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POLITICAL ECONOMY – CREATING EFFICIENCIES

By DARLINGTON CHILUBA

POLITICAL economy refers to the full range of deliberate actions taken to make the functioning of the state and country efficient and palatable at domestic, regional and international levels. It is the intentional interaction between politics and economy with the purpose of creating national wealth that benefits the country in whole (see Friedrich List, The National System of Political Economy 1841).

The state as custodian of all national wealth in its territory must, as a matter of duty, define policies that effectively and efficiently utilise those natural and other resources to the advantage of the nation. This entails developing national capacity at domestic level and importing those skills the nation lacks for a period until they are adapted and able to compete internationally (see James Mill, Elements of Political Economy 1844).  

Part of the lesson from political economy is that the relationship between politics and the economy must be flexible and predictable. National assets (or nationalised assets) are intended to ensure productive security so that the state is able to fund essential needs – from defence to welfare – and lessen dependency on other nations.

Privatised and commercial assets, while subjected to the tax regime, must equally advantage the host country through strategic trade policies. It is not a matter of ideology, per se, but a crucial matter of survival.  

Inevitably, some believe that for the nation to survive, the state must be in control of the economy and thus, the factors of production. China has recently made this argument appealing.

Others believe that survival is dependent on the state enabling its citizens to control some of the factors of production so that an internal co-dependence is established, but with the state being the ultimate authority. Western liberalism has thrived on this philosophy.  

For the idea of national survival to be entrenched in the country, each structure must be designed to communicate the same language. This is why we have statistics and measurable targets for national revenue, expenditure, inflation, exchange rates and currency supply, for example. This is all intentional to galvanise consensus and direction towards national development.  

Two relatable examples can amplify the point: when the one-party state was introduced in 1972, by extension, a command economy became the standard. Political decisions of the time, whether influenced by regional security or full employment through nationalisation translated into the type of economy Zambia became.

So, the political economy communicated strong proclivity towards nationalism and a controlled or managed commerce, the resultant inefficiencies of a closed economy notwithstanding.  

Conversely, when multipartyism and the free-market doctrine were introduced in 1991, the political economy or landscape tilted towards liberalisation without dispensing of, or undercutting the national identity. 

This time, the policy direction enabled the creation of a new competitive and open economy. In short, the three structures once again spoke the same language as directed by policy.  

In this regard, the inception of National Development Plans (NDPs) was intended to speak one language across structures and sectors. Successive NDPs adopted agriculture, mining, energy and retail as the prominent growth sectors.

Most of these contributed positively to economic growth after liberalisation as the state was concerned with enabling commerce than imposing restrictive regulation.

In the last 30 years, different administrations have chosen to add or redirect growth sectors so that Information and Communication Technology (ICT) and infrastructure were added to the list of growth sectors and continue to spur economic growth.

The only troubling disconnect between the NDPs as a tool for creating economic efficiencies is that out of 14 commissions in the constitution, there is none to oversee economic development.

There exist commissions for Correctional Services, Police, State Audit, Lands and so on, but none for economic activity oversight or growth.

 The absence of an end-to-end cycle of counter and intra system checks may cause more harm than good because an essential part of the system is disjointed. Commissions must not be treated as an afterthought because they form an integral part of the political economy of the country.

It might be time for the commissions to speak the language of the development plans, in addition to the existing oversight they provide, otherwise the thought of economic emancipation for Zambia may very well be relegated to a pipedream.

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