Build economic clusters: Biti
HARARE – Finance minister Tendai Biti says Zimbabwe needs to develop economic clusters in every province to specialise in products where they have better comparative advantage.
Speaking at a 2013 budget consultation meeting in Bulawayo on Thursday, Biti said provinces should engage in industrial specialisation to benefit from own resources.
“We spoke about cluster economies this year, but the concept has not yet been implemented. This refers to industrial specialisation where each province specialises where it has comparative advantage,” Biti said.
Comparative advantage is an economic principle where industry consumes fewer resources to produce a particular product in one area as compared to another location, hence incurring low costs of production.
Biti said provinces should centre their economies on what they are good at producing.
“Provinces should build economies around what they abundantly endowed with for industrial development,” Biti said.
He said this economic system could only be possible if there is proper devolution of power where provincial governments have absolute control over their resources.
He alluded to the fact that other nations are benefiting immensely from the country’s diamonds, whose exportation into India has created employment, whilst the locals from Marange have not benefited much.
The concept of comparative advantage has been implemented by countries like Japan.
Biti emphasised that value addition for the country’s exports should be competitive on the international market.
“The country’s stance is not industrial because we are still using Cecil John Rhodes’ extraction model, exporting what we have extracted and not engaging in value addition, whilst companies are closing down and reduced to mere museums where school children learn history,” Biti said.
Provinces like Manicaland, which are endowed with timber, should specialise in timber processing whilst provinces like Matabeleland North and South that are the country’s hub of livestock production need to specialise in that sector, he added. – Nyasha Chingono