bit by bit we will get there if.....
November 15th 2010 06:15
The economic quake that shook the Zimbabwe’s business operations produced knock-on effects that were detrimental to the running of the nation’s businesses.
As the country is trying to recuperate from the quagmire, it is of paramount importance for the nation to adopt homegrown and innovative policies that can help in the revitalisation drive.
The recent worldwide recession enhanced the business’ quandary. It resulted in a scenario where the customary world economic financial powerhouses are reeling from the shock.
The ripple effects have been transferred to nations like Zimbabwe who are like intensive care patients who expect the medical personnel (world power houses) to feed and inject them. Unfortunately, the medics are also ailing.
The antidote lies in the patient’s realisation of the need to stand up and stagger to the tray to grab some medicine and food. It is high time the nation realises this and stops expecting huge financial aid inflows (at least for now).
We have to “eat what we gather” and this requires a high level of prudence in the allocation of the gathered resources. The sections of the economy that have the greatest potential of leading the resuscitation drive should have more resources allocated to them if economic healing of the economy is to be achieved.
Economic development can be propagated by either a gradualist approach or a big push criterion. The gradualist approach is a slow movement towards economic growth.
The economic recovery process will be characterised by imperceptible changes rather than through abrupt, major changes. The small changes will result in perceptible changes over long periods of time. One of the “imperceptible” changes that we need as a nation is the manner in which the scarce financial resources are distributed.
The big push criterion is when big investments are injected into the economy thereby resulting in massive boosting of the nation’s economic growth. This translates to increments in the nation’s employment levels, and foreign currency reserves. It may also result in a favourable balance of payments.
The big push approach is ideally the best approach but nevertheless it requires a huge capital inflow into the economy. Zimbabwe is in a transitional period where a quest to redeem itself from the shadows of the economic quandary is the ultimate aspiration.
The economic blueprints that were crafted in this era centred much on the anticipation of the nation’s ability to utilise the big push approach.
Unfortunately, the whopping investments are not flowing as initially expected. The limited financial inflows into the country imply that a gradualist approach to economic development has to be implemented.
One of the major “imperceptible” changes that should be implemented is the allocation of financial resources. The limited funds that are flowing in from the different sectors of the economy should be rechannelled to the most strategic productive units of the nation such as the small to medium enterprises (SMEs) sector.
The role of the SMEs has been generally misunderstood and underestimated by most nations. The use of large enterprises as the main driving force of the economy has been utilised by some nations. Nevertheless a developing economy like ours with large volumes of informal trading needs to formalise the informal sector to boost its economy.
Some economies, Tanzania being an exceptional example, have seen their economies being boosted by the SMEs. In developed nations such as the United States of America about 60 percent of the employed are in SMEs. The sector contributes about 50 percent of the gross domestic product (GDP) and 30-60 percent of the exports. If developed nations are benefiting from the SME sector, why not us?
Growth without equity is futile in the poor man’s perception. One of the major virtues of the SMEs inclusion in the economic recovery drive is the possible attainment of growth with equity. In cases where there is growth without equity the low income earners will be very instrumental in the preparation of the national cake but will have to consume crumps when the cake is ready. The channelling of financial resources to the small enterprises is de rigueur step in towards the attainment of growth with equity.
The standards of living of the ordinary people can also be enhanced if the SME sector is adequately supported. Africa’s economies are infested with low income earners who cannot break into the business circles easily. Most of these earners are trapped in a vicious circle of poverty. Their disposable income is low, thereby resulting in low savings, very insignificant investments and ultimately poor standards of living. The recurring process continues until an effective external influence such as a government policy is implemented.
The reliance of income earners on their wages and salaries will propagate the effects of the poverty circle’s wiles. There is need to develop and support an entrepreneurial culture to break this.
There is a dire need to implement policies that boost the SMEs operations. Less stringent rules should be adopted in the opening of the small scale business operations. The SME sector’s contributions to the nation’s GDP will be of great assistance to the convalescence of the economy. Zimbabwe is endowed with numerous valuable resources. The effective utilisation of these resources can be boosted by the inclusion of the small private players in the economic affairs.
The stabilisation of the economic environment led to the birth and re-birth of numerous SMEs and the onus is upon the government to support the sector. A clear credit system that ensures that the potentially productive SMEs are supported should be enacted. This will reduce the mortality rates (closure level) of these SMEs. Bit by bit we’l get there if we can develop and support a strong entrepreneurial culture.
This is very essential for the future competitiveness of the Zimbabwean economy and for generating growth. Financial and technical advice should also be offered to the existing SMEs to ensure entrepreneurial dynamism which creates a strong and vibrant business community. Economic development can be achieved if our policies are able to provide business starters with the skills for starting and managing a business in an increasingly competitive environment.
As the country is trying to recuperate from the quagmire, it is of paramount importance for the nation to adopt homegrown and innovative policies that can help in the revitalisation drive.
The recent worldwide recession enhanced the business’ quandary. It resulted in a scenario where the customary world economic financial powerhouses are reeling from the shock.
The ripple effects have been transferred to nations like Zimbabwe who are like intensive care patients who expect the medical personnel (world power houses) to feed and inject them. Unfortunately, the medics are also ailing.
The antidote lies in the patient’s realisation of the need to stand up and stagger to the tray to grab some medicine and food. It is high time the nation realises this and stops expecting huge financial aid inflows (at least for now).
We have to “eat what we gather” and this requires a high level of prudence in the allocation of the gathered resources. The sections of the economy that have the greatest potential of leading the resuscitation drive should have more resources allocated to them if economic healing of the economy is to be achieved.
Economic development can be propagated by either a gradualist approach or a big push criterion. The gradualist approach is a slow movement towards economic growth.
The economic recovery process will be characterised by imperceptible changes rather than through abrupt, major changes. The small changes will result in perceptible changes over long periods of time. One of the “imperceptible” changes that we need as a nation is the manner in which the scarce financial resources are distributed.
The big push criterion is when big investments are injected into the economy thereby resulting in massive boosting of the nation’s economic growth. This translates to increments in the nation’s employment levels, and foreign currency reserves. It may also result in a favourable balance of payments.
The big push approach is ideally the best approach but nevertheless it requires a huge capital inflow into the economy. Zimbabwe is in a transitional period where a quest to redeem itself from the shadows of the economic quandary is the ultimate aspiration.
The economic blueprints that were crafted in this era centred much on the anticipation of the nation’s ability to utilise the big push approach.
Unfortunately, the whopping investments are not flowing as initially expected. The limited financial inflows into the country imply that a gradualist approach to economic development has to be implemented.
One of the major “imperceptible” changes that should be implemented is the allocation of financial resources. The limited funds that are flowing in from the different sectors of the economy should be rechannelled to the most strategic productive units of the nation such as the small to medium enterprises (SMEs) sector.
The role of the SMEs has been generally misunderstood and underestimated by most nations. The use of large enterprises as the main driving force of the economy has been utilised by some nations. Nevertheless a developing economy like ours with large volumes of informal trading needs to formalise the informal sector to boost its economy.
Some economies, Tanzania being an exceptional example, have seen their economies being boosted by the SMEs. In developed nations such as the United States of America about 60 percent of the employed are in SMEs. The sector contributes about 50 percent of the gross domestic product (GDP) and 30-60 percent of the exports. If developed nations are benefiting from the SME sector, why not us?
Growth without equity is futile in the poor man’s perception. One of the major virtues of the SMEs inclusion in the economic recovery drive is the possible attainment of growth with equity. In cases where there is growth without equity the low income earners will be very instrumental in the preparation of the national cake but will have to consume crumps when the cake is ready. The channelling of financial resources to the small enterprises is de rigueur step in towards the attainment of growth with equity.
The standards of living of the ordinary people can also be enhanced if the SME sector is adequately supported. Africa’s economies are infested with low income earners who cannot break into the business circles easily. Most of these earners are trapped in a vicious circle of poverty. Their disposable income is low, thereby resulting in low savings, very insignificant investments and ultimately poor standards of living. The recurring process continues until an effective external influence such as a government policy is implemented.
The reliance of income earners on their wages and salaries will propagate the effects of the poverty circle’s wiles. There is need to develop and support an entrepreneurial culture to break this.
There is a dire need to implement policies that boost the SMEs operations. Less stringent rules should be adopted in the opening of the small scale business operations. The SME sector’s contributions to the nation’s GDP will be of great assistance to the convalescence of the economy. Zimbabwe is endowed with numerous valuable resources. The effective utilisation of these resources can be boosted by the inclusion of the small private players in the economic affairs.
The stabilisation of the economic environment led to the birth and re-birth of numerous SMEs and the onus is upon the government to support the sector. A clear credit system that ensures that the potentially productive SMEs are supported should be enacted. This will reduce the mortality rates (closure level) of these SMEs. Bit by bit we’l get there if we can develop and support a strong entrepreneurial culture.
This is very essential for the future competitiveness of the Zimbabwean economy and for generating growth. Financial and technical advice should also be offered to the existing SMEs to ensure entrepreneurial dynamism which creates a strong and vibrant business community. Economic development can be achieved if our policies are able to provide business starters with the skills for starting and managing a business in an increasingly competitive environment.
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