Call me a cynic, but sometimes the country of my birth baffles me to the point I wonder: Is this really happening?
And if you don’t know what I’m talking about, here’s a brief: Malawi’s capital Lilongwe recently saw the opening of a new intertwined road interchange, named ‘Area 18 Interchange’. And because nothing like it ever existed in the country before, loads of Malawians began talking about it. The excitement soon reached fever pitch, to the point people were going out of their ways to go to the location of this interchange, to see it with their own eyes and observe the traffic criss-crossing its roads. Malawi’s president even visited the site the other day and stated his government’s commitment to develop the country’s cities through construction of transformative pieces of infrastructure.
Now you might say thats not a big deal, people in the developing world get excited about all sorts of ordinary things which westerners take for granted. And you are right. But what irked me was the hero-worship that followed, in that some Malawians began to claim that the construction of the road is one of the major achevements of former president of Malawi Peter Mutharika.
At which point I snapped.
It’s just a road. A tiny road for that matter. that if you go to other countries, you’ll find bigger and much better intertwined junctions… its no big deal.
On a much more reflective note, other people rate their leaders on substantive material things they achieved in their lifetimes. Achievements of huge significance that impact thousands of people, in some cases literary changing the course of history. To give a flavour, how about ending slavery as an achievement, defeating Nazism, ending the colonisation of a country, developing a Nuclear Weapon, giving the vote to women, presiding over a large National Economic Transformation (The New Deal); ending Apartheid and becoming the first black president of South Africa, lifting over 800 million people out of poverty(as China has done) …
How ridiculous do you think Malawi appears, when faced with a list of such noble and grand achievements, we’re in some corner hollering and worshiping a former leader based on a tiny road interchange that was built under their watch?? In 2020?
Is that really how low our standards have fallen? Kamuzu Banda must be spinning in his grave…
Some of these people need to visit Durban, Nairobi, Kigali or Addis Ababa- to see what real development looks like …
Let me tell you what I believe. Its no secret that countries like Rwanda, Botswana, Malaysia, and South Korea were at one point in the 50’s and 60’s on the same level of development as Malawi. But unlike Malawi, they chose to develop and made significant strides out of poverty to become middle income countries. It was a deliberate and sustained intervention to match and be level with some of the best.
Now you might say our politics were different at that time, we had an inward-looking dictator more concerned with self-preservation, and you are right. But since the start of multiparty democracy, we’ve had 26 years in which to “catch-up”. But there’s been nothing to show for.
And yet, our contemporaries also faced innumerable challenges. Like us, they didn’t have enough money. Their people weren’t that educated. In fact if you look at where we are, we probably have more incentives to develop that countries like South Korea or Botswana had in the 60’s and 70’s. The difference is while we sometimes appear comfortable in our sorry state, these countries were not content with mediocrity or token gestures. I mean, when was the last time you heard of an aid organisation working to feed hungry children in Souh Korea?
These countries decided they needed to create economies that could stand side by side with some of the largest economies in the world. Economies that were resilient to existential shocks. And it is high time we did the same.
In Malawi, we have to be careful not to let our historical excuses and well-rehearsed pragmatism (the “Malawian standards” / “crawl before you can run” excuses), ending up being main obstacles in our path to development. I’ve said it here several times before, but we really have to raise the bar on what counts as development, and what is raw and unmistakable mediocrity.
Peter Mutharika (like him or hate him) didn’t do much to develop Malawi because he was not a transformational leader. There was no blueprint, no grand plan, no credible and actionable dream, no rhetoric to charge and fire up people’s imaginations. His leadership, busied by tribalism, corruption and deceit – left much to be desired, and there was more bluster than implementation. If you don’t believe me, just look at the promises that were made in DPP’s 2014 Manifesto and compare with what was actually achieved by 2019.
In Malawi, we say of undeserved promotions that “Anangogweramo” , meaning Mutharika just fell into it. It was an accidental selection, and he wouldn’t have ended up as a leader of a party and the country if not for his brother pulling him into DPP’s Politburo.
But this post isn’t about the Mutharikas and DPP’s woes.
Malawi has to start seeking capable operators who will move us forward as a country. We have to begin to seriously empower people who are qualified and know how to build and develop a country and have the force of character to deliver on promises. Osati zongochitikira mwa ngozi.
There’s another equally important aspect to all this.
If a tiny road intersection has got the whole country excited, what do you think foreign dignitaries will think of us, as a nation? What do you think they will report to their countries, as ways in which to pacify or otherwise impress our people? Imagine how all the ruthless and pushy countries, even a China omwewa will deal with us, when they know it takes very little to impress our people… ?
We have to press the reset button on what we regard as development. Toilets that look like ma sakasa, Airport terminals towoneka ngati khola la nkhuku, tima bridge ta make dzana… and yes your little interchange, they’re all not signs of development in the context of the 21st Century. Because there are such things as global standards, and we have to pull up our socks in this area and begin to match the rest of the world. Rwanda and Kenya are doing it, why can’t we?
In any case, how can you possibly attract investment in the form of a factory (say Chevrolet, Nissan or Kia for argument’s sake), or how can you seriously attract a tech giant’s assebling facility (APPLE, IBM, HP, MICROSOFT) and compete against the likes of Ethiopia or Kenya – who have impressive infrastructure and who are doing far more to attract foreign corporations to set up shop in those countries, when your own infrastructure leaves plenty to be desired?
This article titled Noam Chomsky: America is the gravest danger to world peace from Salon is beautifully written and I can’t help but comment.
I think in a world where western countries have in the past used their economic advantage to suppress dissent or force countries which do not agree with them into line, or to punish countries which disagree with them (e.g. Cuba, Zimbabwe), such carefully articulated views must be more widely disseminated in so far as showing who is in the wrong and being unfair.
In my view, it can never be right or fair for some countries to be at mercy of other countries which have an economic oligarchy / monopoly … and greater military power. The average Iranian has never done anything wrong to any American, so why should they suffer as a result of economic sanctions on Iran for the decisions of their leaders? And why should they suffer at all – just because their country’s leaders fundamentally disagree with the Americans?
In the past Americans through doctrines such as Manifest Destiny have pursued imperialist ambitions culminating with their defeat in Vietnam. And when the Shah of Iran, the puppet leader the American leadership installed in Iran was ousted, and the Islamic Revolution took off, it seems some have harboured this unreasonable anger against Iran since then. In my view it is no more than a hegemonic attempt to control other people, to exploit their resources, and suppress dissent that is driving America into conflict, and you don’t need to refer to the hacking of communications of world leaders by the NSA to see this kind of poisonous mindset.
The opposition to this nuclear deal is frankly disgusting, and for me it shows a number of things about some American leaders including:-
there are too many warmongering American leaders who still believe it is up to them to police the world, and tell others how they should live their live.
the United States is partial and dishonest about nuclear power, as it is about carbon emissions ( do as I say, not as I do)
If you are willing to indiscriminately bomb iran, its children, its women, what does that say of how you see the Iranian people? …………………… Would those same leaders be happy if some country bombed New York or San Francisco?….. It’s people, its women, its children causing deaths of hundreds of thousands of people?…………… Of course not….. So why then is it acceptable or somehow even a consideration for the American airforce to bomb the people of Iran, just as they’ve done in Syria, Iraq, Afghanistan and Libya – causing untold devastation and suffering, causing deaths of over a million people and leading to the rise of ISIL? Why is it acceptable to bomb a middle eastern country but not acceptable to drop bombs on the people of California? The answer to that question is this: because those hawks and others who think like them, advocating military action or heavy economic sanctions against foreign countries, are racists who do not view Iranians as people in the same way that they view American people; they don’t see Iranians as people deserving peace, happiness, prosperity and security. They see them via a patriarchal lens that categorises people based on their skin colour, where they were born and what they believe in …..
If it was possible for some of the leadership to have normal family relations with people of Iranian / Iraqi heritage, say grandparents of a spouse in Iran, or had married Iranian women/ men, and got to visit Iran, and see the ordinary lives of the Iranian people; people who just wanted to be part of the global village, to send their kids to school, to be able to afford groceries, to be able to afford nice holidays, to have safety and security, I think some of them would realise the flaws in their thinking, and begin to see things differently. But as things stand, it’s stunning just how offensive some of the rhetoric is – which I think points to being closed minded.
Such type of divisive conduct is what made dictatorships such as Nazi Germany, and such type of thinking is what was responsible for everything from the holocaust to Colonialism and Slavery; that certain people have more value than others; that certain people deserve to be treated better than others; that certain people should be subservient to others.
I totally reject such type of thinking.
All people are equal and valuable under the sun, before God, irrespective to where they live, their skin colour, their nationality, their sexual orientation, gender or age, irrespective of where they were born, or how much money is in their bank accounts.
You may not agree with the Iranians or the Afghan people or Iraqis over one policy issue or another, but that doesn’t authorise you to bomb their country and bring death and devastation to their lands… what happened to your Christian values – if you claim to have values? Would Jesus Christ – the same Biblical character who courted the poor – authorise the bombing of Iran? Bombing another sovereign country unprovoked, and for no sensible reason only shows you to be a coward akin to a school playground bully. If he can’t get what he wants he fights.
But even if you were not Christian/religious, what about simple and old-fashioned humanity and decency? What about propriety?
I don’t believe Iran is capable of bombing Israel, if anything they are more troubled about the plight of Palestinians, as is every true muslim. Let’s be honest, Palestinians are in a much worse situation than that which black people of Apartheid South Africa ever were, and if I were a muslim I too would be more concerned than I already am.
So this ridiculous fallacy that Iran is a threat to world peace must be put to bed sooner than later, and Chomsky does a good job at this. Over the course of my life in the UK, I’ve known a few Iranians, and they tell me their country cannot attack Israel or some other country because the military wouldn’t have the support of the people. Army officers would simply refuse to effect any such nonsensical order. The establishment may have gotten away with rigging elections during Ahmadinejad’s tenure, but they would never get away with such an atrocity. The rhetoric of Mahmoud Ahmadinejad, the former president, was largely because being a volunteer to the Revolutionary Guards – he may have felt obliged to appease his fellow hardliners, the same camp he may have had to return to after serving as president. So, far from his talk being threats, it was just theatrics.
Also how would the world react against Iran if they indeed fired even a single missile into Israel? The Iranian leadership is not stupid not to know that such would be the end of the Islamic Revolution. It’s a disingenuous western lie by an unholy alliance of the right-wing media and dodgy alarmist politicians who are drumming up the hatred against Iran, for some other motive – my guess a financial motive. The same kind of lies that claimed Weapons of Mass Destruction existed in Iraq.
After all the ills of the last 200 or so years, each country should decide what they want to do, and how they want to do things, it should not be up to Europeans or Americans or anyone else! to dictate to the rest of the world how they should live their lives or how they should generate their energy or what kind of policies those countries should adopt. After everything the Americans and Europeans have done in the past, which history can testify to, it sure is high time to get off the high horse.
The other day – about two weeks ago, the British Prime minister referred to the migrants at Calais trying to cross into the UK as ‘swarming..’ It was an insensitive term and many people rightly took offence. On twitter, many condemned such a wording as dehumanizing.
A few days ago, Philip Hammond, the British Foreign Secretary joined Mr Cameron, speaking of ‘marauding migrants‘ threatening the standard of life of British nationals in the UK. Again, Like Cameron, you have to wonder on which planet these people live on. Amnesty International called the language shameful. The Liberal Democrats Home Affairs spokesman Alistair Carmichael had this to say:
“The Tories’ language is becoming increasingly hostile and unsavoury. In reality, they are too scared to deal with the humanitarian crisis unfolding in Calais.
“Britain can’t escape the problem just by sounding ‘tough’, it needs to take a lead.
“It’s time we proved our worth on the world stage, signed up to the EU asylum policy and accept our share of vulnerable refugees, rather than expect other countries to do it for us.”
I think it is insensitive to describe other human beings in such animate and dehumanizing terms, and just goes to show how out of touch politicians really are. It also shows that humans from Africa, Asia and the Middle East are not valued in the same way British or European people are.
It’s a fallacy to see British leaders going around the world preaching democracy and peace, when right on their doorsteps, they are treating foreigners like crap. You can’t make that up, and you’d hope the world is watching.
Asylum Aid criticised the Foreign Secretary’s words as
“inaccurate and inflammatory statements”,
I agree, they present a skewed picture that divorces nuance for the situation. I’m waiting for the day a sensible British politician will rise up who will say to the people of the world that the actions of British leaders in the past have caused immense human pain, and damaged other lands far away from British shores. And some of that damage is still being felt today. I may not be alive when that happens, but I hope one day someone will be honest and brave enough call a spade a spade.
Knowing what I know about British History (both what you are taught in school, and what you find out for yourself), and having experienced first hand the institutional racism in the UK, I can tell you without a shadow of a doubt that in some sections of the UK population non-white people are treated differently to white people. There is extreme hostility against foreigners, which is not entirely surprising since the media fans hatred all the times. But it’s kind of strange seeing migrants contribute so much to the UK (not only via the NHS, but in the taxes they pay).
The government’s attitude towards immigration is so frustrating precisely because it is so wrong-headed. There is endless proof that the long-term benefit of migrants and asylum seekers are manifold – Ugandan refugees, for instance, have created approximately 30,000 jobs in the Leicester since 1972. Last year the Treasury’s independent advisers said that immigration is beneficial to the economy as new arrivals are most likely to be of working age – and even the chairman of the Office for Budget Responsibility, Robert Chote, stated that growing immigration to the UK “does tend to produce a more beneficial picture” for the economy. Read more here
So then why would a leader or a minister speak so negatively about migrants? Cameron and Hammond are hardly Nigel Farage, they can’t possibly be that ignorant not to see the repurcussions of their statements.
Isn’t such talk exactly the kind of talk which sows the seeds of racism, hatred and bigotry in society? Are these the kind of behaviours these leaders want to encourage in Britain? I think not, my guess is there is an agenda – some political capital is to be carved from all this.
To me this is how it looks: they are saying migrants, whose ancestors, Europeans took advantage of, looted their lands of every natural resource, enslaved their peoples, raped their women, made wars against them, divided up their lands along nothing but profit-driven motives, and generally reduced to poverty entire peoples – as they did in India and China; and whose descendants – the migrants – are now trying to find a way of escaping hardship, poverty, discrimination and violence in their own lands, are not worthy of peace, of security, of assistance – seeing their past troubles, of prosperity. Essentially that they are subhuman, thats what the actions say.
Actions speak louder than words, and what we are seeing here is an entitlement mentality. That it’s okay for historical European abuse of non-European peoples to be swept under the carpet; that the bombing of Libya, Iraq and support for Syrian rebels is irrelevant to the migrant crisis and must be brushed over, that if you plunder resources of other countries, and create economic and political instability… its okay because if s**t happens, you can always close the borders. It’s the sort of things these people on this poster would say
During Nazi Germany’s reign, Hitler’s honchos put out propaganda which was later enacted upon to make life difficult for foreigners in Germany, in particular for Jews. What followed was a human atrocity that culminated in the holocaust, but which the Nazi machinery justified with all sorts of abominable stories. But there was a sinister motive behind the hostile rhetoric, and the Nazis made a lot of money out of it.
There’s always a sinister motive behind hostile rhetoric.
Today, the migrants at Calais are not being threatened by gas chambers or execution, but the language directed towards them – by politicians, not least the likes of the Daily Mail – is no better than that which was used by the Nazi machinery. Still, most of these migrants have no access to land or capital in the countries they flee; a polar opposite to Western corporations operating in Eritrea, Ethiopia, the various West African Countries, Syria and Iraq – who have access to land and capital in those same countries.
The migrants have no security, and indeed may be at the mercy of criminal gangs and trafficking networks – something which expats in the aforementioned countries do not have to fear. The expats can get on with their easy and comfortable lives seamlessly, while the nationals of those countries – and their migrant brothers and sisters drowning in the mediterranean – struggle with day to day living, and can’t afford an existence, never mind a luxurious lifestyle.
Why do we keep on blaming the poor migrants whose poverty the West is partly responsible for? Countries where corruption, tax-evasion, profit-shifting and white-collar crime are responsible for the loss of over US$1tn in illicit financial outflows
That is the real problem driving migrants to Europe – Inequality. Because if you have security, a good job, great educational and financial prospects and a social life – in your own country, why would you want to leave and risk your life for a pie in the sky?
British Red Cross managing director Norman McKinley recently said about the cuts to the money asylum seekers receive in the UK:
“These cruel cuts will plunge families into further poverty, making it agonisingly tough for parents to feed their children, and practically impossible to buy clothes and other essential items.”
What he forgot to mention is that many foreigners support family members back home. I know people who send as little as £20 every other month to a relative in Africa for one thing or another; to help someone pay for school, or for food, or to settle some bill. It’s not much, but it does the job, and helps people at the other end.
So then, if a government introduces policies that have the effect of creating economic hardship for an already deprived community/ section of the population, how will they be able to help their relatives abroad – who are in worse financial circumstances? It doesn’t make sense and if anything it’s counterproductive…
One final thing I should say is this. How many Swiss ‘migrants’ do you bump into everyday? Or how many ‘Norwegians’ or ‘Mauritians’ do you know or do you bump into on a regular basis?
Switzerland, Mauritius and Norway are rich countries, and their nationals live in their own countries because the countries have the capacity to create jobs and distribute wealth fairly amongst their people. When you look at Eritrea, Ethiopia, Somalia and most countries in West Africa and Sub-Saharan Africa, the story is rather different.
Further, European and American corporations are not paying bribes (in exchange for lax tax arrangements) in Norway or in Switzerland, or are they? At least you rarely hear of such corruption, unlike in the countries from whence migrants come.
If Western businessmen continue to fleece the countries from whom migrants originate,of valuable resources, how can European leaders realistically expect migrants to stay in their own countries? When the funds the country is losing is exactly the kind of money that would create jobs and an economy that can support that country’s citizens… Let’s be honest here… it’s not going to happen, and some of this rhetoric is a smokescreen to the real problems.
Mr Cameron, and Mr Hammond, if you are really serious about reducing immigration, begin by pushing for real global economic equality, at national level, within the EU, within Commonwealth, at UN level and beyond. That in my view has got a much higher chance of curbing migration to Europe than anything else.
What does a future of peace and prosperity for Africa look like? Is such a future possible with the present dynamics at play across the continent? Is such a future sustainable? What needs to be done for every child to have food each day. For every child to have access to an empowering education? For every man to have access to land ? For each person to have access to work? What will it take to achieve safety and security on the continent? To end the proliferation of arms into the hands of militia and rebel groups….What will it take for African countries to feed their people – an end to hunger, to be able to clothe them – an end to poverty; to be able to afford essential medicines, provide for their old and vulnerable, to protect their people, and for African leaders to be able to resolve their differences without turning to war?
Maybe some of these are the wrong questions to be asking at this time, but even still, the solutions are there. If others can achieve them, the solutions have got to be there.
The trouble with capitalists (as with politicians) is that they think only about themselves. Until after things begin to go wrong, after which they still think only about themselves. Need proof of that? What happened in the 2008-2009 financial crash?
Dont get me wrong, I’m pro Capitalism. Totally. May not entirely be proud of it, but I am pro ‘responsible Capitalism’, for lack of a better term. My line of work is made possible definitely only because of Capitalism. And yes, I enjoy what I do.
But when your only motivation and greatest priority is making money; and everything else including other human beings come second in the list of priorities, then it is more likely than not that you have lost the plot; that you need salvation.
But without digressing too much, why is the sale of MSB the wrong decision?
Well, firstly assets fetch more when sold at the peak of their value. When they are sparkling and in pristine condition; for companies, it’s when business is going well and the profits are pouring in in bucket-loads. During such times, the sale of a business can command serious financial digits and can really bring value to their owners. But when the business is loan-laden with toxic debts it issued (some alleged to be politically influenced backdoor deals), when a bank is infested with inefficiency, corruption or dodgy deals, when there are some financial mishaps, you can’t possibly expect to get value for money, or for the bank to be sold for the real value it is worth. Had the management persevered and got its act together before selling, had the bank liquidated a significant part of the debts on its books, it’s likely that it could have fetched more on the market.
Think of it like selling your old car (which is partly owned by your friend who doesn’t want to sell it) when the windscreen has a chip in it, when the paint work needs improving, when one tyre is flat, and look! – .there’s a decomposing rat on the backseat..yuck!
Lets just say your car would have fetched a better price if you first reached an agreement with your friend, and fixed it; if you got it cleaned, …kuyikwecha bobo, before attempting to sell it.
Secondly, you can’t sell what you do not officially own. You can’t sell what you have no authority to sell. Imagine if I showed up to a potential investor and claimed that I owned the land on which the new stadium in Lilongwe is being built. Not only would my claims be laughable (and could possibly land me a stint in jail), but any foolish investor who dared believe such folly, without independent verification, would find themselves in the undesirable position of having to explain a useless contract – a piece of paper that would be completely unenforceable.
So, being state-owned, MSB is essentially a chattel held by the state in trust on behalf of the people. It is Malawians who should hold the key to its fate, they are the ones who can legitimately decide on whether to sell it or not. Malawians and not only the government of Malawi.
If that’s not currently the case, then that’s how it should be, for any state-owned property because otherwise there is a danger that the executive could make decisions befitting more of a dictator than a democratically elected president; that the legislature could act without consulting the people they represent.
Which is a problematic state of play since by selling the bank, the assumption is that the government is acting in the interests of Malawians – and has their blessing in undertaking such actions ; yet from the anti-sale demonstrations and all the opposition to the sale, it would be perfectly clear to anybody who was paying attention that there are many thousands, possibly hundreds of thousands, or even millions of Malawians who didn’t exactly approve of the decision (the very reason why it had been initially suspended). So without a vote or proper public consultation, wouldn’t the sale of MSB be undemocratic? Or illegal?
In addition, state-owned property is one means by which the state generates an income to pay for the business of government. Without enough state-owned property (or some other dependable source of an income), most governments are unable to generate enough funds from tax-collection alone. They struggle to pay for services, and the business of government (Civil servant salaries, Security and public order, food, medicines, infrastructure, education, etc) with the result they end up having to borrow money from institutions whose primary motive is making money; international banks who can’t possibly be said to have the best interests of the loan recipient country at heart.
It’s the capitalists I mentioned above who get to provide the loans, on their terms and not the recipient’s terms. Therefore, it must come as no surprise if they disregard the hungry children the poor country has.
Disregarding overflowing maternity wards in the country’s hospitals – which desperately need upgrading; with no concern, sympathy or consideration for parents who can’t pay for medical care for their children. Make no mistake, Capitalists are not charities. They are not mandated as governments of western democracies are – to care for the people, especially the most vulnerable people in society. They work without care for the villagers who have no clean water, no electricity and no medicines in hospitals. They don’t think about the young people who have degrees but can’t get jobs in their own countries because there are no jobs available (and the government or domestic private enterprise are not investing in jobs or youth development initiatives).
It’s no big secret, but most Capitalists think only about how much money they can make for themselves, for their organisations / institutions and for their friends.
I may not have all the concrete data to support this somewhat wild claim, but I’m willing to bet a few quid that they do.
The result is inevitable; whole countries end up tormented by debt, with ballooning deficits which can never realistically be got rid of, as Argentina and Greece have found out the hard way in recent years. They become the butt of jokes and stand at the receiving end of blame. Unable to raise credit, and therefore unable to finance their activities. It’s virtually a coup.
This is the reason why so many countries are in debt, because their governments do not own enough assets from which to extract a dependable and sustainable income, and they have to rely on harmful debts which damage their economies more than they help. Put simply, these countries do not have a job that pays enough for them and ‘their families’ to survive on, so they go to loan sharks who tie a noose around their necks.
In Friedmanian economics (or what he termed neoliberalism), the same governments – most of whom at the time were operating surpluses or relatively small budget deficits in comparison to the current levels – were told by mostly pro-capitalist economists to relinquish ownership of high yield assets (in industries which were dominated by few individuals/ merchants in monopolies that traded side by side with the state-owned enterprises) they owned, in the process ‘laissez-faire’ economics morphed into ‘market competition’… a phenomenon similar in effect to the fall of the USSR’s property ownership framework while urging in the rise of the Oligarchs. Before you had fewer players gnawing at the national cake, and the government was a significant player- now you have more players at the banquet(even though they are still a minority in comparison to the whole population), but this time, the government is not even at the table.
No prizes for guessing who bought those assets, but the state – these fellows argued, shouldn’t be in the business of running anything. As a result, several decades later – culminating in Thatcherism in Britain – everything from utility companies (including gas and electric suppliers) were mostly owned by corporations; so were the mines, railway and telecommunication companies, virtually every large industry with the capacity to raise huge sums for the government fell out of majority stake public-ownership, in preference to some private outfit, whose primary motive was profit and little else.
Some of these countries do not have oil, or other high demand resources on which to depend in the long-run (and even many which do struggle to manage them properly).They have to rely on a small tax base (~ heavily taxed citizens) for revenues, crops such as tobacco which are fast becoming unpopular, on tax-evading companies to pay their fair share of tax to the state; how crazy do you have to be to depend on profit-shifting (cost-shifting) corporations to stop their dirty tricks and behave (even though there is little indication this will happen anytime soon)? They rely on meagre inflows of Foreign Direct Investment, on aid organisations whose ethics/ morality is often in question. And if all that isn’t sufficient to support their budgets, these countries have a ‘safety’ net which can only be described as a poisonous concoction of interest-driven donors and austerity-prescribing institutions – to provide loans.
In contrast, countries rich in natural resources such as Saudi Arabia, Qatar and Kuwait own significant parts of their largest industries, and can therefore afford to finance almost all the business of government from the sale of their natural resources (in this case oil).
When was the last time you heard that Kuwait or Qatar had asked for a loan from the IMF?
They don’t need to hold onto many state-owned assets outside of the petroleum realm, because the petroleum industry generates enough income to cover the business of government and give them budget surpluses for every other luxury – from financing huge construction projects, to paying for a controversial world cup that’s now increasingly doubtful – thanks to the FIFA scandal.
What about all the bailouts, someone may ask, and loans and aid provided to struggling countries over the last 50 years, where has all that gone? Well, mostly to the banks. And to companies from the countries of the aid providers. In the case of Greece which is suffering the same kind of debilitating debt onslaught as most African countries but on a much larger scale, the money went back to the same capitalists (see another link here from the Guardian) who created the very same mess in the first place.
Thus, considering all this, and more, I have to say for me it’s entirely valid to believe that if you don’t have a large multi-billion dollar industry in your country, if you have few natural resources to exploit, and if many of the common problems African countries have to battle with plague your economy, then it makes perfect sense as a government to hold on to as much industry as you can – and try to make it profitable. Maybe in the same way as Norway has done.
Such a strategy to me has a better chance of achieving a zero deficit budget, giving your country a surplus of disposable income others fail to achieve.
And that is why I think Peter Mutharika and the government of Malawi has got it wrong on Malawi Savings Bank (MSB)
P/s: Go tell the Malawian commentator who appeared to be saying that Malawians were wrong to voice their concerns over the sale of MSB that he has got it completely wrong this time. If anything, Malawians should be mad for being taken for fools! far from being silent more Malawians should stand up to be counted. Foolish ideas deserve nothing but condemnation!
After the deadlock in Europe over Greece’s debt repayments, should they now look south?
After all the flak Greece has received in recent weeks, you would be forgiven for thinking that it’s only a matter of time before the country’s PM Alexis Tsipras and his finance minister Yanis Varoufakis throw in the towel. Since Syriza took half of the seats in the Hellenic Parliament, there’s already been a backlash against the deal which the radical left-wing party negotiated with the EU partners on 20th February. A backlash complete with anti-government marches, smashed shop windows, Molotov cocktails and torched cars.
That began in February. On Thursday April 16th, another group of protesters in the form of 4000 miners and their families, descended onto Athens’ main central square over a plan to possibly revoke the licence of a gold mine in Skouries, in the northern Greek peninsula of Halkidiki. The mine is operated by Eldorado Gold Corp, who say the revocation would halt their $US 1 billion investment project which could have created 5000 jobs.
Trouble on Friday April 17th came in the form of police breaking up a 19 day sit-in at Athens University by anti-establishment protesters. The protesters were occupying buildings at the site for more than two weeks, demanding the closure of maximum security prisons and the release of some suspects.
Conservative and right-wing media groups also have been hostile to Syriza. Peter Martino writing for the Gatestone Institute (a New York city based think tank that specializes in strategy and defense issues, and describes itself as ‘non-partisan’) in an article mockingly titled Hugo Chavez Coming to Europe says:
The new Greek cabinet is not a friend of Israel nor of Jews. Syriza is known for its anti-Israeli and pro-Palestinian positions. Syriza politicians have frequently participated in protests against the Jewish state. Clause 38 of the Syriza party program advocates the “abolition of military cooperation with Israel” and “support for the creation of a Palestinian state within the 1967 borders.” Two other members of the new Greek cabinet, although not members of Syriza but of its coalition partner, the ultra-nationalist Independent Greeks [ANEL], are also known for their anti-Semitism. The new Greek Minister of Defense, ANEL leader Panos Kammenos, recently accused Jews of “not paying their taxes.”
He concludes with:
…The Marxist economic remedies that these parties stand for will not lead to more prosperity for their countries, nor will the transatlantic relations between Europe and the United States much improve with governments whose leaders draw their inspiration from Hugo Chavez.
Greece has been told by its EU partners that if they are to continue assisting it, it must maintain austerity measures which they prescribed – an unpopular move which effectively means Syriza trashing pre-election anti-austerity promises made to the Greek electorate.
[su_box title=”Some of Syriza’s pre-election Promises”]
a minimum wage restored to 751 euros ($853) per month
negotiated debt relief of at least 50 percent from the country’s lenders
an end to austerity policies that have affected healthcare spending and choked the welfare system. [/su_box]
The IMF chief recently declined to extend an instalment repayment due date of a loan the IMF has extended to Greece, saying the country needed to work on pushing through sensible and workable reforms that will put the economy on the straight and narrow.
Source: Economist
Note: The blue line represents the repayment schedule which former prime minister Georgios Andreas Papandreou tried to negotiate
And this bad news didn’t start yesterday. Back in January, Tim Jones writing for Jubilee Debt Campaign, in an article titled Six key points about Greece’s debt lamented how the austerity pills which the IMF were prescribing for Greece have worsened the economic situation of the country:
“When the ‘Troika’ programme began in 2010 Jubilee Debt Campaign warned that this was repeating mistakes made in developing countries in the 1980s and 1990s. Bailing out European banks rather than making them cancel debts would ensure the private speculators would get repaid, whilst the public would pay the costs of having to cancel debts in the future. Austerity would crash the economy, increase poverty and unemployment, and increase the relative size of the debt. This is exactly what has happened”
He goes on to say that:
… The growth projections were extremely optimistic; Greece’s economy is now 19% smaller than the IMF said it would be, having shrunk by more than 20% since the start of 2010.
India warned that the scale of cuts would start a spiral of falling unemployment which would reduce government revenue, causing the debt to increase, and making a future debt restructuring inevitable. They did; unemployment in Greece is over 25%, with almost two-in-three young people out of work.
The combination of the crashing of the economy and the Troika debts means Greek government debt has grown from 133% of GDP in 2010 to 174% today.
The bailout and austerity programme did not take place because it was thought it would help the Greek people or reduce the size of the debt. It was done to save European and Greek banks and protect the profit of speculators.
Many others were eyeing Athens nervously even before Syriza came to power. The Germany finance minister Wolfgang Schäuble in an attempt to send a tough message that there will be no room for renegotiating Greece’s rescue package, warned that by electing Syriza, Greece was risking its membership in the eurozone.
Schäuble and Varoufakis – not seeing eye to eye
Since then, there have been many attempts at striking a deal that would ease the pain of austerity, but none have so far succeeded. On the 24th April, Greece’s creditors will decide whether to accept the country’s new debt proposal to the Troika.
Yet nearly 2 years ago, in June 2013, the IMF admitted that they had failed to realise the damage which austerity would do to Greece. At that time, they said:
The Fund approved an exceptionally large loan to Greece under an stand-by agreement in May 2010 despite having considerable misgivings about Greece’s debt sustainability. The decision required the Fund to depart from its established rules on exceptional access. However, Greece came late to the Fund and the time available to negotiate the programme was short.
The mistake of prescribing austerity to a weak economy has been repeated too many times over the decades for us to recount here.
By most sensible financial analyses, it is clear that Greece has been pushed into a corner by the perfect storm of a huge debt burden, a relatively small and largely undiversified economy (that has been stagnant in recent years partly due to austerity economics), corruption, nepotism and tax evasion.
Greece’s position within the Euro is even more precarious. Paul Mason, writing on 4 News puts it thus: So Syriza’s leadership is wedded to the eurozone but the eurozone is currently configured to smash Syriza
[su_pullquote] So Syriza’s leadership is wedded to the eurozone but the eurozone is currently configured to smash Syriza.[/su_pullquote]
By the terms of the previously agreed deal Greece is owed €7.2 billion, which it desperately needs to pay back loans, to pay wages and service the welfare bill. But European leaders have been reluctant to hand over the money until it is clear that Greece intends to follow through on promised structural reforms.
No wonder Varoufakis thinks that EU ministers are trying to push Greece into Default, an allegation which could be theatrical political manoeuvering more than anything else. Similarly, Alexis Tsipras’ trip to Russia was viewed by some as being no more than a bargaining manoeuvre.
It is Syriza’s way of saying Don’t push it, we’ve got other options. It also sends a message that there’s been a clear shift in the geopolitical landscape across Europe — seen for example in Spain by the rise of Podemo; that should the EU try imposing more sanctions on Russia over the Ukraine crisis, Greece as a member of the EU could veto such sanctions.
However, one sentiments common to even Greece’s sympathisers is a realisation that if the Troika do not act to avert what is an almost certain crisis, and in the absence of an alternative cash injection from somewhere, much trouble lies ahead.
If more bailout cash isn’t released soon, the Greek government will have to start issuing IOUs promising to pay the holder in euros at a future date. It wouldn’t take long for these notes to start trading at a discount to their face value on the secondary markets. Greece would then be forced to impose capital controls preventing people from shipping real euros out of the country. It would effectively have reintroduced the drachma in all but name.
Paul Mason:
If Greece is forced into an accidental default, damage to the euro project and to the EU’s image would be massive. A central bank seen to be colluding in the bankruptcy of banks it is supposed to supervise, and willing the breakup of a currency union it is supposed to be
Amidst all these signs of impending doom, it must be emphasized that the Greek economy has for decades suffered from speculators, tax evasion, an underground economy, corruption, nepotism, and bad governance compounded by unhelpful economic policies. Syriza is in fact part of the solution that could move the country away from these ills. They are not the problem (as many on the right seem to think).
Thus, what of Greece developing ever closer trade links not only with Russia and China, but also with African countries? Perhaps as a way of reducing Greece’s expenditure and finding new markets for Greece’s exports. Imagine if Greece increased its trade substantially with resource rich countries such as the Democratic Republic of Congo, Nigeria and Tanzania.
Current problems facing Greece’s economy may present it with an opportunity to develop economic partnerships with African countries. Relationships that could solidify into greater economic partnerships down the line. There are at least five reasons why such relationships could be mutually beneficial.
1. Greece could benefit from relatively cheaper raw materials from Africa
When the IMF are demanding huge sums in debt repayment, as Greece had to fork out, the last thing the country needs is to be spending money it does not have on things that are cheaper elsewhere.
Greece could begin sourcing its fuels from West and North Africa. This year alone, the fuel import bill in Greece is expected to reach $19.5 billion. With Nigeria recently awarding most of its long-term oil contracts (worth an estimated $40 billion a year) to local companies, Greece would be best advised to partner with some of these companies in trying to lower its fuels import bill. Greece could do more by talking to countries such as Morocco and Egypt over the prospect of developing solar farms located in their deserts, although this may be a long-term consideration.
2. African countries could benefit from Greek expertise
African countries need equipment, ships for transportation of goods and people, manufacturing equipment for goods ranging from paints and cement, to chemicals and medical equipment to name a few. Greece could also begin training doctors, nurses, teachers and other professions which are in short supply across Sub-Saharan Africa (many African countries have a critical shortage of trained medical personnel. In Zimbabwe for example, there is one doctor for every 6250 people (**2004 data) and in Uganda, the figures are one doctor to 24, 745 people). It will create jobs for Greek citizens, and will enable technology and knowledge transfer to countries in the most disadvantaged parts of the world.
[su_pullquote]More than 25 per cent of immigrants to Britain are students, compared with 20 per cent five years ago. The influx follows concerted efforts by many higher education institutions to market their wares abroad and boost their income.[/su_pullquote]
Yet with the current divisive and xenophobic rhetoric in British politics, many people who would otherwise have sent their children to the UK to study, will be looking at alternatives elsewhere; to countries where they will not be the object of racist rhetoric for every single problem that the country faces. Greece could take advantage of such a shift and position its higher education sector to attract international students from far and wide in fields such as Medicine & Health sciences, Law, Engineering, Mathematics, Physics, Pharmacy and Dentistry. And here Greece is already at an advantage. It has skilled professionals – for example, UK hosts many Greek lecturers and dentists. So it is probably fair to conclude that Greece has a sizeable pool of nationals who are not only educated, but can also speak English – meaning prospective students applying to Greek Universities will not have to learn Greek as a prerequisite to study in Greek Universities.
3.Greece should increase its exports to African countries by offering quality products at more competitive prices than those offered elsewhere in Europe.
After the fall of the Soviet Union, and the liberalisation of Eastern European markets, Greek exports to Central and Eastern Europe (CEE) increased from 14.5% in 1995 to about 25% in 2001. With a good strategy, similar trade volumes could be achieved in trade links with African economies?
Right now Greece finds itself in a place many African countries have been in for decades. Most African countries became independent after long periods of oppression in which a considerable and inestimable amount of their wealth was plundered by colonial institutions (the likes of the East India company) for the benefit of their colonial masters. After becoming independent, with no industry (so no tax base), yet huge private enterprise interests belonging to foreign nationals, they struggled to raise enough funds to finance government functions, failing to create independent institutions. The lack of money fuelled corruption and nepotism, and meant that they needed to borrow funds from somewhere (organisations like the IMF – which emphasized austerity and cuts over growth of the economy). So these countries borrowed, and borrowed, only for their debts to increase exponentially, to a point they could not be repaid, let alone serviced. Many were then asked to liberalise their economies, selling critical assets to foreign corporations, weakening yet again their already precarious positions. Debts were cancelled and replaced with more loans, but because the states owned very little means of generating an income, they still had to borrow money. Further, the corporations which bought state assets used international law and other schemes to shift profits out of the African countries, depriving these countries of critical foreign exchange and also avoiding paying tax. This vicious cycle continues until today in most parts of Africa, with austerity policies only serving to harm the poorest in society.
What was needed for those African countries soon after independence (as is what is now needed for Greece) was growth of industry and diversification of their economies (to grow the tax base). Further, they needed value addition (enabling raw materials to be processed before export – thereby attracting more competitive prices), an end to illicit financial outflows, investment in infrastructure, and the creation of entrepreneur friendly environments where innovators could thrive. Greece could play an instrumental role in helping African countries meet such aims, and in the process further diversify its own economy.
4. The countries which suffered atrocities as a result of war, colonialism and other exploitative practices need to form a strong block to demand redress to their grievances.
5,200 Kenyans have recently been awarded £21.5 million from the British government over its role in the quashing of the Mau Mau uprising, in which many of the Kenyans were tortured or abused.
Yet there remains other African countries which have for many years requested reparations for age-old atrocities, to no avail.
Greece’s claim for $ 300 billion from Germany could add more weight and legitimacy to such a movement. Greece could form a multilateral block to which other countries can join, and together they would request (perhaps via the UN) that the economic imbalances created by war, colonialism and other exploitative practices, which saw some countries gain a huge unfair economic advantage over other countries, to be squarely addressed by reparations and other measures.
5. Syriza’s socialist policies can provide a template for African countries to take charge of their economies
The compromise which Varoufakis is seeking is justified primarily because there has been a long overdue need not only in Europe but across the world to balance up the economic situation of countries, whose economies were disadvantaged by circumstances beyond their control.
For example, many developing countries have for long suffered the effects of illicit financial outflows (according to some estimates up to US$1 trillion annually) but have been unable to raise the funding, drum-up the support, or have the partnerships that would enable them to break free from the malaise created by such chains. The effect is that they fail to raise sufficient funds from tax collection to be able to invest in their economies. So there’s under-investment in almost every important sector of public spending from infrastructure maintenance and development, to education, healthcare and national security. The consequences are that crime is usually on the increase, lack of infrastructure deters foreign investment (which affects the number of jobs), and lack of resources in healthcare means most hospitals have no medicines or sufficient staff and therefore fail to function.
Today Greece finds itself in a position where a multibillion dollar bailout has gone to private and European banks (exactly the same people who created / exacerbated the 2008 -2009 financial mess Europe finds itself in). Those banks and other corporations are often the prime candidates who make illicit financial outflows happen, and who on top of the tax evasion they are already notorious of facilitating, charge high interest which impacts much smaller businesses. And yet innocent people are being forced to pay for the mess others created??
If Greece can partner with Russia and China (whose new Development Bank could be useful), and various institutions in emerging economies, they could create a strong enough lobby which will have the authority to demand a change of the financial rules that benefit corporations over developing countries.
One would hope that Greece reaches a new deal with its creditors on April 24, when the Eurogroup decides whether to accept the country’s new debt proposal. But irrespective of whether such a deal is concluded or not, maybe it’s time to look south.
/This article was first published on African Patriot Website/
You can be a Christian, Muslim, Hindu, Budhist or Atheist, or none of these, but one thing you will all agree to is this: that there is no justification whatsoever for a leader of a country (his family, his ministers and families) to go overseas to a wealthy country to seek medical treatment, while his country’s people – who elected him to power, and most of whom are poor – make do with underresourced, understaffed and in some cases dangerous hospital facilities at home.
Yet this is what has been happening in Africa for at least 50+ years. Yes, thats right: 50 bloody fat years. Dictators and the anti-colonialist strongmen of the colonial and post-colonial era did it, at considerable public expense. Now their successors – politicians of governments in multiparty democracies who like to dress up in expensive western clothing and are accustomed to lavish lifestyles are doing exactly the same. While their poor countries continue sliding down, becoming poorer.
To the list of Zimbabwe, Malawi, Ethiopia and Zambia, add all the others you know of, whose leaders are guilty of this behaviour.
‘Another area that shows how a people with resources end up exploited and deprived by their own government primarily, is health. Like Everything else in Africa, the health facilities have continued to shrink such that today one cannot even tell if anyone cares any longer about the system – its perpetrators and the victims, government officials and the public. One cannot help wondering then why all in Africa must keep rotting away in spite of the quality manpower and all else that the continent has to offer in every area of society, if not because of a system of government, borrowed from imperialists, that alienates instead of uniting the citizens. But then it dawns on one again, that this decay in the area of health is the case because the corrupt leaders can afford to fly to foreign nations for medical check-ups while the wretched of their nations are left to make do with sub-standard medical care. Why must a president, his clients, and members of the their families leave their country for medical consultation overseas instead of investing wisely by building and equipping hospitals that would benefit their nations? The answer is simple: most African leaders are not patriots and are unfortunately equipped with a weird sense of self-importance that only has meaning when they see others around them without the facilities they enjoy, albeit criminally in most cases. Ofcourse, but for greed, it would be easy for the World Health Organization and other international institutions making so much ado about helping poor African countries to start by making it impossible for African leaders to get medical treatment anywhere else but in their own countries. …’
Instead of trekking to Asia, Europe or the US for treatment, why not spend your country’s meagre resources upgrading its healthcare infrastructure, so that it is on par or better than the health services in Europe, Asia or the US? If Cuba can achieve that, with all the pressure their economy has been under the last 50+ years, why can’t African countries do the same.
Surely, medical equipment is not the obstacle, because there are many sources of alternative approved medical equipment which is cheaper yet just as functional as much of the equipment in first class hospitals around the world.
Money also is not the issue because most of these governments lose hundreds of millions (if not billions) to corruption and other factors, meaning the money is there, it’s just being mismanaged.
So what then is the problem? Ian Taylor, Extraordinary Professor at the University of Stellenbosch, South Africa, writing on the South African Foreign Policy Initiative (SAFPI) website has this to say:
Of the ten African heads of state that have died of natural causes in office since 2000, only two actually passed on in their own countries. And of these two, both had been receiving medical care abroad and effectively returned home to die. In other words, not a single African head of state who has died in the last ten years of natural causes had any confidence in his own country’s healthcare.
The phenomena of African presidents dying abroad is truly a disgrace and reflects the failure of Africa’s leadership to seriously invest in healthcare provision. Quite simply, in many African states the elites have not bothered to provide public health leadership and management, have not invested in sufficient health-related legislation and the enforcement of such laws, have proven inefficient in resource allocation and use, and have systematically undermined the provision of adequate national health information and research systems.
A failure to invest in national healthcare systems has then led to extreme shortages of health workers, exacerbated by inequities in workforce distribution (with a strong urban bias) and subsequent brain drain.
Leaders haven’t bothered to fix hospitals or bring in legislation that will protect those hospitals, to ensure that they are well resourced and well-funded, or otherwise up to scratch. Taylor goes on to note that:-
Rampant corruption in procurement systems and inefficient supply systems then combine with unaffordable international prices to produce shells of “hospitals” where one has a greater chance of contracting something extra than being cured of one’s existing ailment.
So then, why haven’t African people taken their leaders to task about all this? Taylor again:
Elite survival comes from access to rents to distribute to patronage networks and thus retain key support, not on investing in services. Investment in such national infrastructure and the advancement of policies that benefit broad swathes of the population is not required in many of Africa’s neo-patrimonial regimes.
This has a direct impact on policy formulation. Why bother spending money on building and maintaining hospitals (or schools or universities) when one can fly to European hospitals to be treated—or send one’s kin abroad for education? Within the logic of many extant African regimes, it makes no sense to invest in public ventures. That’s what the gullible donors are for!
So African politicians know that even if they don’t fix hospitals or bad infrastructure, so long as they pay chiefs and other power brokers who help them maintain popular support, their hold on power is not threatened. Further, their irresponsible logic takes their people for granted by assuming that donors should be the ones fixing the hospitals? As if the people in those countries voted for donors…
But if not impunity and contempt for their own people, what else explains leader’s like Mugabe’s actions (see this silly speech here, which he gave after returning from a holiday in Asia – where he and with his family received medical check-ups and underwent treatment)?
What explains Mugabe’s behaviour when others, including one ZANU PF politburo member and former Midlands governor, Cephas Msipa, have refused to seek medical treatment abroad:
“Do we really have to go outside the country for treatment? We should be proud of our own health care services,” he said during the official handover ceremony of a US$1 million casualty ward at Gweru Provincial Hospital last year. He went on to say that:-
“Our doctors and nurses are capable and compete well with other health professionals in other countries. There is no need for people to go to India and other countries to seek medical attention because our own practitioners are equally competent.”
Now, I’m not saying that circumstances will not arise that necessitate the expertise of an overseas specialist in a particular medical area to be sought. Indeed expertise from specialists in various medical fields must be sought. But that’s not what is happening across Africa.
Another commentator who goes by the name Dr Given Mutinta says that medical trips abroad are ‘used as an opportunity to thank ‘good’ bootlickers to the big shots in government.’ Writing on the Zambian Watchdog he says:
If truth be investigated, how many government officials would want to use personal money to pay for medical treatment abroad when they leave office, if at all they would still have the money they are stealing? Besides, how many before coming into power sought medical treatment abroad? What has changed in the past three years they have been in power that they cannot be treated locally?’ noting that ‘These medical vacations are also a scheme government officials are using to embezzle public funds‘ an allegation I have encountered numerous times. He poses the question: ‘What are the kingpins at the Minister of Health, Dr. Joseph Kasonde and Dr. Chitalu Chilufya doing to promote local capacity, strengthen the health sector, improve fiscal policy on medical equipment and monitor medical tourism?’
I think Africans must ask such questions to their public officials. Upcoming and progressive African leaders need to take note of these repugnant anomalies in African politics, and find effective and sustainable ways of preventing what is not only a wanton waste of public resources, but also a violation of the trust of African people. To do this obviously means enacting legislation that will not only protect the healthcare sector, but will ensure that doctors and nurses are paid living wages that remunerates them adequately.
Former Malawian president, Joyce Banda attending the 10th Conference of the UN Global Compact on corruption in New York.
1. Get to the bottom of the Cashgate Scandal: Not only regarding the K20 billion mentioned in the Forensic Audit report as the estimate that was misappropriated during Joyce Banda’s tenure, but also the K91 billion we were told by Joyce Banda’s government as the sums that went missing under Bingu Wa Mutharika and Bakili Muluzi’s regimes. For example this exercise could involve legislation to ensure that funds illegally wired abroad are recovered, and failing that, assets of those convicted are confiscated.
If theft by public officials in Malawi – whoever they may be – goes unpunished, Peter Mutharika would have lost a golden opportunity to bring real change to Malawian politics, and he would have lied when he said that there would be “zero tolerance to corruption, fraud, theft and any other economic crime”. In the end, History will judge him to have been a failure because Malawians will continue to be hounded by poverty, while an elite llive in luxury.
Thus, if some of the misappropriated funds can be recovered, minimally it will give Mutharika some credibility that he is serious about corruption, and will also signal to donors that his government is a different kind of government. Anything less will question his integrity, and if he merely focuses on attacking former president Joyce Banda, discerning folk will immediately know that there is something amiss.
2. Restrict the Import of perishable goods that can be grown or produced in Malawi : And increase taxes on foreign processed goods like Coffee and Tea, which can be processed locally within Malawi. It will improve local industry, creating jobs, and stimulate the agricultural sector. Malawians must look at the bigger picture – the Malawian Kwacha (local currency) will struggle to be strong or maintain value if there is a disproportionately high number of imports (in value) over exports. In other words, if Malawians continue to pay millions of dollars for their imports, but do not receive equivalent or better for their exports, Malawi will continue to struggle to maintain the strength of the Kwacha. And this will have negative knock-on effects. A good way to reverse this trend is to buy from abroad only those goods which cannot be sourced locally. To import only what is absolutely necessary. This can be done with legislation and by reforming customs agencies with the new policies. Further, increased security at borders will ensure that these goods are not being smuggled in. Thus, no importation of coffee, tea, eggs, tomatoes or milk from outside Malawi. No oranges or lemons from South Africa. No more imports of grain, beans, peas or processed sugar. Everything that can be made within, must be sourced from within.
It’s not going to be popular with donor countries, or those that profit from importing goods which can be sourced in Malawi. But such an initiative will help local producers, and will begin to rebalance the trade imbalance that currently exist between Malawi and its export markets (thereby retaining forex), and in the long run is a good strategy for Malawi.
“Trade among African countries is very low. Last year, it stood at 10 percent of the continent’s overall trade,” Valentine Rugwabiza, deputy director general of the WTO, which seeks to reduce barriers and promote aid for trade, told IPS. More here
3. Encourage Trade with other African countries: There are goods in Zambia, Zimbabwe, Tanzania, Botswana, Kenya, Mozambique and South Africa which Malawi currently buys further afield. Policy makers should draw a list of 50+ categories of products which Malawi currently imports from outside the African continent, which can in fact be imported more cheaply from nearby countries. I know there is a debate regarding quality of certain products sourced on the continent, but it is in Malawi’s best interest to eliminate waste and reduce the cost it pays for foreign goods. The added bonus being it will improve trade relations with Malawi’s neighbours.
Czech Republic
4. Encourage Trade with Eastern Europe Malawians have more things in common with countries in Eastern Europe than they know. Most Eastern European countries (or more correctly – the lands that became Eastern European countries) found themselves at the mercy of invaders from Napoleon to Hitler (this was after already being oppressed by Monarchies of every shade for hundreds of years – see this detailed timeline), and after the second world war, were under occupation by allies countries of WWII including Britain, the US and Soviet Russia. In the process they saw their borders altered and their resources plundered (as an example see this link). It didn’t end there, then came Eastern European dictators (the likes of Nicolae Ceausesc – who it is said kept his own personal witch, as he ruled Romania with an iron fist) who completed the cruel circle of oppression. In comparison, countries like Malawi, Zambia and Mozambique had the similar misfortune of having their borders carved by narrow-minded/ bad-intentioned colonialists who had no long-term interest as to the future prosperity and practicality of these new African countires. Not only have these African countries been plundered ever since, but the geographies of Zambia, Rwanda, Burundi and Malawi places them at a particular disadvantage in comparison to African countries with a coastal line.
5. Development loan from the Africa Development Bank, China, Norway, Russia or Brazil : To be used for
(i) Investment in low-capital high growth sectors like Information Technology (IT Outsourcing, Application Development, IT security) and telecommunications (optical fibre networks, development of data centres)
(ii) Investment in foreign markets, blue chip companies and emerging technologies with potential – a move that could provide capital to the government.
(iii) To invest in Education (broadband internet to be installed in 50 % of schools), teachers wages paid on time, purchasing educational resources, upgrading schools in rural areas, rewriting syllabi and improving the standard of education across the country.
(iv) To improve transportation links, including maintenance and construction of roads in rural areas, increased network of rail links and improved airports ( e.g. Mzuzu and Mangochi airports to be enlarged and developed, and made into international airports, Malawi Airlines to fly to more destinations)(v) To create business centres in the major cities of Blantyre, Lilongwe and Mzuzu to encourage innovators to start businesses.
(vi) To help young people in terms of technical training (Increase the range of Diplomas and short evening courses offered in Technical colleges and Universities across Malawi) and using Equipment Import loans (i.e. loans to individuals importing equipment from India, Brazil, Dubai and China in select sectors, especially those sectors with a high potential to create employment)
In order to ensure the security of such funds from misappropriation, it is vital that each contractor be paid directly by a fund management company created from members of the civil society, development organisations, experienced fund managers and representatives of the major political parties. Minimally this will ensure that suppliers are vetted and are not in conflict of interest relationships with any leader, political party or authority. Thus, funds will not be paid into government accounts, instead they will be paid directly to suppliers, to those responsible for building the infrastructure, to the manufacturers of purchased equipment, suppliers of educational resources and such like.
Further, to increase transparency, each loaning partner should be at liberty to place auditors within the fund management company to monitor and report on the use of funds. Finally, a publicly accessible resource (website) should be established to show how the funds are being utilised.
6. Encourage Local Community projects: The Mondragon Experiment has been proved as a success, and so far works well. Why not try a similar initiative in Malawi in an attempt to create standalone local communities that do not depend too much on the state?
7.Support Federalism One of the main reasons countries such as Germany, Switzerland and the U.S. thrive is that their Federal Structures allow developmental decisions that benefit a commune to be implemented seamlessly without political interference.
Right now, everyone is looking at the central government in Lilongwe for the answers to Malawi’s woes. Unfortunately, for a country with the scale of problems which Malawi has, its near impossible for economic development to occur quickly enough if every development initiative is dictated from a central hub.
Running a country is not the same as running a law firm or being CEO of a private company. And unfortunately all of Malawi’s previous presidents – other than the founding father, Dr Hastings Kamuzu Banda (who closely observed public policy not only in Ghana [which is currently performing comparatively much better than most African countries] but also in the developed countries of the US and Britain), have not had the winning combination of a good education, extensive experience over a long period of time, and surrounded by an educated and capable team.
Further, among the 193 legislators in Malawi’s Parliament, are a few bad apples whose motives are questionable, if not downright dodgy. Thus, while there are many examples across the world showing that devolved powers from central government to local governments have achieved admirable levels of economic development, without a strictly planned economy, the odds are stacked high against such a unitary system from succeeding. It is in President Mutharika’s best interest to embrace Federalism, not least because it would divert some of the fire his government is currently receiving. In fact I think it would pacify some sections of the opposition, and create healthy competition among the new ‘states’.
8. Invest in Solar Energy How can investors have confidence in your country if power cuts are commonplace?
At some point we must put an end to power cuts.
Solar Power could give Peter Mutharika’s government the energy he needs to develop Malawi. I know from my 2010 trip to China that there are UK companies who buy solar panels for less than $200 in China, and sell them in the UK for upwards of £1500. The margins are good, but I’m not talking about making a profit here. The Malawi government can construct solar farms using the roofs of public buildings, including Universities (which I’d imagine can be policed better than a rural located farm). In a country that gets plenty of sunshine, solar power could help supplement hydroelectric energy which Malawi currently depends on, and put an end to power cuts. This is a far better bet than wasting money on importing power from abroad.
9. Complete the Shire-Zambezi Waterway Bingu Wa Mutharika was right on pursuing this major project, and Peter Mutharika must dedicate resources to see it through. It will lower the price of goods coming into Malawi. Will improve trade between Malawi, Zambia, Zimbabwe and Burundi and will create massive employment.
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10. Dig boreholes and donate water pumps to farming communities Water shortages, in a country with a fresh water lake over 360 miles long? How about boreholes as a fallback option? Just in case the water utility companies continue to fall behind in terms of serving their communities. An added advantage for such an initiative is that the boreholes can also be used to provide water for agriculture during the dry summer months.
Last week a well written article appeared on Al Jazeera arguing against the false and somewhat misleading picture of Corruption that is often put out by the western media. In it, it was suggested that over $900 billion a year is lost from developing to developed nations through tax evasion and illicit financial outflows. While this is a major problem for Africa, as was pointed out several years ago by Kofi Annan here, another reason which results in these outflows is that very few major industry (million dollar revenue generating) in Africa is in fact owned by Africans.
The combination of imperialist colonial legacies, poverty, a lack of capital, insufficient education, corruption, plain hypocrisy and other factors has resulted in a state of affairs whereby even capable Africans find it hard to buy into and run their continent’s biggest industries. While there are many Africans doing well in business throughout Africa, they are by far in the minority, and comparatively too few of them on the ground, than say the number of Canadians who own and control multi-million pound ventures within Canada, or say the number of Portuguese who own and control multi-million dollar companies in Portugal.
Thus, this picture inevitably creates an opportunity or gap for foreign corporations and investors to come in, and sweep away ownership of the whole lot – armed with huge amounts of capital. No surprise the profits end up everywhere else but in Africa…
In my view, far from the land grabs of Robert Mugabe (which others have tried to justify – see here and here), another reason in support of more Africans owning their continent’s industry is that doing so could mean that large amounts of money remain on the continent, to be used for education, health -building hospitals and providing good wages for doctors, eliminating poverty, fighting corruption, policing and security, building infrustracture, improving the plight of women, investment in the youth, creating jobs, etc. It means essential capital is not being wired out to already rich countries. This in my view is a better strategy against poverty, than aid and handouts, whose monies are comparatively miniscule to the monies being siphoned from Africa.
According to the website of Britannia Mining Inc (a US company with operations in Canada and Malawi) here, the Nthale Iron Ore surfacedeposits which they found before 2009 are estimated from their geological survey to be at least 4.6 million tonnes in quantity. As often happens with these things, especially if we focus on the word ‘Surface’,in practice the deposits can be far larger than the estimate.
Last Friday, on the 7th of February 2014, before close of trading the price of Iron Ore on the international market was hovering around $125 per ton (see latest figures here). Whichever way this price goes (whether up or down) the next few years, 4.6 million tonnes at $125 per ton is still worth at least $575 million, a hefty sum by any measure. Even if we go with the 68% iron ore component indicated on their website, that’s still worth $391 million
Suppose Britannia Mining invested $100 million into Malawi, to cover processing the Ore, overheads including construction, logistics, wages, corporate governance activities, etc, (and it was proved that they had indeed invested such sums because sometimes businessmen overestimate the level of investment when the truth is much lower) I’d think the benefit to the Britannia would be significantly higher and disproportionately in their favour than in the favour of Malawians. Looking at previous examples of resource conflicts involving corporations in Africa, I seriously doubt that first they would invest such sums. Further, I doubt that Malawians or the Malawian government would benefit equally or at least proportionally from the resource. Which begs the question, who actually owns the resource?
As many others have opined elsewhere (see this for example), the unrestrained greed and unguarded capitalism of western businesses in Africa is causing a lot of damage and harm to Africa, and Africans. And that’s even before we get to what China is doing…
Even if the market price of Iron Ore dropped to say below $100, (say it dropped to $65, which is highly unlikely – the last time it hit $100/ ton was back in Aug 2012, and that was only for a very brief period of time), there would still be at least $300 million worth of deposits to be mined.
Don’t you think if the company that was exploiting the deposit was owned or part-owned (say 50%) by the Malawian government, or a group of Malawians, that the majority of the benefit of the resource would remain in the country, as opposed to being wired out of Malawi?
Post Paladin, and the tax outrage they caused when it was revealed that the Malawian tax authorities were missing out on tax revenues worth $200 million, how much tax have Britannia paid to the Malawian government so far, and how much have they made out of Nthale? The reason that question is crucial is because no level-headed Malawian is keen to see Malawi descend into a chaotic easy target where rich corporations (which are already wealthy and well resourced) come into the country and make billions, while the local population remains poor.
And if governments across the world do not speak against unrestrained greed, who will, seeing most governments in Africa are headed by people who have neither the will nor inclination to do so…?
In my view, Africa needs trade partners who will help rebuild the continent, and not those looking for a quick buck, irrespective of the ethics of the means of acquiring that buck.
If you are looking to make money quick, stay away from Malawi. We don’t want get rich quick capitalists or investors. What Malawi needs are Responsible Capitalists, as opposed to a Liberal and unguarded Capitalists – a badge which brings to mind Halliburton’s Iraq heist (or even ILLOVO’s tax avoidance fiasco – ILLOVO [which is British owned via Associated Foods Limited] is company that last year posted a 43% rise in profits per share), an incident which it is fair to say has probably been responsible for not only much suffering, but also global unrest.
Depending on who you ask, its undeniable that corporate wrongdoing is currently happening, and the continent of Africa is being systematically ripped off. Yet there has to come a time when the tide turns, and the wrongdoing is forced to stop (sadly it’s not going to stop voluntarily). In the words of the African Development Bank president Donald Kaberuka here:
“The reality is, Africa is being ripped off big time …“Africa wants to grow itself out of poverty through trade and investment – part of doing so is to ensure there is transparency and sound governance in the natural resources sector”
In my view this means rectification, and possibly includes learning lessons from those whose policies do not exacerbate the already bad situation; lessons from the likes of Brazil instead of blindly accepting unfair and discriminatory terms from organisations such as the IMF – whose policies towards the poor countries couldn’t be said to be favourable for local ownership of industry.
Maybe Malawi’s mining sector has more to learn from the likes of Vale and Debswana. Debswana is 50% owned by the Botswana government and 50% owned by De Beers. Vale is the world’s biggest producer of Iron Ore, and their profits recently doubled (Interestingly, in the same article Vale says the price of Iron Ore would hit $130 per ton, which it did, confirming the plausibility of my above little theory). They’ve seen an increase in production, which last year hit 73.4 million tonnes of Iron Ore. They are also a major tax contributor to the Brazilian government, with recent tax payments of $9.6 billion, far greater than anything any corporation have had to pay to an African government.
