The ICT Policy you Deserve = Great Grand GDP Growth Hack
The ICT Policy I tabled previously is equivalent to a GDP growth hack. Hacking growth refers to achieving massive growth in a very short period of time using very few resources. It is a term dear to marketers these days. The term can be applied to GDP growth as well.
The Zim economy is stuck in a low-growth phase. Only a growth hack can bring millions out of poverty and leap the nation into a proper middle-income country in the shortest period of time.
Our GDP is currently said to be around $20 billion using the Minster of Finance’s figures. The Deserving ICT Policy will result in turbo-charged GDP growth. We could easily attain GDP growth rates above 10% per annum.
The Numbers Don't Lie
From the table above, suppose after the end of Year 0 you have successfully trained 100,000 people who manage to get all sorts of jobs offered by companies outside Zimbabwe. These jobs are the menial, entry-level type that does not pay well. The remuneration is on average $300 per month. This is low by developed world standards but decent for Zimbabwe. This $300 per month translates to $3600 for the entire year, which is paltry. It is less than the monthly salary of a senior developer.
Even though this is a slave wage by global standards, it goes a long way by Zimbabwean standards, especially when offered to persons who have been perennially and chronically unemployed.
The paltry wage of $300 per month (ZAR 4,500 earned by petrol attendants and maids in South Africa) consolidates to $360m in foreign receipts because of the large number of people (100,000) taking part in such remote work. This is huge.
It gets better. Suppose at the end of Year 2, you have trained another 100,000, such that you now have a total workforce of 200,000 ICT skilled workers deployed globally, undertaking all sorts of works that can be done remotely.
Your Year 1 graduates have gained more skills over the year. They are more productive and manage to get higher-paying jobs. Instead of soul-crushing click-work and labeling data for AI algorithms, they get to perform interesting tasks such as data prep and visualization. Maybe some get entry-level trainee jobs with slightly higher salaries. This raises the average annual income from $3,600 to $8,000 per annum and the total income earned by Zimbabwe in a year grows to $1.6 billion.
Suppose the following year, the average annual income jumps again to 12,000 per annum and grows at a steady rate of 10% thereafter. The number of workers deployed in the global workforce continues to grow by 100,000 every other year. After Year 5, the annual income earned for the country grows to $7.2 billion.
It doesn't end there. The productivity increases continue after Year 5 and more DataTech graduates are dumped into the global market.
You can see that the numbers grow very quickly into huge sums. At the end of Year 10, the average income of $23k per person and annual income $23 billion for the country. This $23 billion earned by a million people is bigger than our current GDP.
When a portion of this $23 billion is repatriated into the country, it boosts local consumption, thus driving GDP upwards. The remote software engineer working in Gweru for a company in Frankfurt, Germany, gets his $1950 salary per month and buys a $5 pizza for his girlfriend.
The pizza outlet spends $0.5 paying the pizza delivery guy, and $3 paying local suppliers, who also happen to have their own suppliers. The pizza delivery guy now has $0.5 to spend locally as well. This is how GDP can be turbo-charged by a strategic investment in ICT. Money flows into an economy that is integrated into global value chains.
Is this for real? Are these numbers real? These numbers are actually grossly understated. An annual income of $23,000 is way below the average tech worker salary of $46,000. At that discount level, it is possible for tech companies to hire cheap remote labor from Zimbabwe. Some of the cheap labor includes persons who would, at that time, have amassed 10 solid years of experience, thus commanding incomes at the upper end of the spectrum.
An annual income of $23k means a monthly income of $2k which is essentially ZAR30,000. Even South Africa and other African countries will find this labor cheap for tech skills.
Is it possible to train a million people in 10 years? It is very much possible. The ICT Policy you deserve outlined how this can be done using the cornerstone of free internet, free training, and command ICT.
Exporting ICT and 4IR Services
Herein lies the hack: instead of focusing on exports of physical goods, we focus on exporting services, which carry high margins, and are easy to harvest.
Normally, fast growth requires rapid industrialization. We don't have capital and time. When a data scientist, software engineer, digital marketer, based in Zimbabwe gets paid by a company outside Zimbabwe for services that the said worker performed whilst in Zimbabwe, we have effectively exported a service. Our minds are not accustomed to thinking of this as an export due to our fixation with physical products.
Because the work is performed by a person in Zimbabwe, it is part of our GDP. The money comes to Zimbabwe, to be spent in Zimbabwe. We benefit, our GDP grows, even though our economy did not create the data analyst, network engineer, and creative director jobs. That's a hack.
Nothing New Here. But we can do better
This is not new or revolutionary. India and the Philippines have been surviving off this strategy for a long time now. It's leeching-off other countries' jobs and industries.
We will do what India has done but at a higher level, up the value chain. We will just make sure our labor is cheaper than both India and the Philippines. We have nothing to lose. Our youths are already massively unemployed and underemployed.
We can afford to bid down the labor rates and get whatever we can get in the race to the bottom. We can train the young DataTech graduates in foreign languages other than English. Whilst India and the Philippines focus on English alone, we could become the Backoffice for Germany, Poland, Netherlands, Spain, Korea, and France in addition to the USA and UK.
Jamaica did this, on a very small scale, with musicians. It created a lot of talented lyricists, singers, chanters, DJs, selectors, soundbwoys, drummers, guitarists, flutists, bands, crews, poets, who toured around the world, performing and earning income and forex for the country. It wasn't state-driven but it helped the nation and still helps them up to now.
We can do better. We can be organized, state-driven, and focus on sustainable skillsets, not just talent. Better still we can render our skillsets virtually without leaving Zimbabwe
Dumping our unemployed youths into the global labor market could easily drag millions of households out of poverty.
Can the Global Market Absorb Such a Labor Supply Shock?
If we are to dump a million workers into the global IT workforce, is the world ready to absorb such a supply shock? The world is more than ready. Its already facing a chronic shortage in some fields. There is a massive backlog. It's a global skills shortage. Supplying a million skilled laborers from Zimbabwe is not going to shake the market. A million new workers are nothing. It's a little dog fart compared to the larger-than-life demand for tech skills.
The demand for the skills targeted by the ICT Policy you Deserve is growing very fast, globally. Some companies are planning to hire tens of thousands of people with these skills.
No country has a surplus. Every country has a shortage. We could be the first one to have a surplus. Though we cannot quickly grow to develop our own industries that require these skills, we have the option of quickly educating our people, have a surplus, and export these skills digitally. The benefits are not bigger and better than having your own industries, but at least it's something. It's a starting point.
Solving the Forex Problem Once and For All
The ICT Policy you Deserve solves the forex problem once and for all. It brings finality to the matter. When you have half a million people, earning an average of $1200 per month, from offshore sources, you get inflows into the country above $7 billion per year. This is already bigger than our current foreign currency receipts of $6 billion.
This observation takes us back to the baseline argument that our biggest resource is our people. They can earn the country more forex than the resources we usually refer to as natural resources. We only need to train the people for free and give them free internet. They are willing and able to work. With regards to natural resources, there is no resource that is more natural than people. People are the biggest natural resource, and they can be the biggest foreign currency earner.
This point has somewhat already been illustrated by the diaspora scattered across the world who send remittances to Zim which contribute a staggering $1.7 billion in receipts, which is 28% of the official receipts. If we could account for the unofficial remittances the percentage could easily go up to 40%. The contribution by the diaspora is bigger than receipts we get from gold and diamond combined ($994m + $126m) = $1.1 billion.
This means that, as far as foreign currency is concerned, our people in the diaspora are worth more than diamond and gold. This is true, literally, and metaphorically. It remains true whether figuratively or in terms of the actual figures.
Even if you lower down the expectations of my ICT Policy to, say, only 100,000 people working for foreign companies and earning on average $300 per month, you will get a total of $360 million per year, which can cover 80% of the current fuel import bill.
Bringing finality to the perennial forex problem will turbo-charge growth. Domestic industries will have a solid footing to increase capacity utilization.
Summary of Objectives
- to solve the problem of unemployment
- to export services that generate forex
- to buy some time needed in addressing underlying macro-economic fundamentals
- to empower Zimbabweans
- to quickly enter global supply chains for services whilst we re-align the economy for gradually claiming our place in global product supply chains
- to break-the-internet with an oversupply of labor
- to be an IT-hub to cater to Africa’s and the world’s IT needs.
- to build on the legacy for quality education by advancing that penchant into a modern, new age, new economy education
- To have an over-investment in IT skills, thus guaranteeing our space in the future global economy
At the end of year 10, we should have a million Fourth Industrial Revolution workers in Zimbabwe. Let's harvest the low-hanging fruits. Let’s solve the vending problem by letting these young people vend online; give them the skills, give them the internet, send them to online streets to fend for themselves.
The Great Grand GDP Growth Hack cannot last forever. Beyond a million, I believe the program needs to be tapered off with progressively lower enrollments at DataTech centers. The command elements should be removed after Year 10. State-involvement shifts to focus on creating a conducive environment for start-ups.
The Great Grand GDP Growth Hack is essentially a 10-year Labor Transitional Plan, after which the economy transforms into generating domestic jobs that pay equally well. Instead of focusing on exporting services, the economy transitions again into consuming those services internally, thus encroaching spaces higher up the global value chains.
This is what you deserve. It can be done.