Donors can not rebuild the Economy

CANADA - TORONTO - The Global economic crisis has exposed the limitations of what the IMF and World Bank can do in times of real financial crisis.

The impact is such that any emerging economy in real need for economic assistance and revival has to re-think where it gets its funding and advice from.



The old adage that don’t mis-manage your economy to the point that the IMF and World Bank gets involved brings a whole new meaning to the chaos and crisis of today.



There have been various calls for reform of these institutions with China and the petro-dollar reach nations expected to bank roll the new monster institutions.



There are clear lessons and guiding trends for Zimbabwe and Africa in all this.



The most important lesson remains that don’t mis-manage your economy to the point that IMF and World Bank become your financial doctors.



Trends indicate that after decades of various economic structural programmes most African nations including Zimbabwe find themselves several steps back.



Whilst corruption and other faults maybe to blame it remains a challenge to identify a true success story in Africa driven by IMF and World Bank policies.



The success of any economic policy depends on a national “buy-in” of the policy. It can’t be imposed policy and expected to work miracles.



Policy must be developed with the Zimbabwe situation and circumstances in mind.



Zimbabwe is undergoing a very sensitive transitional phase both economically and politically.



A lot of hope has been placed resumption of donor aid, IMF, World Bank and other donors or sources of grant funds to finance the revival of the Zimbabwe Economy. This hope and anticipation may as well be misplaced.



The IMF and its related organizations have serious capacity issues now and are pre-occupied and re-inventing themselves to remain relevant in the age where they have come short and the Western Capital system has been forced to rely on Communist China to buy US Treasury bonds.



Sovereign Wealth Funds have demonstrated how they have replaced the World Bank and IMF as the lenders of last resort by bailing out some of the most respected Financial Institutions and playing a leading role in maintaining liquidity in the Global financial markets. Maybe Zimbabwe could change its focus from look “east” to “look Sovereign Wealth Funds”



The IMF and World Bank play a critical role is credit rating of nations and help create conducive business environment by their mere presence.



Beyond that the nation involved has to do all the hard lifting and the groundwork to create a solid economy. In short the recipient nation must have its own action plan, agenda and clear national course of direction.








An economy cannot recover just from Donors or from Aid. The donors and Aid can assist to avoid mass starvation and deaths but beyond that it’s not their purpose or responsibility.



Donor Agencies are designed to help the Economy of the Donating nation in as much as it may assist the recipient nation.



The key to a sound economic policy is drafting a economic national vision which takes into account the nation’s key resource - human capital.





Human capital plays such a central role that many nations which don’t possess any meaningful natural resources have managed to develop and dominate the world just because their human capital was properly harnessed and focused on achieving national economic independence and prosperity.



Zimbabwe due to the dramatic economic meltdown of the last 10 years has lost significant levels of human capital. In crafting a new National Economic vision there is need to identify where this human capital is and what or how much it will take to attract or re-attract this capital.



It is this human capital which will then help develop the necessary policies that can liberate Zimbabwe from donors, aid and any other forms of begging when the nation could easily be a Donor itself rather than a recipient.