Zimbabwe July 2005 |
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| Open letter to RBZ Governor, (The Herald Online, 2005-07-20):-Dear Mr Governor, - I am a citizen of Zimbabwe. I left the country in 1992 and continue to Ii' in the Diaspora earning a living and at the same time helping my extended family back in Zimbabwe. Many people known to me spoke highly of you at the time of your appointment to the office of Governor of the Reserve Bank of Zimbabwe (RBZ), Dr Gideon Gono. I am neither an economist nor a politician. The purpose of this letter is to inform you on how many others and I in the Diaspora have been affected by some of your policies. I hope I will be able to recommend a solution to the problems we are facing in our efforts to help our families back home. It is important that I point out that I do not belong to any political or economic organisation, except for membership of my bank and two golf clubs. I am not writing on behalf of any of these institutions but on my own behalf. I have been motivated to write this letter to you by my sense of patriotism. My father and his comrades who are in power today sacrificed all they had and took far more dangerous risks for the good of us all and in that same spirit I hope my letter to you will be taken as an expression of my concern for our economy. I have been watching developments back home with keen interest, but I just can no longer watch from afar and remain silent knowing that my brothers, sisters and parents need my assistance today more than they did three years ago, yet the system does not allow me to discharge my duties. I am hoping that my suggestions can and shall be considered with all seriousness by people in positions of authority like you. You see Mr Governor, throughout the decade plus, I spent outside Zimbabwe, I have been sharing my earnings with my folks residing in Zimbabwe and everything seemed to have been working very well. However, I seem to be having very serious problems continuing to do so because I can no longer use the legal channels I employed in the past years. This is mainly because the exchange rate you have stipulated tends to take half the value of the money I work so hard to get out here. I will also mention that I have lived in many countries since I left Zimbabwe. I have met many Zimbabweans of different religions and political persuasions who all agree on one thing; sending money home to help those we left behind. I am yet to meet a Zimbabwean who is not similarly inclined. I am fully aware that there are many shortages in Zimbabwe and my interest is in addressing the shortage of foreign currency which I think if sufficiently dealt with could also alleviate all other shortages. If statistics on Zimbabweans living abroad that we have seen in the public domain are correct, then as many as four million Zimbabweans live and work outside their country of birth. It is rather bizarre that these people are incapable of remitting enough foreign currency to sustain our economy. I am confident that my desire to send money to my loved ones makes me a typical Zimbabwean in the Diaspora. Imagine Mr Governor, if all of us out here send US$1 00 per month each person, this would give the economy a reliable monthly injection ofUS$400 million per month and a mere doubling of this per person would shoot up to US$800 million/month. If this is not enough to revive the economy, then I do not know what is. I fully understand why the central bank would like to kill the illegal parallel market, which is collecting almost all the money remitted to Zimbabwe. Though you have made concerted efforts to kill this clandestine market, I am sure you are now convinced that you will not be able to divorce the Diaspora from this underground market with what you are giving and doing. The effort you are putting into this is utterly remarkable but it is not smart at all, and will certainly fail to bear the fruits you are expecting. Let me back up a little, so we can be on the same page. In the past years, my wife and I have been sending money through the bank, Western Union and the Post Office. I don't quite remember when we stopped this but I remember resuming it a few weeks after you were appointed Central Bank governor. The resumption was a direct reaction to a fair and market exchange rate you had introduced at the time. This, however, came to an abrupt end within a month or so mainly because the system again had failed to keep pace with the fast-moving events and resorted to taking more than half of the value of my money. This Mr Governor does not make sense even if one were Mother Theresa. Mr Governor, I am yet to meet a Zimbabwean who enjoys dealing with those operating on the illicit parallel market, in fact the converse is true. People in the Diaspora do not support the existence of the parallel market. No they don't; in fact, people out here are looking for ways they can help their relatives and the Government out of the present socio-economic crisis. Every Zimbabwean I have met thinks we are the African country where success is as inevitable as sunrise and we are relentlessly irritated by people from other countries who celebrate the purported economic melt down in our country. By now you may be getting impatient with me wondering what the solution is? The solution, Mr Governor, is very simple. In the present and near future, the solution to the Zimbabwean crisis does lie in international aid but squarely on our shoulders as Zimbabweans living abroad. The symbiotic relationship between us here and the families we left behind is unavoidable, and the central bank can exploit this relationship for our mutual benefit. There are some Zimbabweans here who subscribe to the notion that allowing our families to receive the money we send in foreign currency is the solution but I am of a different school of thought. The solution is to allow the banks, Western Union, Homelink and all legal entities to compete on what is a fair exchange rate for the hard currency we send. I strongly believe that our folks should receive the market value of the money we send in local currency. In the process, we let the central bank collect every cent of the hard currency we send through fiscal mechanisms that you are more competent to talk about. Mr Governor, this sounds very simple and yet that simplicity is the solution. If you allow these legal financial institutions to pay the market value for our hard-earned hard currency, you will certainly be surprised by how much money we will send to you. And more so, Mr Governor, this alone will deal a fatal blow and see a sudden collapse of the illegitimate parallel market literally over night. I am certain that you remember the "good old days" of the early to mid 1990s, when one could change their hard currency in the bank at market rate. During that period, everyone in the Diaspora sent money through the banks and not even Western Union, and our year to year inflation in 1996 or 1997 had come down to a mere 14 percent with projections of single digit inflation in sight. The fear that the Zimbabwean dollar will spiral downwards into an abyss, thus, worsening the situation might be fallacious. Yes, the Zimbabwean dollar may slide initially, as people will be trying to figure out if the move is genuine, but once established, the inflow of the currency will stabilise our domestic currency again, and perhaps even strengthen it. I have no doubt Mr Governor that you are thinking that I have little, if any, comprehension of the complexities you have to deal with. But Sir, with due respect, you have very, very limited options especially if you are keen to register a semblance of reviving the economy. I will, however, offer one more option: that of trying my solution for a month and if it does not work, you can always revert to the present scenario, of which I am certain you will not. As I mentioned before Mr Governor, I am not a student of economics but only a citizen looking for ways that my fellow compatriots and I can employ to curb a deterioration of the present economic crisis. My solution does not compromise any of the variables in question and yet it is a winner for everyone. In the event that my proposed solution is not feasible, I beg you Mr Governor to please reply in this column explaining why this will fail. This will help both those at home and those abroad to learn why it makes sense for us abroad to inadvertently donate as much as US$400 million (hal f of our remittance) to some unknown cause. I look forward to hearing from you, Mr Governor. Yours Sincerely, Pasipamire Makaza,Manhattan, New York, USA. | |
South African Migration Project (SAMP) - Queen's University - http://www.queensu.ca/samp |