EDITORIAL COMMENT: Special Economic Zones progressive

herald-newspapersZIMBABWE needs more businesses, more jobs, more exports and more investments to create these things. At the same time we have a number of social and economic policies and priorities: we protect workforces from gross exploitation; we want Zimbabwean businesses to be owned by Zimbabweans; we want our natural resources to be used by Zimbabweans.

And then we have a number of social and economic problems: Our savings rates are low; a significant percentage of our best-educated and most skilled people have to work outside the country because there are no suitable jobs for them here and we are competing in some areas for investment from those who want to be in Southern Africa, but are not that worried about which country.

All these desires, pressures and problems make the concept of special economic zones very attractive, but only if they are the right sort of special zones. A wrong zone would be a huge retail centre on the edge of Harare paying low taxes and poor wages and shifting all the profits outside the country.

Zimbabwe can do this sort of thing on its own, or through existing laws. There is no need to destroy something we have to make someone else richer.

On the other had we can imagine a major transnational bank wanting a central data-processing and transaction processing centre somewhere in Southern Africa.

A decent climate, an educated and English-speaking workforce, adequate infrastructure and a good range of local businesses who can supply everything from canteen services to some esoteric technical support all make Zimbabwe an attractive possibility for that investor.

But the investor might well want a guaranteed and fair tax rate for several years, exemption from indigenisation requirements for the core business, a guarantee that they can bring in at least a small number of staff, and some flexibility on labour matters.

Here there is no possibility of a local business being pushed out; the whole point is that it would be the regional outpost of an international business.

There are no mineral or agricultural resources being exploited by outsiders. Skilled Zimbabweans would be able to get a decent job at home instead of having to emigrate.

Zimbabwean businesses could grow selling services and goods to the investor. So long as there are some taxes, and a core of fairness retained in labour laws, such an investment would seem a sensible candidate for special treatment.

Between these extremes are other businesses. Diamond cutting has been suggested. Zimbabwe has a lot of diamonds but few are sold internally.

They have to be sold into a global market and that market has processing centres, a handful, around the world.

Adding one more, in Zimbabwe, would seem to require special treatment, perhaps not as much as a bank wanting a regional data centre, but more than others.

So long as we think carefully, are open to good ideas, and keep in mind the short-term and long-term benefits to our people, then we are sure we can draft some very sensible rules and regulations for special economic zones.

We also need to remember that these zones can also be the crucible for experiment.

The Chinese used these zones to test ideas that developed into their economic miracle; those that worked were allowed out of the zones into the general economy, while those that failed did little damage. We can do the same.

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