Zimbabwe: lots of graduates, not enough jobs. Need for trade liberalization is key issue in faltering economy
Every morning, Fainos Chokori arises at dawn, eats a bowl of maize mush, goes into town - and waits. Mr. Chokori waits for a job. Any job. He waits outside factories. He waits outside stores. This morning, he will wait under a tree near the front gate of a security firm until 6 p.m., then start again tomorrow. The reason: Since leaving high school three years ago, Chokori has not had a single job.
``Sometimes,'' he says softly, fingering a hole in his shoe, ``I wake up in the morning and feel like I have no future.''
Chokori is not alone. Indeed, the entrances to most factories in Harare's industrial zone are clogged with anxious, impatient people seeking work. Unemployment runs about 18 percent. By 1991, it is expected to hit 25 percent.
The problem is one that plagues many developing countries: a stagnating economy that cannot keep pace with a booming population. Only here in Africa's newest independent nation, the dilemma has been compounded since independence eight years ago by a huge increase in high-school graduates. In 1983 there were 20,000 ``school-leavers'' (high school and university graduates entering the job market); in 1991, that number will soar to about 300,000. And only about 12,000 new jobs are being created annually.
Thus, the country is swamped with educated, aspiring - but unemployed - young people. ``This is a time bomb,'' warns Samuel Gozo, a businessman. ``You can't expect hundreds of thousands of young boys and girls to loiter on the streets forever without eventually resorting to violence.''
Critics contend that despite the obvious danger, President Robert Mugabe, an avowed Marxist, has done little to revive the economy. They say that is because the remedy generally favored by world lending institutions - cutting the budget deficit, liberalizing trade, and opening up to foreign investment - is anathema to him.
But without such changes, economists and businessmen argue, Zimbabwe stands to go the way of most of sub-Saharan Africa, where, since 1979, per capita income has dropped an average of 7 percent per year. However, with the infrastructure, industrial base, and know-how President Mugabe inherited - surpassed in the area only by that of South Africa - the nation could avoid a similar scenario.
``We're at a crossroads,'' says Mervyn Ellis, an economist at Standard Chartered Merchant Bank. ``What we do about the economy is important not only here, but as an example to sub-Saharan Africa. A few steps in the right direction, and we could take off.''
While Mugabe may be Marxist, most of his Cabinet is not. The government is considering some conventional ways to revive the economy. Besides, many political analysts see Mugabe as the consummate politician, ultimately driven by pragmatics.
That clearly has been his style since taking over what once was white-ruled Rhodesia. Unlike his Soviet-backed buddies in nearby Angola and Mozambique, Mugabe pretty much left the economy here alone. Marxism seems confined to the proliferation of Soviet sports magazines found in book shops and the honorific ``comrade'' accorded officials.
Except for a couple of drought years, the economy grew phenomenally. But things began to fall apart in 1986. Some short-term payments on Zimbabwe's $2.8 billion foreign debt came due. And a serious drought coupled with low commodity prices caused exports to plummet. (Zimbabwe gets almost half its export earnings from agricultural products.)
Additionally, the country has had an almost negligible foreign investment because the terms for investors are uninviting.
The government is hurting for hard cash. So it has cut back on foreign currency allocations for imports - in some cases by 50 percent. Thus, Zimbabwe's output of goods and services essentially has not grown in two years.
The import scarcity has caused all sorts of distortions. There is a booming black market for autos: A two-year-old Ford subcompact, for instance, costs about $18,000 - triple the official price. Spare parts are almost nonexistent.
One solution is to increase exports. But that requires more hard currency than most Zimbabwe businesses can come up with. Ezekiel Mutasa would like his computer company to start exporting software. But he cannot get the cash needed to purchase the manufacturing equipment from abroad.
``If Zimbabwe ever is going to get out of this boom-bust cycle, it is going to have to stop depending on the weather and make some major economic adjustments,'' says a Western diplomat.
But this may be easier said than done. Privately, government technocrats say the country needs strict economic adjustment. But there are political implications that make many wary of such a move.
The World Bank is negotiating to lendZimbabwe $125 million to help finance agricultural and mining imports. One condition is that the country open its doors to more foreign trade.
Officials first want to study the effects of liberalizing trade. They worry that after years of being protected, local companies will be unable to compete. The managing director of an asbestos firm says his technology is 30 years behind that of the rest of the world. The only way he competes now is to cut his profit margins by as much as 50 percent.
The Bank also insists Zimbabwe halve its budget deficit over the next few years. A government economist says that would require paring subsidies now given to public-sector companies, which could mean more unemployment. It also would require reductions in education and military spending - respectively: the two biggest items in the 1987-1988 budget and Mugabe's chief concerns.
Despite reservations about going the World-Bank route, Mugabe is worried about his options. Later this year, the government will publish the second phase of a five-year economic plan and new investor guidelines. While many economists and businessmen question whether these guidelines will go far enough, a University of Zimbabwe political scientist has few doubts. ``Mugabe is the ultimate political animal,'' he says. ``He is acutely aware of social trends and adapts to the times. He knows what needs to be done.''