Zimbabwe - Overseas Development Institute

equally s t e r i l e question of the f o r e i g n exchange saved by
importing the inputs to manufacture goods rather than importing
the f i n a l product. The 1986 UNIDO study made some crude ( s t a t i c )
estimates of d i r e c t f o r e i g n exchange usage and earnings of the
manufacturing sector. I t showed that i n 1982, the manufacturing
sector u t i l i s e d some $480 mn i n f o r e i g n exchange,whereas
manufactured exports t o t a l l e d $277 mn, g i v i n g a "net l o s s " to the
economy of $203 mn, but also, c o r r e c t l y pointed out that were
Zimbabwe to have closed down i t s manufacturing sector, foregone
i t s manufactured exports and imported those products i t was
c u r r e n t l y manufacturing then the net f o r e i g n exchange loss f o r
that year would have amounted to $2,237 mn, over twice the t o t a l
import b i l l f o r that year. (1986b:38-43)
37. Such a f i g u r e would be extremely d i f f i c u l t to compute f o r i t
would have not only to be based on the value of d i r e c t imports
from d i f f e r e n t sources but a l s o on the estimated f o r e i g n exchange
component of d o m e s t i c a l l y produced goods, i n c l u d i n g - i f i t were
to be accurate - the discounted f o r e i g n exchange component of the
c a p i t a l equipment used i n the manufacturing process, as w e l l as
the f o r e i g n exchange component of energy u t i l i s e d .
38. The f i g u r e s by sub-sector were as follows (UNIDO, 1986b:70):
(I) - 2.4% imported; (2) - 24%; (3) - 23%; (4) - 39%; (5) - 14%;
(6) - 24%; (7) - 52%; (8) - 16%; (9) - 41%; (10) - 60%;
(II) - 25%.
39. The complex linkages e x i s t i n g between the i n d u s t r i a l subsectors
and between manufacturing and the other sectors of the
economy are discussed most completely i n UNIDO, 1986b, e s p e c i a l l y
i n Chapter 4 and Annexes A to F, pages 355 to 404.
40. C l e a r l y such an index, which records a c t u a l trade flows,
cannot r e f l e c t trends i n e i t h e r p o t e n t i a l or suppressed demand.
As during the UDI period one o b j e c t i v e of p o l i c y was to maintain
balance of the current account of the balance of payments, import
a l l o c a t i o n s were fine-tuned not to exceed more than marginally
the value of export r e c e i p t s . This l e d to a lower l e v e l of
imports than under a l e s s c o n t r o l l e d environment would have been
achieved. I t would have been l i k e l y to have had the e f f e c t of
i n f l a t i n g the s e l f - s u f f i c i e n c y index.
41. The 1982 data was produced by a team of United States
consultants and graduate students under the leadership of a
p r i v a t e independent consultant. Dr. Doris Jansen. As the raw
data c o l l e c t e d was taken from Zimbabwe to the United States i t
has subsequently not been p o s s i b l e to examine the raw data. See
Jansen (1983) .
42. E s p e c i a l l y i f one concurs with the widely-held view that
because the 1982 c a l c u l a t i o n s almost c e r t a i n l y use a s u b s t a n t i a l ­
l y over-valued exchange rate (at l e a s t 15% too high) and because
they f a i l to use shadow p r i c e s , they s i g n i f i c a n t l y underscore the
degree of competitiveness. See R i d d e l l (1983), Stoneman (1985),
IBRD (1987:66).