ZCTU to the rescue?

The Zimbabwe Congress of Trade Unions (ZCTU), which gave birth to the Movement for Democratic Change, Robert Mugabe’s biggest headache since its formation four years ago, is about to bail out the beleaguered 79yearold president. It has joined hands with the government to resuscitate the country’s ailing economy. And just like it helped bring back real multiparty democracy to the country, the labour body could bring about real economic change. Though keeping a low profile, allowing Finance Minister Herbert Murerwa to take all the credit, the ZCTU, which has been shunned by the government since its baby almost toppled Mugabe’s administration in the parliamentary elections of 2000 and the presidential elections of 2002, the ZCTU is definitely calling the tune. President Mugabe and some of his close lieutenants may be publicly pouring venom on the labour movement, but they are quietly conceding to the demands of the labour body.

The government had little choice. It was desperate. And needed a way out. The economy had shrunk by 19.3 percent in three years, and it appeared worse was still to come. Inflation had soared to 208.1 percent. The country was crippled by a shortage of fuel and coal. There was a shortage of almost all basic commodities. External debt arrears had risen to US$1.4 billion. Exports were down by half to US$1.3 billion. Historical sources of foreign currency such as Balance of Payment support, donor funding, lines of credit, and foreign direct and portfolio investment, had all dried up.

After months of dilly-dallying the government finally agreed in December to resuscitate the Tripartite Negotiating Forum (TNF) which comprises the government, employers through the Employers Confederation of Zimbabwe (EMCOZ) and labour through the ZCTU. Formed in September 1998 when the country’s economic slide began, the TNF has been on and off. The government has tried to go it alone on at least two occasions when it unveiled economic blueprints such as the Zimbabwe Programme for Economic and Social Transformation (ZIMPREST) and the Millenium Economic Recovery Plan (MERP), but both failed to take off.

According to the ZCTU, the programmes failed because the dominant view in government was that the crisis in the country emanated from efforts by the West to recolonise Zimbabwe. Business was, therefore, seen as part of the problem allegedly because they formed cartels and were profiteering at the expense of the people. Labour was viewed as part of the opposition out to oust the ruling ZANU-PF. The Crisis was said to be the result of “…deleterious effects of neo-imperialist machinations aimed at limiting national sovereignty over the redistribution of national assets such as land in favour of indigenous Zimbabweans…” The government also felt there was a “well-orchestrated negative publicity intended to scare away foreign investment” while well meant economic reforms such as liberalisation were being “exploited by crime syndicates and corrupt businesses who illegally externalise funds, destabilise foreign exchange markets through speculative behaviour which in some cases in foreign inspired in order to frustrate economic stabilisation efforts of the government”.

Though the government claimed that the people of Zimbabwe were resilient and were united under a visionary leadership, the economy continued to decline. The introduction of technocrats into the cabinet and later, the appointment of a war cabinet, both failed to turn around the economy because those who “dared to suggest a course of action at odds with the preferences of the powers that-be” were accused of being “sell-outs” and were either kicked out or ignored. But faced with a devastating drought which had left nearly half the nation in need of food aid and after realising that some of the measures meant to rejuvenate the economy that the government had announced in its 2003 budget were backfiring even before the budget had come into effect, the government quietly invited members of the Tripartite Negotiating Forum to resume talks.

The biggest blow, it appeared, was the backfiring of measures meant to boost the country’s foreign currency reserves which saw the government closing bureaus de change and forcing companies to remit all the foreign currency to the Reserve Bank of Zimbabwe though half would be held on their behalf. The closure of the bureaus failed to stem the black market while inflows of foreign currency into the central bank fell dramatically from over US$10 million a week to a paltry US$0.5 million on December 27. The government could not even support its agrarian reform programme, providing only $12.5 billion when $60 billion was required.

ZCTU secretary general, Wellington Chibhebhe said the labour movement had written the government on four different occasions between July and December last year trying to get back onto the negotiating table, but had not received any response. The government finally gave in in December and since then, tripartite talks have been going on in earnest. The first major breakthrough was the signing of the Prices and Incomes Stabilisation Protocol on January 30, followed by the unveiling of new measures to encourage exports announced by Finance Minister Herbert Murerwa this month. The protocol was both a political and economic statement. It said the three social partners who had agreed on the protocol for the recovery and sustainable socio-economic development of the country would be guided by a set of agreed principles. These included cultivating a culture of tolerance and restraint; sharing a common vision about the future development of the country; negotiating in good faith and ensuring that the partners were accountable to each other. The partners were also to subordinate sectoral interests to national interests; promote a mutually beneficial environment which should result in a win-win situation; adopt a flexible approach which would allow for adjustment to cater for new and unforeseen developments. They also agreed to uphold measures aimed at eradicating poverty and ensure strict confidentiality of issues under negotiation.

The parties agreed to manage the prices of all goods and services produced in the country, particularly those of basic items such as maize meal, cooking oil, salt, milk, sugar, bread, flour, beef, paraffin, sanitary pads, rentals, rates, water charges and transport fares. They agreed that prices would, however, take into consideration issues of affordability and business viability. They also agreed on the management of wage and salary increments. But contrary to reports which gave the impression that there had been a wage and salary freeze, the protocol clearly states that workers and employers should negotiate wage and salary increments but should conclude their collective bargaining agreements (CBAs) by February 28. Those who fail to agree should refer their cases to the Wages and Salaries Advisory Board for arbitration.

The government wanted a wage and salary freeze but the ZCTU wanted a review of the minimum wages agreed to in 2001. Chibhebhe said the majority of the 49 national employment councils had already concluded their collective bargaining agreements. The agreement to freeze wages and salaries between March and June, was therefore a major victory for the labour movement, as wages would only be frozen for four months giving workers a chance to review the situation thereafter. In the past workers have been shortchanged as the government and employers have tended to wipe out all the gains made by workers by increasing prices immediately after the national employment councils had concluded their CBAs.

Under the protocol each of the three partners was given specific tasks to perform which allows for a review of the whole exercise after four months. The government was given the highest number of tasks. It was tasked with reducing the budget deficit to 11 percent of Gross Domestic Product by the end of the year. It has to reduce inflation to 96 percent and implement policies and measures that allow viability and competitiveness to exporters and importers. The government should also ensure that the Reserve Bank puts in place measures that ensure a full account of all foreign exchange in the economy. It should enhance tax collection through the implementation of the value added tax system and tighten public sector finance management. The government should also address the fuel and urban transport problem and facilitate the importation of spares. It should harmonise and expedite measures to promote employee share ownership plans (ESOPs). It should also continually review tax incentives that boost disposable incomes and take cognisance of the poverty datum line. It should expedite registration of collective bargaining agreements and rejuvenate the Competition and Tariff Commission to make it visible and effective. The government should actively promote industrial peace and harmony and help in the setting up of the National Productivity Centre and the publication of the Empowerment Charter. It should also expedite civil service reform and institutionalise performance management and productivity and expedite the implementation of agreed positions reached by the various TNF committees. There are 13 subcommittees of the TNF including one on anti-corruption and another on public confidence and image promotion.

Business was tasked with coming up with a Charter to police, monitor and ensure compliance to price management and to promote corporate responsibility towards payment of tax and remittance of foreign currency to the Reserve Bank. It should supply goods and services at affordable and competitive prices and should actively promote increased productivity, regional and international competitiveness. It should retrench workers as a last resort and should facilitate the re-entry of retrenchees into the labour market. It should also promote fair business and pricing policies and support sustainable agrarian reform through private sector initiatives. It should also be actively involved in economic transformation, including empowerment initiatives and should inculcate a culture of exporting and diversifying export markets, and should promote industrial peace and harmony.

Labour was given the least tasks. It has to promote industrial peace and harmony, productivity, and worker empowerment initiatives such as ESOPs and indigenisation of the economy. It should also support agrarian reform and ensure that the interests of farm workers are adequately catered for. The TNF had to urgently develop an Empowerment Charter with sectoral schedules for indigenisation. It should establish a tripartite taskforce to study good experiences on indigenisation of the economy in the region and elsewhere. It should recommend viable agricultural producer prices and reactivate the fuel subcommittee to address the issues of fuel procurement and pricing. It also had to establish a subcommittee to look into electricity, water and coal tariffs. The TNF would also recommend divestiture of public assets on the basis of the Empowerment Charter, audit the civil service performance programme and review performance targets of parastatals, and negotiate the poverty datum levels linked to minimum wages.

But that was not all. Closely linked to the prices and incomes stabilisation protocol was the Kadoma Declaration which set the framework on how the country could regain its credibility. The declaration was agreed to in January 2000, well before the referendum on the new national constitution whose rejection triggered an onslaught on the opposition and anyone believed to be against the Mugabe administration, but had not been signed up to now.

Under the Kadoma Declaration the TNF recognised that it could not solve the country’s economic problems without looking at the country risk factor which it defined as the “premium that is attached by nationals, residents, foreigners and international bodies on residing in, visiting and doing business with a particular country”. It said that elements of risk included low confidence and pride in one’s country; lack of patriotism; lack of trust in institutional systems; failure of the nation to supply basic human needs; lack of social cohesion; real or perceived selective observance of the rule of law; insecurity; and real or perceived lack of political tolerance.

The causes of these risk factors in Zimbabwe were the failure by some institutions of governance to function effectively and the mismatch between policy and action or the delay in policy implementation. Other causes were the overall spread of wealth in the country and continued racial imbalance in the ownership of the means of production; irresponsible utterances by politicians; lack of political tolerance; corruption; contradictory statements by and among social partners (TNF); external interference in the country’s affairs; the activities of civil groups and pressure groups as forces affecting governance; and lack of respect for human rights in the world of work and society in general.

These risks had a negative impact on the economy because they prolonged economic depression. They were also responsible for the skewed macro-economic fundamentals and hyperinflation; low savings and domestic investments; capital flight and reduction in foreign direct investment and donor support; drying up of credit lines; de-industrialisation; reduction in capacity utilisation; high unemployment and under-employment; brain drain; premiums on doing business with the outside world; and depreciation of human resources.

The risks had resulted in an increase in poverty with 75 percent of the population classified as poor. Poverty had in turn resulted in an increase in crime and a widening of the gap between the rich and the poor, making it easier for the poor to be corruptible and the rich to be more corruptive. It had also led to an increase in prostitution by younger people exposing them to HIV and AIDS. As a result the number of people infected with HIV/AIDS had shot up from one in four to one in three in just three years. The declaration also said that because of the country risk factor, Zimbabweans were discriminated against when trying to make commercial transactions abroad because many countries in the world perceived Zimbabwe and its people in very poor light. Zimbabweans were therefore ill-treated and abused at various immigration points in some countries.

The declaration offered solutions and the way forward on the 10 risks it identified with each TNF partner being given specific tasks. The factors were: politicisation and failure of the institutions of governance; mismatch between policy and action; delay in policy implementation; the overall spread of wealth in the country and continued racial imbalance in the ownership of the means of production; activities of civil and pressure groups as forces affecting governance in local authorities, communities, commercial farming, mining and industrial relations; lack of political tolerance in regard to election related violence and the use of inflammatory language and demonisation.

Other factors addressed were corruption in the public and private sectors including society at large including transfer pricing, black market activities, customs, immigration, awarding of tenders, police, issue of licences, allocation of public resources, price monitoring, privatisation, education and tourism; contradictory statements by and among social partners; unstable macro-economic fundamentals including hyper inflation, poor export performance, exchange rate distortions, high unemployment, negative growth, increasing poverty and external payment arrears; and lastly, bad country image.

To deal with the issue of politicisation and failure of governance the government was tasked with ensuring the rule of law. It was urged to depoliticise institutions of governance and work places. There was to be no selling of political party cards in government offices and no collection of money for political parties at government offices. Civil servants should not be allowed to wear party regalia at work places. The same rules applied to the business sector and the labour force.

Each of the three partners was urged to commit itself to implement its own policies and any other agreed policy to stop the mismatch between policy and action while the government was called upon to timeously implement policies. Business and labour were urged to agitate for policy implementation.

The government was urged to democratise the economic landscape by implementing deliberate policies of social equity and empowerment in a legal, transparent and systematic way while business was called upon to exploit business opportunities in land redistribution and indigenisation to facilitate economic empowerment. Labour had to identify empowerment opportunities and promote the empowerment of its members.

The government was called upon to ensure that civil and pressure groups do not usurp the powers of constitutional and statutory institutions of governance, but at the same time it was urged to desist from any action that increased prospects for violence. It had to ensure timeous resolution of disputes and engender good industrial relations including trade union rights. Employers and labour were also urged to ensure good industrial relations and to desist from any actions that might increase prospects for violence.

The government was urged to ensure free and fair elections and to urge political party leaders to speak against violence and to stop demonising each other. It was urged to apply the law on all those who incited and perpetrated violence while business and labour were urged to promote political tolerance in the workplace and trade union structures with business being urged to depoliticise business organisation structures and contribute to free and fair elections.

On corruption, government was called upon to prevent and fight corruption, make the civil service professional and better paid, and black list givers and receivers in a clear data base. It was urged to empower the National Economic Conduct Inspectorate and other such agencies to deal with e-commerce corruption and enforce the Prevention of Corruption Act. Punishment for those found to be corrupt had to be more severe. Business and labour were also urged to prevent and fight corruption and to report corruption to the relevant authorities.

All three partners were urged to speak with a single voice on agreed issues of national importance with the government being urged to enunciate clear, consistent policies and apply them uniformly. The government was also called upon to prioritise issues of macro-economic stabilisation, comply with budgetary limits and timeously implement an agreed macro-economic stabilisation programme. Business and labour were urged to support any agreed programmes.

To address the country’s bad image problem, government was urged to ensure good governance while business and labour had to promote good corporate governance.

While the social partners seemed determined to turn around the country’s economy, only one thing stands in the way – politics. Former governor of the Reserve Bank Kombo Moyana said the country had never been short of brains. Its human resources were among the best in the region, but there had been lack of a “shared national economic and social vision”.

The signing of the two protocols could signal a significant change. After all the sub-title of the Kadoma Declaration is: “Towards a shared national economic and social vision.” Besides, the biggest problem so far has been lack of government commitment. It appears this time, the government has little choice. At the TNF meeting of January 23 for example, there were seven key government ministers -July Moyo, Joseph Made, Witness Mangwende, Herbert Murerwa, Samuel Mumbengegwi, Paul Mangwana and Francis Nhema. There were also five permanent secretaries, 17 other senior government officials of director level and above, and two representatives of the central bank. Business had 14 representatives while labour only had eight.

As Chibhebhe said, this time, it is serious national business, no party politics. “We have made it clear to the government that we do not want to talk ZANU-PF politics in our meetings. We want to discuss national issues,” he said.

Asked whether there was no conflict in the present stance of the ZCTU, especially since it gave birth to the MDC, Chibhebhe said: “The ZCTU is not the MDC. The fact that we facilitated the formation of the MDC does not mean we are MDC. The MDC is in parliament together with ZANU-PF, they can talk to each other. Our role is to negotiate for workers at national level, we therefore have to negotiate with the government.”

Though the media seems to be engrossed in fanning past squabbles of the three social partners, the TNF is quietly forging ahead. Prophets of doom could be in for a big surprise. And June is not too far to assess how serious the partners are.

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