According to the Zimbabwe's "Indigenisation and Economic
Empowerment Act" (Chapter 14:33), “indigenisation” means “a
deliberate involvement of indigenous Zimbabweans in the economic activities of
the country, to which hitherto they had no access, so as to ensure the
equitable ownership of the nation’s resources.”
Who is an indigenous Zimbabwean? The Act defines him/her
as, “any person who, before the 18th April 1980, was disadvantaged by unfair
discrimination on the grounds of his or her race, and any descendant of such
person.”
“Empowerment” is defined in the Act as “the creation
of an environment which enhances the performance of the economic activities of
indigenous Zimbabweans into which they would have been introduced or involved
through indigenisation.”
Zimbabwe
is under a spirited effort to empower its citizens. This is a laudable pursuit!
How can this be done better?
To
do so, we need to have a certain behaviour of individuals by way of four
pillars: 1) education for humanistic value system, 2) entrepreneurial industrialisation, 3) labour flexibility and 4) a highly aspirational political processes. In turn this will makes it possible to create a certain type of
economy. We need to have an economy whose extractive natural processes
(agriculture, mining and tourism) feed into an export-oriented modern industrialisation.
There
are two approaches in the economic activities, 1) a ‘creator-based economy’ (full of
commercial innovators, inventors, entrepreneurs or architects) and builders; or
2) a ‘stewardship-based
economy’ (full of corporate managers, caretakers, watchers and messengers).
After
our birth, we should develop and unleash our “causative agency.”
“Causative agency” is the effortful ability to reflect upon and make decisions about things that concern oneself and recognizing that one’s actions have consequences.
“Causative agency” is the effortful ability to reflect upon and make decisions about things that concern oneself and recognizing that one’s actions have consequences.
To
be a ‘creator-based economy,’
we need the following behaviours and individuals to deal with economic
stagnancy:
1.
A Corporate Creator is a person who produces something that is
new and fresh, causes something to exist or originate which was not there
before. The creation of something out of nothing is called “creatio ex
nihilo.” Being a creator means one frames and shapes from
nothing to something.
Creators inform and
guide the universe; they control and adjust evolution intelligently. According
to the Etymology Dictionary, the word "create"
is of late 14th century from Latin ‘creatus,’ past participle of ‘creare,’
which means, "to make, bring forth,
produce, beget."
The
corporate creator:
a. makes
socially meaningful, highly dynamic and life changing decisions;
b. innovatively
solve problems; and
c. initiates
new ventures, products and services that create new jobs, new value for the owners
and new revenue for the government through taxes; because the Mind is the
'womb' of creation.
If
the behaviour of a stock exchange is a good barometer or indicator of an
economic size and measurement of activities, we should seek a very interesting detail.
In 2012, there were 76 companies active on the Zimbabwe Stock Exchange (ZSE). Of these, over a period of 32 years since 1980, only 4 (NMB Bank, Econet Wireless, FBC Holdings and Trust Holdings - 5.27%) were originally created/founded by persons of African origin (PAOs). This does not include those on the stock exchange through privatization of State-owned enterprises, reverse listing (ABC Holdings, TN Holdings and Kingdom Financial Holdings – 3.9%) and those arising out of acquisitions, merging and demerging.
In 2012, there were 76 companies active on the Zimbabwe Stock Exchange (ZSE). Of these, over a period of 32 years since 1980, only 4 (NMB Bank, Econet Wireless, FBC Holdings and Trust Holdings - 5.27%) were originally created/founded by persons of African origin (PAOs). This does not include those on the stock exchange through privatization of State-owned enterprises, reverse listing (ABC Holdings, TN Holdings and Kingdom Financial Holdings – 3.9%) and those arising out of acquisitions, merging and demerging.
At
this rate, how long will it take for persons of African origin to create,
nurture, grow and list 72 companies on the stock exchange? That will not happen when we have an investment climate driven by “quick riches”?
That will not happen until we become “coffee tree growers” who grow and nurture
plants until they mature after 4-7 years and then harvest for the next 20-40
years?
2.
A Corporate Architect is a person who conceives,
designs and plans a company to the last and minute detail using geometric
principles and mathematical relationships. 'Arche' is a Greek word which
means “primordial substance” while 'tekton' is also Greek for “builder.”
Therefore 'Architect' means a builder of the earliest stage of development.
“Make
no little plans. They have no magic to stir men's blood and probably themselves
will not be realized. Make big plans, aim high in hope and work, remembering
that a noble, logical diagram once recorded will never die, but long after we
are gone will be a living thing, asserting itself with ever-growing insistency.
Remember that our sons and grandsons are going to do things that would stagger
us. Let your watchword be order and your beacon beauty. Think big.” - Daniel
Burnham, Chicago architect (1894-1912) and a Freemason.
Architecture
as an art and science has given shape to the life and thought of Human Beings
motivated by physical necessity and aspiration. "The laws of
architecture are moral laws, as applicable to the building of character as to
the construction of (magnificent buildings)." According to Roman
architect Vitruvius in the early 1st century CE, a good building should satisfy
the three attributes of robust durability, functional utility and delightful
beauty. ('De Architectura').
When one is a creator or an architect, he/she frames and shapes
from nothing to something, from unmanifest to manifest.
3.
A Corporate Builder is a person who objectifies the creative
ideas of an Architect into reality. Professionally, a builder uses stone, wood and concrete to
construct a structure as designed and planned by the Architect. The Architect
would have defined the structure and behaviour of a building. The Builder takes the plan from the Architect (Creative
Mind), and bring something into existence or an objective reality. It is
the Builder who projects into objectivity from the Architect (Creative
Mind) the whole plan.
“The true Spirit of Enterprise is not
about...is about creating. It is about building. It is about discovery. And it
is about innovating. There are no historical forces of progress. There is only
human action, the action of individuals. Individuals create wealth. They do so
by creating and building enterprises that combine labour, capital, and
materials to make things that didn't exist before, things that people value.
The consequence of their actions is economic growth and development. Great
businessmen, for all their humanness, are creators and builders and are driven
by, above all else, the desire to create and build. And it is the drive to
create and build that is the true Spirit of Enterprise.” -
The Free Market, The Mises Institute monthly newsletter (December 2002, Volume
20, Number 12) commenting on “Giants of Enterprise: Seven Business
Innovators and the Empires They Built,” by Richard Tedlow.
"Man has been always a builder, and nowhere has he shown
himself more significantly than in the buildings he has erected. When we stand
before them - whether it be a mud hut, the house of a cliff-dweller stuck like
the nest of a swallow on the side of a canyon, a Pyramid, or a Pantheon - we
seem to read into his soul...In the Pyramids, of all monuments of mankind the
oldest, the most technically perfect, the largest, and the most mysterious.
Ages come and go, empires rise and fall, philosophies flourish and fail, and
man seeks him out many inventions, but they stand silent under the bright
Egyptian night, as fascinating as the are baffling. An obelisk is simply a
pyramid, albeit the base has become a shaft..." - Joseph Newton,
"The Builders.”
The
work of corporate creation, design and building is collectively called an
“entrepreneurship” in general terms, but these terms in practice are indistinguishable.
4.
A Corporate Icon is a person regarded as a depiction or representative
symbol of something profound. In general sense, an icon as a symbol is a name,
face, picture, edifice or a person readily recognized as having some well-known
significance or embodying certain qualities through literal or figurative
meaning, usually associated with social, political or economic standing. An
iconic brand should:
a.
Be inspiring in society's values of
discerning freewill, responsibility, integrity and service to humanity;
b.
Possess physical or symbolic features that
make them instantly recognizable, visible with a very wide and deep reach
because a corporate “built and fortified in a high mountain cannot fall nor
go unnoticed;” and
c.
Have a compelling story and manage to
remain true to its original values while reinterpreting them in light of contemporary
culture.
5.
A Corporate Titan is a person of frugality, sobriety, sound
financial strength and importance in the corporate world through optimizing
profitability by increasing the productivity of labour, improving the marketing
and production techniques. “The pursuit
of profits is essential to a successful economy, allocating resources to the
use consumers value most…Writing in 1776, Adam Smith noted, "It is not
from the benevolence of the butcher, the brewer, or the baker that we can
expect our dinner, but from their regard to their own interest." Michael
Boskin, "Obama and 'The Wealth of
Nation'." Wall Street Journal July 1, 2012.
If
new private capital creation and accumulation (PCCA) is so low among
many persons of African origin (PAO) no matter the level of education or
geographic location around the world, it cannot easily be improved by
legislated takeovers of or entry into existing companies. This may not yield
the best results. The most reliable, sustainable and key raw material to be a corporate
creator, architect and builder (CCAB) is ideas and the only free instrument
or tool for the work to be done for anyone is the Mind.
Empowerment
should be more about the legislation for the removal or minimization of
barriers of business entry to or to promote and protect the opportunities to:
1. Start
a new company, which will result in new jobs, a reward for the entrepreneur as
the risk taker and a new revenue stream for the fiscus;
2. Take
over an ailing company and turn it around for profitability and improved
productivity;
3. Develop
a new or unique product ahead of the market;
4. Create
a new market or expand the existing one locally, regionally and
internationally; and
5. Develop
an innovative way or new approach, new technologies of doing business, creativity
in production, processes and marketing.
There are two approaches in relation to each individual’s life
and the country, i.e. of one side, an economic creator, architect and builder;
or the other side, economic steward, caretaker, watcher and messenger.
According to Douglas John Hall, “The Steward” (Friendship
Press, 1994), “the steward is one who has been given the responsibility for
the management and service of something belonging to another, and his office
pre-supposes a particular kind of trust on the part of the owner or master.”
When we become only stewards, we are not being responsible
enough as human beings. We are being derelict and fatalistic. A
human being should exercise two things equally: incentives and innovation to
create new value on one side; and stewardship for value and property, on the
other.
Therefore,
in Zimbabwe, we need a deliberative and well-executed wave of corporate
creators, architects and builders (CCABs) for industrial novelty and new
jobs; and corporate icons and titans (CIT) for economic growth and productivity,
and job creation and security. This is done through
human worth, causation and responsibility
to drive civic-spiritedness, fiscal prudency and innovativeness.
"Economic growth is the fuel that makes new jobs,
creates new industries, and helps your hard work pay off...Growth expands the
tax coffers nationally and locally, enabling investments for the
future...Growth is not complicated. It
is a force of nature. But when it stalls, as it has for the last four years, it
will not return without effective leadership. A great leader understands and
applies the power of incentives to encourage growth. Incentives appeal to a
basic human instinct and motivate productive choices. They are used throughout
our lives from grades in school that encourage learning and higher performance,
to the incentives we use at work through pay, bonuses and promotions to
recognize and encourage accomplishment.
Incentives are the most powerful tool a government and its leaders have
to spur economic growth.
"Every voter needs to
ask which candidate will offer the most incentives to get our economy growing
again. For example, which candidate will
look at tax policy as an incentive to spur growth? Capital gains are taxed at a
lower rate in our tax system today to recognize and encourage people to put
their money to work. That money in turn
gets invested in businesses which hire and expand. That tax incentive
encourages risk taking and investment for growth. Which candidate understands the
power of tax incentives?
"Which candidate
understands how to effectively apply an incentive to encourage businesses to
invest in job training? It is a tragedy today that there are jobs available but
not enough people trained to fill them. Which candidate would streamline the
muddle of ineffective programs today and encourage corporations to sponsor
training programs through a simple, universal incentive? A properly-sized tax
credit for job trainees hired over the next five years would do the trick.
“Which candidate will
review every line of the tax code and regulation to assess its relevance and
its complexity? If there is a simpler,
clearer way to meet the goals, the regulation should be rewritten. If the regulation is outdated, it should be
scrapped. Job creators, particularly small businesses, are looking for clarity
and certainty: certainty from the tax code, certainty on the regulatory
environment. Business leaders cannot
create jobs when they cannot accurately assess the impact of taxes and regulations
on their business…
"Incentives should not
be confused with disincentives, their ugly step-sisters, which are based on
penalties and don’t motivate progress. They stifle investment and innovation.
Today, disincentives abound and are on the rise. Increased taxes, in whatever form, are a
disincentive to earn, to spend, to save and invest…
“Today, our fundamental
problem is a lack of economic growth and no attention to the incentives that
can re-ignite it. The test for deciding who should be our next President is who
understands that and will put the pieces in place to solve it. Our economy, job
prospects, investments and retirement plans will get substantial help by
picking the growth candidate. Which candidate has the record to arrive at the
big decisions and incentivize growth?" -
Charles R. Schwab, "Fundamental
Economic Requirements For Our Next President" Forbes, 14 October 2012.
With
such a sound human resource, Zimbabwe is too valuable to many of us to remain
economically stagnant and shrinking.
Japan
is the third world largest economy (GDP) after the USA and China and ranked 23rd
on the standards of living. Its GDP composition by sector is as follows:
agriculture (1.6%); industry (21.9%); and services (76.5%). But the country
only has fish and water as natural resources.
“To
ancient Egyptians, man’s destiny is often represented by his own fatal
instincts; instincts which mislead him on every possible occasion. Guided by
them the drowning man throws up his hands; the angry man clenches his fists,
tightens up his muscles, and becomes inarticulate; the young gather the fruits
of life before they are ripe; the old shut themselves away from the flow of
life and die of stagnation. Perverted instinct is the curse of the human race…
“The
cultivation of discernment was the aim of life, the want of it was a deadly sin
in their eyes, and ended in the annihilation of the individuality. To gain
perception of Truth, and so guide these fatal instincts, was the object of
initiation. From the first step even, the Aspirant was taught to look upon
himself as the centre of a universe of instinctive force, formed in a
microscopic pattern. Over him brooded the wings of the invisible – his pleroma
filled with the attributes of his divinity, as the universe is filled with the
rays of the light-givers.
"The
first necessity of the study … among the ancient Egyptians was the cultivation
of the faculties dormant in human nature. For they considered human power was
only limited by weakness of will, and poverty of imagination. The Will-Energy,
and Imaginative thought are often symbolized by fire and water, and the power
of the spirit by air… These are the divine trinity of Father, Mother and
Son…” - “Book of the Grand Words of each Mystery,” a Coptic
scroll found in Egypt in the 1800’s, and interpreted by an Egyptologist,
Florence Farr.
What
can you BE as an individual? In an article based on
the Harvard University business historian Richard Tedlow’s “Giants of
Enterprise: Seven Business Innovators and the Empires They Built,” "The
true Spirit of Enterprise is not about greed or exploitation. It is about
creating. It is about building. It is about discovery. And it is about
innovating. There are no historical forces of progress. There is only human
action, the action of individuals. Individuals create wealth. They do so by
creating and building enterprises that combine labour, capital, and materials
to make things that didn’t exist before, things that people value. The
consequence of their actions is economic growth and development. Great
businessmen, for all their humanness, are creators and builders and are driven
by, above all else, the desire to create and build. And it is the drive to
create and build that is the true Spirit of Enterprise."- The Free
Market, The Mises Institute monthly newsletter, December 2002, Volume 20,
Number 12.
Only
then can we build a competitive economy run by the “national bourgeois”
into three progressive stages and levels driven by factors, efficiency
and innovation. According to the Global Competitiveness Index (GCI), in
a factor-driven stage, an economy is based on factor endowments like natural
resources. An efficiency-driven stage is when an economy develops resourceful
production processes and increases product quality. An innovation-driven stage
is when an economy provides new or unique products and
services.
"Research
at the World Bank has found that once all of a country’s natural and produced
capital is added up, they together generally constitute less than 20 percent of
its actual wealth; the remaining 80 percent is intangible. What is intangible
wealth? The World Bank study, “The Changing Wealth of Nations,” defines it as
“human capital, social, and institutional capital, which includes factors such
as the rule of law and governance that contribute to an efficient economy.”
“Human
capital is the set of skills and knowledge people living in a country have
acquired. This is roughly measured by the average years of schooling per capita
and a country’s average healthy life expectancy. So yes, great teachers
certainly do contribute to the development of human capital…
“Social
and institutional capital is measured by the World Bank’s rule of law index.
This index takes into account the extent to which citizens have confidence in and
abide by the rules of society. In particular, it measures the quality of
contract enforcement, strong property rights, the rule of law, an honest
bureaucracy, as well as the likelihood of crime and violence, and an educated
populace, that enable the process of entrepreneurial innovation and job
creation in free markets....
“Good
governance underpins these things, but not all governance is good. Just as
government can enable the voluntary creation of wealth, it can also impede and
even destroy it.
“Why
is new firm creation lagging now? …numerous studies find that higher tax and
regulatory burdens impede entrepreneurial activity which in turn slow economic
growth and job creation. For example, a 2010 study, "The Economic Effects
of the Regulatory Burden," done for the Swedish Agency for Growth Policy
Analysis (of all places), found that while some rules are necessary for
entrepreneurs and markets to function “that countries with a light regulatory
burden show more rapid economic growth in GDP per capita.”
“A
2008 study, "Government Size, Composition, Volatility, and Economic
Growth," done for the European Central Bank examined the effect of
government size and fiscal volatility on economic growth for developed
countries between 1970 and 2004. The study finds that the bigger government and
the slower the growth rate. Every percentage point increase in the share of
total revenue going to government decreases overall economic output by more
than a tenth of a percent. The report further noted, “Public capital formation
may indeed turn out to be less productive if devoted to inefficient projects,
or if it crowds out private investment.” -
Ronald Bailey, "Government Did Not Build Your Business" 25
July 2012, http://reason.com/archives/2012/07/25/build-that-entrepreneurs-government
We need to give the hardworking young people the hope that there
are new jobs being created every day, month and quarter in each year and that a
robust formal economy will make it possible for those with an entrepreneurial
drive “as a major source of economic growth and job creation.” It has to
be profitable to start, own and manage a formal business so that the government
can rely on locally driven revenue to discharge its primary and key
responsibilities of promoting economic growth and stability; and providing
basic services and infrastructure.
An increasing number of the unemployed and a highly informalised
economy is unsustainable and a serious threat to political legitimacy while
debasing and demeaning the social and moral fabric of our being.
In 1989, the late Chinese leader Deng Xiaoping expressed a
concern that was concerned that the stagnant economy would lead to mass
unemployment and further social explosions. He said, “If the economy cannot
be boosted over a long time, it (the government) will lose people’s support at
home and will be oppressed and bullied by other nations of the world."
What are the legal and policy interventions required? What are
the institutional frameworks needed to make this become a natural progression
in the economy? How will the thinkers/crafters of sustainable policies and the
stewards of the institutional frameworks be driven by a moral imperative - a
high sense of honour or integrity in the work involved, dutifulness
or responsibility to what is expected of them with fervency and strong
eagerness, and better and sustainably improving standards of service
to the people?
Important read,
www.cato.org/sites/cato.org/files/serials/files/policy-report/2002/1/nations-wealth.pdf
On 28th November 2012, speaking at the official launch of the BAT Employee Share Ownership Scheme, Zimbabwe's President Robert Mugabe was quoted of having said, "The time was now ripe for indigenous Zimbabweans to form and successfully run their own companies, as economic empowerment was one of the goals of the liberation war.
"The process of taking 51 percent shareholding is only a process of empowering our people in companies that exist. The greater part is of our own people forming their own companies, to do that on their own not just taking what has been done by others. Establish your own mining enterprises, this is where I have a battle with you educated young people.
President Mugabe is also reported to have urged the indigenous Zimbabweans already in business to be disciplined and castigated a tendency by some to engage in corrupt activities in a bid to “get rich overnight”. “Please, my people, getting rich is not possible in a stroke. You have to work for it. It is a process. You cannot do it in a day.” - The Herald, 29th November 2012.
