Diamond-backed civil service pay raise and the 'resource curse'

Jul 20, 2011

In many ways the debate and uncertainty over whether or not there would be a promised pay raise for Zimbabwe's civil servants has been a disgraceful show of how the Zimbabwean coalition government just doesn't work very well. But now that government workers have begun to receive their higher pay, many questions arise about whether the new find of diamonds is going to be a great benefit or a curse for the country.

It was ridiculous that the mines minister and the finance minister couldn't agree on whether or not money raised from Marange diamond auctions had reached the treasury. Their disagreement over this was loud and public, confusing the citizens and making neither minister nor the respective parties they represent look good. This acrimony over something that should be a huge positive for the country is perhaps one of the first inauspicious signs of how this new source of wealth may not bring 'happiness' to the country, political or otherwise.

MDC finance minister Tendai Biti said the country simply didn't have the money to afford a civil service pay raise. Diamond auctions under mines minister Obert Mpofu of ZANU-PF were not getting to his ministry; he didn't know what was going on. The country had a lot of external debts that need to be paid off; that is a pressing priority for how to spend any revenue, so that the country's creditworthiness can improve and new credit lines open up. And oh, he said, there are thousands of 'ghost workers' on the government payroll that must be cleaned up before there could be any talk of a pay raise.

Now that the pay rise has been effected, have all these points Biti raised against it been resolved? If so, how? If not, were they not so important after all? Was Biti merely 'politicking' by raising these issues?

Whatever was really meant by 'ghost workers,'  if this really was/is a genuine problem, does this mean there are thousands of non-existent civil servants in whose names the improved salaries are being paid, to be cashed by other people? Once this outrageous charge had been made, it became one that was too serious for a pay raise to be effected without answering the questions posed. Have the 'ghosts' disappeared into the mist, or are they enjoying bigger salaries too?

Why is minister Biti silent on all this? Why has he not said a word about the pay raise his ministry is reported to have begun effecting this week, but that he has been so adamantly against? Since he so loudly spoke about the non-remittance of diamond money to his ministry until quite recently, toughly citing it as one reason a pay raise wasn't possible, why is he not just as loudly and publicly saying what has since changed? If any 'missing' diamond revenues have now found their way to his ministry's coffers, why is he not updating the nation on this, the same way he alerted it to what he said was the problem before?        

Before, Biti looked like the hero protecting the public's interests, Mpofu like the shifty politician trying to justify secrecy and under-handed deals with the nation's latest resource. But now the tables seem to have turned.

Mpofu has been quoted as saying, “When we started selling diamonds, we sent all the money to the government. The minister (Biti) was claiming he didn’t get the money, trying to play politics. They were saying they had no money for civil servants but we worked hard to ensure they got money. ''

Enjoying his new self-appointed role as peoples' hero (or at least civil servants' hero), Mpofu twisted the knife into Biti further with, ''We are banned from selling our diamonds, but we are working very hard to get money. What we don’t want is for people to use politics to block the country’s path to progress.”

So then, Mpofu is  ''working very hard for the country's progress'' as shown by the diamond-backed raise, implying that other 'people' are clearly not. What do those 'people' have to say for themselves, given how strenuously 'they' said a pay raise wasn't possible and wasn't going to happen?

The political discord over what should be a positive development shows that when a country has low-quality politicians, even a lucrative resource can be a source of fighting.

A couple of hundred thousand government workers will have a little more money to spend each month. But is this 'development?' Has a precedence been set for how diamond money will be spent in Zimbabwe? Will all sectors of the economy now scramble to get a little bit of the diamond proceeds into their pockets, or will there be some/any left for other kinds of investment?  

Will this be politically possible at all now? Before any other sector of the economy gets their hands on the diamond money, the civil servants are already expecting an end of the year review of their new salaries. Having now tasted the government's blood over this chapter of the salary issue, it wouldn't at all be surprising if they pushed for a salary raise every six months!

But what about every other worker? What about the majority who are not formally employed? How do the rest of us get a piece of the diamond free-for-all? Should we all gang up outside the finance minister's office too?

Diamonds at Marange are an unexpected windfall for the country which makes it possible for the government, divided as it is, to implement this pay raise. The economic and political pressures may have been simply too much and too immediate for the government to avoid a pay raise, even with many other needs outstanding, especially also given how the politicians have not hesitated to give themselves expensive perks while pleading government bankruptcy.    

But one side-effect will be to put tremendous pressure on non-government employers to also raise pay. However, getting direct and indirect revenue from digging precious stones out of the ground is completely different from trying to profitably operate a farm, manufacturing or service business in the present tough times. All these sectors that say they are operating at a fraction of capacity will now be expected to similarly increase pay and allowances, but without the magical, quick and easy windfall of scratching the ground for diamonds.

In the government sector it is possible to separate remuneration from productivity, but in the private sector it is not. Now that private sector has been 'set up' by the government diamond pay raise, so that no one will be listening when they argue they can't afford a pay raise because of their low performance. Many will wonder to themselves: ''If  a government that so under-performs in so many ways can pay its workers more, why shouldn't private companies, even if they say they are struggling to survive?''      

You can be sure the ZANU-PF side of the coalition government will cast themselves as champions of workers' interests in this salaries saga, and portray their MDC counterparts as the opposite. The MDC, and Biti in articular in this case, has made it very easy for ZANU-PF to depict them this way.

Indeed, apart from Mpofu's barbs against Biti, an official of one union gushed, "Authorising the increment at a difficult time in our economic recovery programme demonstrates beyond doubt that our president is compassionate and flexible on issues affecting ordinary people.''

So another side effect is that while Mugabe and Co. and their supporters deny absolutely any responsibility for any of the many problems the country faces (''they are all the fault of the many plots of our many enemies against us''), they are very quick to take credit for anything that can be regarded as positive.

In this case, those thanking Mugabe, as if the money is coming from his personal pocket, will not pause to ask his role in causing the hardships that make even such small pay raises, on such low salaries, seem such a big windfall.

That is another aspect of a resource curse: Bad governments that are able to escape scrutiny by being able to just throw money around. What is remembered at election time are the governments' ''gifts'' and ''favors,'' not the governments' role in creating the negative conditions in which ''favors' are necessary and seen as something to be grateful for.      

Is this how Zimbabwe is going to 'manage' its diamond wealth?


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