2030.
This sounds like a millennium goal that we are setting for ourselves. The argument is that achieving this goal will certainly take much more than policy pronouncements. It will take political will to embark on necessary reforms, and walking the talk.
Dr Moyo pledged and committed the President of the country to his own words in front of the whole world. China for example moved from economic doldrums to a middle class economy today through a sustained and commitment to necessary reforms.
Like I have always said, we can learn a lot from our all-weather friend. The success story of China lies on that country`s leadership commitment to reforms and walking the talk.
What is a middle class economy?
The dream of turning Zimbabwe into a middle class economy may sound far-fetched and quite remote based on the historical background of the country. Investopedia describes middle income countries or economies as of July 2017 as nations or economies with a per capita gross national income (GNI) between $1 005 and $12 235.
Middle income countries or economies are one of the income categories that the World Bank uses to classify economies for operational and analytical purposes. This may sound rather too ambitious for Zimbabwe.
About 30 years ago turning into a middle class economy would have sounded rather too ambitious for China, but today there is argument that China is suffering from the middle income trap. In other words an economy has to develop to such levels, in order to experience the challenge of suffering from the ‘‘trap’’.
Since its former leader Deng Xiaoping began implementing economic reforms, China has experienced fairly unprecedented levels of economic growth.
It has gone from having a 2,2 percent share of global GDP in 1982 to hitting 14,6 percent by 2012. No other nation in the past century and a half has grown more rapidly over 30 years than China has
Middle income countries or economies are classified into lower-middle income and upper-middle income economies. Lower-middle income economies have per capita GNIs between $1 006 and $3 955, while upper-middle economies have per capita GNIs of between $3 956 and $12 235.
Middle income countries are a very diverse group by region, size, population and income level, ranging from tiny nations with very small populations such as Belize and the Marshall Islands to all four of the BRIC giants — Brazil, Russia, India and China. By the way, South Africa is incorporated into this BRICs club. Who knows, may be in the future if Zimbabwe does well, the country could be incorporated into the BRICs.
China and India together hold nearly one-third of humanity and continue to be increasingly influential players in the global economy.
There are 53 lower-middle income economies, and 56 upper-middle economies.
The diverse nature of these 109 middle income countries means that the challenges facing many of them are quite different.
For nations in the lower-middle-income category, the biggest issue may be providing its citizens with essential services such as water and electricity.
For the economies in the upper-middle-income category, the biggest challenges may be curbing corruption, improving governance, just to mention a few examples.
Middle income countries are essential for continued global economic growth and stability. According to the World Bank, sustainable growth and development in middle income countries has positive spill overs to the rest of the world.
Good examples of these spill overs are poverty reduction, international financial stability and cross-border global issues including climate change, sustainable energy development, food and water security, and international trade.
Middle income countries have a combined population of 5 billion, or over 70 percent of the world’s 7 billion people, and include 73 percent of the world’s poor. Representing about one-third of global GDP, middle income countries are a major engine or drivers of global economic growth.
In conclusion, it is amazing to note that Zimbabwe has changed and is moving on. We are indeed dreaming big as a nation. When the Government talks of building the country`s economy into a middle class economy by the year 2030, I want readers to appreciate that the dream is to take the country to the position and phenomenon that I have deliberately outlined above.
The argument is that achieving such economic strides will take much more than policy pronouncements, much painful scarifies in the form of economic reforms. Time will tell.
Dr Bongani Ngwenya is based at the University of KwaZulu-Natal as a Post-doctoral Research Fellow and can be contacted on [email protected]
