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Address by Prof. Arthur G.O. Mutambara at the ZITF International Business Conference on the significance of building a new value system for sustainable development in the future of Zimbabwe
Deputy Prime Minister Arthur G.O. Mutambara
April 28, 2013

The import of the topic before us must be understood. We are discussing the importance and impact of identifying, designing and adopting national winning and empowering beliefs and ethos that will allow us to improve the social, political and economic status of our nation without endangering the environment or negatively impacting the future of our country. Sustainable development means pursuing economic activities that meet the needs of present citizens of Zimbabwe without compromising the ability of future generations to meet their own needs. In doing this, it cannot be business as usual. Zimbabweans have to be motivated to do things differently. In terms of values, we must acknowledge both our national achievements and our failures, and then seek to take corrective measures while reinforcing our strengths. This is what this topic entails.

A “value” is what is considered to be of importance in life, what makes life worth living. A value is also something that helps people decide what is right or wrong; what motivates and drives a citizen. Characteristics of a value include that it is very important, guides our activities, is applicable to a wider community, and that it is universal and enduring. Our values separate us from others, by defining who we are. They constitute ethos that one holds dearly, that which influence one’s actions. Put differently, a value is a universal eternal truth that guides both our behaviour and actions while giving us identity. Good values lead to winning behaviors, which in turn drive social and economic prosperity. National values are important as lasting beliefs or ideals shared by citizens about what is good or bad, desirable or undesirable. A value system is a set of consistent values and measures which forms the basis for action while defining and determining success. When values and principles are organized and adopted as collective and universal to a group, community or citizenry, in a manner that defines a way of life, this then defines a shared value system. This is the foundation of a shared national vision; a collective aspired-to social, political, and economic destination. In order to achieve sustainable development, Zimbabwe needs both a shared value system and a shared national vision.

There are three areas where we will explore the development and adoption of new values. The first is the social and political arena, followed by the field of economic values. Thereafter, we will attend to the new values that allow us to effectively engage globalization and the ICT revolution. Politically, we have just adopted a new national constitution, which lays the legal foundation for sustainable development rooted in the rule of law. While this is a major achievement, it must be emphasized that the constitution itself is just a piece of paper. It does not compel or force anyone to obey or respect it. We need to build and develop the culture, tradition and behavior of respecting the constitution. This is the value we call constitutionalism. We need a new value system that puts constitutionalism at the center of our thoughts and actions. It is instructive to note that the outgoing constitution which we are retiring did not provide for violence, corruption and rigging of elections. However, these vices and shenanigans occurred in our country, which means in addition to good rules and laws, we need good values, and the corresponding value system. Furthermore, we need to embrace peace, fairness, respect, equity, integrity, equality, democracy, political tolerance, the dignity of difference, and view diversity as strength.

Unfortunately, all these values cannot be legislated or declared by proclamation. They require civic education, social mobilization, socialization, and leading by example. All this must be complemented and enabled by transformational leadership, innovative institutions and learning organizations. Obviously, such development and adoption of values and the corresponding value system will take time, but the journey must start today. The Government of Zimbabwe, itself, must promote, espouse and be an embodiment of values that promote economic development. In particular, it has a duty and obligation to create an enabling economic environment and conducive business climate. There is need for certainty, predictability, policy consistency, respect for the rule of law, and provision of an enabling policy framework that fosters and enhances sustainable development in Zimbabwe.

In addition to learning from other nations we must look within ourselves for insights on values. Our African cultures, traditional practices, indigenous knowledge systems are excellent repositories of lessons. For example, the Ubuntu (unhu) value framework with its various and variegated slogans; I am because we are. We are because I am. I am because you are. You are because I am; is a good starting point. The essence and spirit is that a person is not successful until their entire community is prosperous. Similarly, a group cannot claim achievement when there are some individuals walloping in poverty. The emphasis is on collective success and not individual greatness accomplished at the expense of shared achievement. Surely, this African wisdom can be leveraged and employed in developing both corporate business strategies and national economic models. Zimbabweans must look within themselves for intellectual empowerment.

In terms of the economic aspects of the new value system, Zimbabweans must embrace entrepreneurship and innovation. We have too many workers and large numbers of people who are trained to be employed. Let us nurture and develop more job creators and builders of companies. Let us teach entrepreneurship and innovation in our schools and universities. Our society must acknowledge, respect and recognize outstanding entrepreneurs. Under the new global economy, talent and innovation are more important than cash. Hence, a human capital development culture is key. In particular, we must move from being producers of raw materials to selling refined products. This means Zimbabwean companies must move up the regional and global value chains. In other words, we must adopt beneficiation and value addition as economic values.

It is important to note that it is not in the interest of the rich North, Western or Eastern economic powers to promote beneficiation in Africa. Their preference is for Africa to produce and sell raw materials while they sell refined goods to Africa. Beneficiation will happen in spite of these rich nations. Africa is on its own with respect to the value addition agenda. In fact, the economically strong will disincentivize Africa from value addition. Moreover, we must understand why value addition has not occurred, and is not happening, in Africa in general and in Zimbabwe in particular. For over fifty years Africans have talked about value addition. Why have they not walked the talk? The reasons include the following; pursuit of “easier” trade options; quick buck for corrupt regimes or officials; lack of a clear Industrialization strategy; absence of the enabling and facilitative framework, unfair trade; and worshipping the false anti-protectionism gospel. The following must be done to drive beneficiation;- resolve the identified barriers; adopt a value addition driven national vision, strategy, and industrial development plan; delayed gratification, long term planning; timeline and planning; new technology, new human capital, new capital; new infrastructure, and new mindset. The need for a new mindset with respect to value addition applies across the board. The Zimbabwean investor, proprietor, the manager and the engineer must have self-belief and confidence that a Zimbabwean company can produce value added products and compete on the global market. The consumer must believe in, and buy locally manufactured goods. Made in Mbare, made in Dotito, made in Chimanimani, or made in Tsholotsho must not be sources of scorn derived from preconceived perceptions of poor quality. We must have the national consciousness and pride to consume our own products from value addition activities in Agriculture (agro-processing), the textile industry, mining (refining, processing, up to manufacturing), ICT sector, and the broader manufacturing sector.

However, beneficiation cannot be achieved by a business as usual industrial mindset. It requires the development of backward and forward industrial linkages to the commodity sector, which linkages, in turn, allow movement up the regional and global value chains (GVC). This way, Zimbabwe can maximize direct and indirect job-creation effects, while growing the economy and driving industrialization. Lessons from other emerging economies that are embracing value addition are instructive. Provided their resource-processing industries are internationally competitive and well integrated in GVCs, exporting countries can move into higher-rent value-chain links and extract the benefits of moving up value chains. For instance, up to 90 per cent of the total income from coffee, calculated as the average retail price of a pound of roasted and ground coffee, goes to consuming countries. This presents an opportunity that can be seized to improve incomes in the source countries if they pursue beneficiation.

Forward integration confers other benefits. It can reduce the exposure of countries producing primary commodities to price fluctuations and thus yield dynamic skills-migration and cluster benefits of linkage development. By developing backward linkage supply firms to the commodity sectors and resource-processing industries, Zimbabwe can help to diversify its technological capabilities and skills base, deepening their industrial structure. Moreover, the natural resource sector’s need for infrastructure, to extract and transport the commodities, enhances the potential for linkages. Linkage development creates an opportunity to maximize positive externalities derived from clusters. Supplier and resource-processing industries’ closeness to the extraction location generates agglomeration effects. Efficiency gains for firms in clusters include gaining access to a pool of specialist labour and networks of suppliers.

African people and Zimbabweans, in particular, must have the self confidence that their refined products are as good (if not better) as any in the global market. Even if the quality is not as good as the foreign alternatives, national pride and self-belief must drive us to buy these products and sustain our economy. That is the story of Japan, Malaysia, China and the USA. In fact in the early fifties some of the Japanese brands; Sony, Nissan, Toyota and Toshiba were derided for poor quality. However, the Japanese consumer stood by their poor products and bought them, while their innovators and industrialists improved the quality of the products. Today the Japanese brands are the respected and sort after in the world. The general USA car brands are not the most respected, durable or preferred globally, but the US citizens, government and institutions predominantly buy American cars. You will never see a US government official in a Mercedes Benz, BMW, Lexus, Jaguar, or Rolls Royce; even when they are outside the USA. If the US president was to use any of these European and Japanese cars he will probably be prosecuted, convicted and subsequently executed.

Contrary to conventional wisdom protectionism is not necessarily without merit. In order to effectively pursue value addition, Zimbabweans must initially adopt a value system that embraces smart and innovative protectionism. As long as there are strategic plans, timelines with key milestones, and an exit strategy; the protection and incubation of chosen industries has efficacy. What is critical is nurturing and growing the manufacturing industries for a limited and defined time frame. When they are matured and can openly compete, they can then be unleashed unto the global market, without any further handholding. This is structured and smart protectionism, NOT blanket protectionism which is clearly unsustainable. In fact most of the countries that have industrialized, have engaged such clever protectionism. Short-term protectionism rooted in strategy, plans, & timelines might be necessary. All industrialized countries engaged some degree of protectionism in their journey to industrialization. Africans must disregard conventional wisdom and the Washington consensus on this subject.

Furthermore on economic matters, Zimbabweans must adopt a value system that interrogates the nature and quality of economic growth. We must seek economic growth which is Strong, Shared, Sustainable, Green (low carbon), Global (make sense in the region), and produces better quality of life for our people. We must measure what is called the Global Happiness Index (GHI) and Planet Happiness Index (PHI). The latter is critical because there is need for climate change mitigation and adaption, while preservation of the environment is now central. You can have a plan B, but unfortunately there is no Planet B.

Another new economic value we must embrace is with respect to gender. Empowerment of women and equality of the sexes is more than a discourse on human rights. It is not just about morality and righting the wrong of the past. It is all about economics. Women constitute more than 52% of the population. Moreover, new studies find that female managers outshine their male counterparts in almost every measure. Women have special skills, that men are weak in, such as multi-tasking, caring and nurturing, meticulousness and thoroughness, service excellence, quality and aesthetics, sensitivity, high emotional intelligence (EQ), and high cultural intelligence (CQ). Men and women bring different skills and strengths to an organization. There is, therefore, need to leverage and unlock value from the differences between men and women. Diversity is a virtue, if it is creatively embraced and leveraged. Hence, when women are empowered in terms of ownership, leadership, and management, the institution is not doing women favours. Rather, the organization is doing itself a favour because the institution will obtain better results, such as productivity and profitability. This is the new bold world of Womenomics, that is, the economy as enabled, driven and experienced by women. Zimbabweans must adopt this new value system that views diversity, in particular women empowerment, as a major strength. We must embrace the empowerment of women because; it makes business sense; there is an economic value proposition, increased GDP & per capita income, improved productivity, increased profitability and better performance. Clearly, empowering women is smart economics, and empowering girls is smarter economics.

Another paradigm shift we must pursue in our economic values should be in what motivates business people, in particular investors. We need to move away from the traditional approach where the motivation is making money. Creative linkages between business opportunity and social impact must drive the new economic growth in Africa. Entrepreneurs and investors must identify a human need and seek to satisfy it. Cash will come as a by-product and not as the sole purpose or motivation. This must be done in a strategic framework that seeks to create shared value for business, the community and the environment. The notions of corporate social responsibility (CSR) and even corporate social investment (CSI) are now inadequate and obsolete. We must seek a strategic framework where the social and environment imperatives are embedded as part of corporate strategy with the motivation to create shared value (benefit) for business, society and the environment. In this way, sustainability is guaranteed by embedding it into the business model right from the beginning.

The mobile telephony narrative in Africa is an instructive and illustrative example of the paradigm of identifying human needs and then linking them to business opportunities. In 1994, 70% of Africans had never heard a telephone ring, not to mention use a telecommunication device. That was a human need which was negatively affecting African societies and undermining economic development. Mobile telephony companies came in to address the need. Today, 70% of Africans have access to some form of telecommunications. The cellphone companies that answered that need such as MTN, Econet, Telecel, and Vodacom have made tonnes of cash as a by-product. Another example comes from the area of financial and banking services. About 80% of our people in Africa, and in Zimbabwe specifically, have no access to brick and mortar financial and banking facilities. The footprint of the physical bank branch networks is limited. Yet, access to financial and banking services is a key enabler of social and economic development. Clearly, this is an economic and human need. Once again creative entrepreneurs such as EcoCash in Zimbabwe and M-Pesa in Kenya have come in to satisfy the need. Naturally, they are making a lot of money while enabling socio-economic development in the countries they operate in. Four weeks ago, EcoCash launched a virtual debit card into the market, a first in the whole world! This is the innovative spirit that should define the new economic value system in Zimbabwe. What we need to do is identify social and economic needs in all the sectors such as water, energy, sanitation, health, environment, transportation, agriculture and food security, and link these to business opportunities. That’s a paradigm shift in values.

In all these initiatives, Zimbabweans must start measuring different economic metrics. The traditional parameters such as GDP and GDP growth rate are highly inadequate. We must clearly track per capita income, gini coefficient (measure of income inequality), economic productivity, productivity growth, nature of economic growth, per capita power, social and political issues, national values, and spirituality. We must measure the size of the middle class as a percentage of population, in addition to tracking ICT penetration, bandwidth, connectivity, ICT infrastructure, ICT cost and pricing, and ICT competition. These are the key measures to judge success or failure of the Zimbabwean economy. That which is monitored and evaluated, is what influences policy and strategy. We must be driven by this philosophy.

The last set of values that we attend to, are with respect to the importance of making globalization work for us as Zimbabweans, while making the most out of the new advances in science and technology, in particular the ICT revolution. Zimbabweans must say “we are Africans first before we are Zimbabweans.” We must embrace pan-Africanism as a core national value. Under globalization, the nation state is no longer a viable unit of analysis, neither is it the best platform for survival or socio-politico-economic prosperity. Regional and continental blocks such as EAC, COMESA, SADC, Magreb, ECOWAS, AU, EU, ASIANA, and NAFTA are better frameworks from which to engage globalization. Scale, market size, pooling of resources together and regional consensus improve bargaining power immensely. We need regional strategies and policies to effectively respond to global trends and investments. A collective approach toward investors and traders will improve the benefits derived by African countries. African countries must be discouraged from bilateral deals and arrangements with powerful economies such as China, India or the US. For example, the individual population and GDP metrics of Botswana, Zimbabwe, and even that of South Africa are not strong enough to individually negotiate with these big and rich nations. These African countries are bound to be short-changed. In fact, SA will only be a meaningful member of the BRICS if it is there representing SADC and Africa. SA’s metrics; compared to those of Brazil, Russia, India, and China; do NOT qualify it as a legitimate member of the BRICS. The collective GDPs and populations of SADC, COMESA, the FTA, and the AU will allow SA to have more leverage and clout in the BRICS, thus benefiting SA, the regions and the entire African continent. Consequently, the economic destiny of Zimbabwe, just like that of SA, resides in leveraging SADC, COMESA and the AU. This is the new thinking we must adopt.

In addition to the regional block approach, Zimbabweans must embrace a framework where African countries organize themselves into value addition industrial clusters, and engage the world through these. For example we can define a diamond cluster (Zimbabwe, SA, Botswana, Angola, DRC), a platinum cluster (Zimbabwe, SA), a cocoa cluster (Ghana, Ivory Coast, Guinea), and a petroleum cluster (Nigeria, Algeria, Senegal). With the scale, critical and consensus achieved in these clusters, value addition and beneficiation will be commercially viable on the African continent. The backward and forward linkages to drive beneficiation can then be effectively developed in pursuit of resource-based industrialization. African economies can this way move up global value chains, yielding employment, incomes, and economic growth. Beyond the regional block and the value addition cluster strategies, a continental approach must be pursued. There must be an Africa-wide strategy, AU and Nepad driven perspective. The collective GDP and overall population of Africa present an even stronger bargaining framework in the deals with the world. Continental policies, strategies and terms of reference must be developed. We must aspire to have negotiations with investors carried out at the level of the AU. That will be ultimate bargaining power derived from a holistic and complete African consensus rooted in the pooling together of all African economic assets and markets. To augment and operationalize this strategy, first class regional and continental infrastructure must be designed and constructed to facilitate integration, in particular, intra-Africa trade and investment. New funding models must be structured to finance these regional and continental projects.

Our national value system must surely include strong and unwavering belief in regional economic frameworks, African solidarity, and economic pan-Africanism rooted in technology, entrepreneurship, innovation, empowerment, indigenization, and resource nationalism. One area that clearly requires Africa-wide consensus is reform of the continent’s laws governing natural resources, in particular oil, gas and mineral laws. Most of these laws are colonial and apartheid provisions that do not ascribe any intrinsic value to the un-mined asset. Resource claims are given to the investor for free or for a nominal fee. The investors then go and list these assets on foreign stock exchanges and borrow billions against the claims. This is criminal. At independence African States changed political and social laws, NOT economic ones. Geological surveys and exploration must be carried out so that Africa’s complete mineralization and quantification thereof are established. Fair value must be assigned to the un-mined resource, where this wealth belongs to ordinary citizens. Discovery of a natural resource in a country by an explorer or investor should not translate to ownership of the asset. The investor must pay up-front for this value of the resource still underground, leading to the establishment of sovereign wealth funds (SWF). Only this way can the generality of African people benefit from the continent’s abundant natural resources. African consensus on these new natural resource laws will mitigate against the foreign investor, Eastern or Western, from playing one African country against the other. It is instructive to observe that Western countries such as Norway, Canada and Australia have actually implemented similar SWF based natural resource laws. What is good for the goose is good for the gander. This is what should inform the new value system.

The imperatives of globalization demand that we have a value system that acknowledges and appreciates the role of the Zimbabwean Diaspora. Just as demonstrated by countries such as India, China, Israel, Ghana, Ethiopia, Senegal and Rwanda; the Diaspora can be effective sources of remittances; trade, tourism, investment, advocacy; knowledge and nation building ideas. However there should be no taxation without representation! We as the resident citizens must put in place mechanisms and institutions that adequately address the concerns of the diaspora such as voting rights, multiple citizenship, and travel and national documents.

We must have a national culture that embraces advanced science and technology including nanotechnology, biotechnology, neuroscience, ICTs, cloud computing, big data, social media, crowd sourcing, robotics, and mechatronics. We should neither fear nor fight technology. Let us use technology and science to address our socio-political-economic challenges. The conventional wisdom that says the most advanced technology and science is for the developed world and that emerging economies must settle for older technologies is not valid. In fact sometimes the most advanced technologies are more relevant, easier to apply, and more profitable to deploy in developing countries than in the rich nations. This is because in the emerging economies, there are no infrastructure sunk costs and legacy constraints. Thus the lack of the lack of development, in particular infrastructure, becomes a unique opportunity to deploy new innovations. This means developing countries have a unique opportunity to leapfrog from 19th Century technologies to a 21st Century dispensation. In some cases these countries will have more advanced applications of new technologies than the most advanced economies, and actually act as sources of global best practice. The experiences and illustrative case studies of mobile telephony and mobile financial services are clear manifestation and demonstration of this new phenomenon. It is cheaper, easier, and more appropriate to deploy new innovations such as Wi-Fi, WiMAX and cloud computing in an environment where there is nonexistent telecommunications infrastructure (extensive wiring, hardware and storage). Big Data’s capacity to manage and analyze large amounts of information can be leveraged to handle geological and exploration data as Africans set out to quantify and attach financial value to all their un-mined natural resources.

Where technology presents potential dangers and risks, the solution is to devise mitigation plans and mechanisms. We should never drop the use of a new technology or fight it, because of fear of the unknown. With technological innovations, FDR the late US President was right; “the only thing we have to fear, is fear itself.” Technology is our friend, and not the enemy. Of course there are disruptive technologies which completely revolutionize products, sectors, and industries. Zimbabweans must embrace these with both hands, as part of creative destruction. The culture should be innovate or die. In order to expedite the adoption of new science and technology innovations, we must continuously update our laws and regulations. We cannot use old archaic laws to regulate the use of new innovations. For example, how can you use a 1973 Urban Council regulation to determine the use and efficacy of an LED advertising billboard screen driven by 2013 technology?

Obviously, the ICT revolution is not compatible with dictatorship, media control and thought manipulation. One has to use ICTs to promote their views. Information control and stifling are no longer sustainable under globalization and the ICT revolution. The Impact of a technology embracing culture is illustrated in the application of technology in Agriculture by AGRA; innovations in financial and banking sector by M-Pesa and EcoCash; application of Biotechnology in developing high yield seeds and fertilizers; use of robotics and automation in mining, agriculture and ports; the ICT enabled revolution in Educational platforms, content, and access; and innovations in Health delivery such as e-Health, remote surgery, and global access. In particular the impact of ICT is illustrated by the fact that an increase of cellphone penetration by 10% leads to Increase of GDP by 1%.

As we conclude, let us learn from the world on the significance of an empowering value system. When we look at successful economies part of their secret to success is rooted in a winning value system; Japan (innovation, hard work, planning, technology, consistency), China (hard work, long hours, discipline, focus, scale), USA (creativity, innovation, technology, research, competitiveness, enquiry) and Singapore (strategic thinking, planning, innovation, education). We must draw lessons about the significance of values from these countries, while appreciating that we already have a rich tradition of great values that we are nationally, regionally and globally known for, such as hard work, determination, perseverance, entrepreneurship, respect for history, national pride and self-determination. What is critical is to fortify and continue to leverage these values we already have, while expanding our national value system to embrace the new ethos fleshed out and articulated in this presentation. It is important that Zimbabweans build and adopt this new value system which will be the foundation of our unique Zimbabwean economic model anchored in a shared national vision, in pursuit of sustainable development.

Thank you

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