Creating Large State owned corporations

They have them in most developed countries, and there is no reason why Malawi shouldn’t have a few.

For example did you know that Parpública, the Portuguese behemoth founded in 2000 and with assets worth US$13 billion, and which owns Air Portugal is a state-owned enterprise?

In the quest to find alternative solutions of economic development, the very first thing our country needs, maybe besides a mindset change, is to raise significant amounts of Capital.

This can be done in a number of ways, but probably one of the best ways is by issuing Sovereign Bonds. Using Sovereign bonds can lessen the debt burden on Malawi, and prevent the country ending up in the debt mess spiral that countries like Zambia and Angola have found themselves in.

This is because aside from the fact that the government would set the terms and conditions of the Sovereign Bonds issuance, it would also allow domestic Investors to invest and would not disproportionately make the country beholden to a foreign financier, private or public.

The reason we need such Capital is to make large strategic investments into infrastructure and equipment, which with proper planning and execution can enable Malawi to manufacture certain products which our people need most (domestic market),  but also for foreign markets, and for which we have a steady and affordable supply of raw materials.

So for example, we can use such Capital to buy a refinery to manufacture Ethanol for use in the Pharmaceutical industry and in alcoholic beverages, and for use as an additive in Vehicle fuels, by expanding and starting one or two additional sugar plantations and processing plants as the ones they have in Dwangwa and Nchalo, in a similar rural area. The ethanol product can also be exported to neighbouring countries cheaply undercutting their current supply chains, but creating a new revenue stream for the Government.

The waste products from the sugar plantations (bagasse https://www.sciencedirect.com/topics/agricultural-and-biological-sciences/bagasse ) can be used as a biofuel, reducing our country’s over-reliance on firewood – which is worsening deforestation situation in Malawi, and is responsible for the numerous floods we experience almost every year.

Similarly, a large Sheet Metal Fabrication factory could be established to manufacture Iron sheets for roof houses (malata) to be used to supply hardware stores across the country.

Both the Sheet Metal Factory and the new Sugar Processing Plant would create employment for thousands of Malawians, and can be scaled intonmuch bigger operations if required. New and organised dwellings and townships can then be created around them. 

This is one way of creating large state owned corporations that can give jobs to thousands of citizens, creating employment across the country.

There would be other added benefits, such as more equitable spreading of the prosperity of the cities into the rural areas, decongesting the cities of traffic, and reducing migration to cities – as more working-age people would choose to live closer to these rural factories – where they can find jobs.

Finally, it would accelerate the provision of decent housing, water, sanitation, communications, energy and transportation infrastructure to the rural areas – factors which would contribute to the fight against poverty.

The Secret to successful state-owned enterprises is how they’re run (The Conversation)

More interesting posts at

http://malawiace.com

Thoughts on the sale of Malawi Savings Bank (MSB) , and more

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.

North_Darfur_IDP_malnourished_childDisregarding 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.

greek-bailout-fund2Countries like Greece. Countries like Malawi.

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!

Quantitative Easing, Grexit and the debt in the Eurozone: Of Botswana, Bushmen and Baboons

QE&friends
The winners and the losers of Quantitative Easing

Debt and Money are volatile matters. Deal makers or deal breakers. It doesn’t matter whether it’s within families, between countries, between banks or among members of some financial union where the fracas occurs, but when money is involved, a lot hangs in the balance.

When money is misappropriated, people take opposite positions and begin arguing. And when debts are not repaid, or loans are withheld…actually any financially related disagreement, the opinions expressed are often filled with raw emotion; wrath, hate, anger, contempt, apathy, criticism, it’s not rare to see more than just a hint of schadenfreude. Because, well, its money – our survival has been made to depend on it, and so we fight tooth and nail for it. Besides some of us are just too greedy.

This bickering is especially more pronounced online. Behind aliases, nothing is held back; all the bridges are set on fire, insults traded liberally complete with icing, everyone holds tightly to their narrow views, few are available to inject some unifying common sense, courtesy is alien; if these people knew each other, or if they lived in close proximity to each other there would be fights, many fights. Someone would get physical, and at least another would get hurt.

euro-dispI find that in such spheres, the commentary beneath an article can be more interesting than the article itself. And you can probably have your daily dose of entertainment by merely browsing through what everyone thinks of the issue. At least I can.

And you rarely see such kind of raucous debate in real life, other than in silly comic sketches.  But it rarely happens in current affairs programs churned out by the big media houses. Unless you are watching proceedings of the debates in the house of commons. Or pre-election debates – in which case some drama is not rare.

But online, squabbles happen a lot more frequently (as the comments on this link (via FT) / below  demonstrate). The result is priceless:-

101 2 3 4 5 6 7 8 9  11…the wit. Needless to say my favourites are the two references to Bushmen and Baboons in Botswana. Genius.

bnkr

Why Greece should build strategic alliances with African countries

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.

GreeceDebt
Source: Economist

GreeceLoanRepayments
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.

Greek finance minister Varoufakis in Germany
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.

Yanis-Varoufakis-om-eu

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.

According to Ben Wright, writing on the Telegraph:

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.

For example, the UK gains £8.5 billion annually from overseas students .

[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?

Greece-Exports

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/

Million dollar bonfire: a tale of Ivory & Debt

 

APTOPIX KENYA ILLEGEL IVORYby Mva Camverzeener

Lets sign a petition to urge our president not to burn the said 4tonnes of ivory he is supposedly burning tomorrow. the decision defies logic for any sensible individual who knows the dire state our economy is in. here are my facts:
– Ivory from elephants is not an illicit drug or neither is it contraband whose trade by law is restricted. There are legitimate markets of Ivory out there and government must source these markets and exploit them

– At the current international market value of $2,100 per kg of raw ivory, government stands to make $8,400,000.00 that could be used to alleviate many problems we face. This money can be used to shore up our already over stretched national budget, procure food and or help the recent flood victims with winter cropping for their sustenance, buy drugs in hospitals….the list is endless.

– there is no logic in burning that ivory all for the sake of pleasing a few powerful and influential white environmental lobbyists who have never even seen an elephant in their lives. GOD blessed us with these animals and it is up to us to decide what we do with them or their products, as long as if we are not negatively impacting the environment.

– Not all those elephants died as a result of poaching, some died naturally, does this mean that we should not benefit from our GOD given resources? besides, any proceeds of illegal activity which can be passed on or disposed of legitimately must be done so. Why then not burn houses built with cash-gate money aswell??? Government should dispose of the ivory to legitimate buyers and account for the proceeds.

– Ivory never killed anyone, it doesn’t have any known health risks, but Tobbacco kills millions around the world every year. we, in essence, export death every year, and here we are, with ivory, njala ndi mavuto ena ali pakhomo and we want to light up $8,400,000.00 in flames????or is it an African thing to go beg from the white man even when we have our own means of making legitimate money?

– Burning the ivory will not stop the poaching, nope. it has been tried in Kenya for a long time and the poaching never stops. Sell that ivory, buy cars, sophisticated guns and equipment for the game rangers at the national parks to match the ever increasing sophisticated methods of poachers and in a few years time we wont be talking of poaching on a large scale and our elephant and other wildlife numbers will increase.

lets for once look at our needs, and not the wants of the west.

** ~ ** ~ ** ~ ** ~ **


 

Among the comments beneath the article were :

Rest we forget hw money generated from such transactions disappears without trace

and another person who said

90% of the money will end up back in his and a few other fat cats’ pockets… there won’t be proper accountability, I say it won’t make any significant difference… therefore… FIRE BURN!!!.. BORN IT OP!!!…. FAYA FAYA FAYA!!!…


 

Comment

My view is that destroying a commodity only causes that commodity to be ever so rare, and therefore it’s price increases, attracting even more poachers who are incentivized by the high price? I think that’s what an economist would say.

So on that basis alone, it makes sense to flood the market with the commodity, be it gold , platinum, silver, oil or Ivory, because if the market is flooded then it’s price can go down… although with Ivory I’m not too sure yet how you would do that, since flooding the market would probably mean more dead elephants.

Having said that I believe job creation and long prison sentences are the only two most effective deterrents of dealing with poachers. These people go there to kill elephants partly because they have no proper employment and our parks in Malawi do not have proper security.

Global Justice Now

http://www.globaljustice.org.uk/campaigns

Interesting website and community that has worthwhile campaigns worth looking at. I like their call to Activism which goes like this:

‘Global Justice Now is made up of a network of activists and local groups full of people like you who take action in their communities to challenge corporate power and the policies that cause poverty and inequality all over the world.

Whether it’s stopping water privatisation or unfair trade deals, campaigning by our local groups has been central to making sure the interests of ordinary people aren’t trampled by those of corporations.

Global Justice Now groups do creative street campaigning, lobby politicians, get media coverage and organise local events such as film screenings and talks.’

For the avoidance of doubt :

  • There are policies which some governments adopt which cause Poverty and Inequality. Having been born in a third world country, and having moved to Britain, and seen how deprived and disadvantaged people are treated here, having analysed and compared and contrasted… having observed and learned ‘how the world works’ I know this is true.
  • Similarly there are policies that worsen poverty and make escaping the debt trap much harder.
  • There are corporations out there trampling on poor people, and whose chief motive is the generation of as much profit as possible above all else. These are the kind of companies which are happy to have ‘tax arrangements’ in tax heavens hiding hundreds of billions, while the public purse suffers; with the result that poor people, including single parents, the disabled, old people, the unemployed and other disadvantaged groups are subjected to an austerity onslaught that worsens their situations even further. In a week where Britain’s Labour leader has been unfairly criticised by tax-avoiding business moguls, let me get this one point absolutely clear. Most Activists are not in favour of communism, or anarchy or an end to free market capitalism. Thats not what they want. The main contention of most activists is that the current system is not working for the majority, simply because it’s increasing inequality, and has given a license for certain sectors (banking, corporations) to abuse the public trust. With the government acting like a trafficker in the middle, facilitating the abuse. Thus, in my own case, I’d favour RESPONSIBLE CAPITALISM that has humane socialist elements in it. Elements that allow businesses to make money, but that sufficiently protect disadvantaged and poor; that protects the voiceless, and helps them become resourceful. Not the current system which attacks, demonises and victimises innocent people, and which ironically, works so hard to keep them in poverty. In other words why don’t we have a ‘do unto others as you’d like to be done unto’ system.
  • There are certain corporations who in concert with selfish, corrupt and greedy politicians create a toxic combination that leads to death, violence, crime, poverty and much suffering. Again, if in doubt ask any better-informed African.

Global Justice Now must be supported and commended for the hugely important work they are doing.

 

Empathy – the key to societal harmony

Umuntu ngumuntu ngabantu – it means you must serve your fellow man. You see? You must respect and serve your fellow man faithfully. That’s what, because without their support you can never progress. That’s what it means. – Nelson Mandela

Anyone who has experienced a certain amount of loss in their life has empathy for those who have experienced loss.  – Anderson Cooper

Look, I’m a cancer survivor, all right? So I have great personal empathy for people who have pre-existing conditions and can’t get insurance. – Carly Fiorina

There is a man who lives near my mother’s house, who is blind. This fellow also happens to attend the same church which mother belongs to, and I see him almost each month seated at the bus stop, or walking around the neighbourhood, assisted only by a white cane.

I can’t even begin to imagine what challenges this man has had to face, or indeed what challenges his condition presents him every single day. Thinking about it alone gives me a chill, although something tells me his experiences have got to be unpleasant, very hard. Not being able to see clearly, or not seeing at all, the sunlight (or in the case of Manchester – the grey skies + rain), the landscape, birds, people, the innocence on a child – the smiles on their faces; cars, television…the world; needing help with cooking, cleaning, shopping, etc; a life in which just being able to move about in one’s own house is probably a bit of a challenge…the apparent helplessness, I just can’t even begin to imagine it.

And while there is research out there that suggests that people with blindness have heightened senses, (see other links here and here) as the above links try to explain, living with blindness is still something that those of us who have sight can’t completely comprehend, even after a visit to Dans Le Noir (see another review here).

A different example was given to me by a friend, who quoted this story which includes the following paragraphs:

“The UN identifies long-term solitary confinement as a form of torture and the effects on Warsame were clear. He became apathetic, lethargic and depressed. He rarely left his cell to exercise in the locked cell adjacent to his own. The social isolation was tortuous and agonizing.”

“At the sentencing, the judge noted that he had “seen nothing in the record or the last five years of proceedings demonstrating that Warsame poses an immediate danger.” Why then had he refused to suspend or modify the SAMs?”

“While the judge also observed “nothing that adequately demonstrates that Warsame was part of a specific plot against the United States, and very little that suggests he was especially useful to Al Qaeda,” he refused to impose a sentence of time-served, instead adding another twenty-four months, for a total of ninety-two months, or almost eight years.”

“The judge’s deference throughout the case to the government’s bloated claims of national security is disturbing. Yet evidence indicates that the court’s deference is not aberrational but replicated in other terrorism cases in US courts. The plea deal suggests that Warsame never posed a security threat. That conclusion is reinforced by Warsame’s deportation: allowing him to simply leave the country contradicts the notion of immediate danger the government repeatedly asserted Warsame’s unmonitored communications posed.”   – Article written by David Thomas, Criminal defence lawyer, How Mohammed Warsame Became an Accidental ‘Terrorist’

This post is not about blindness, unique restaurant experiences, the challenges people with blindness face or how US law treats suspect terrorists.

Instead, in my daily life, I have often encountered or heard views from capable young people who feel a sense of helplessness. That the world around them does not understand their circumstances, and is incapable of helping them.That their plight is solely up to God. They have little or no role in turning their own fortunes.

It causes me a lot of sadness.

They feel left out, that nobody seems to care, that they are powerless, with no hero either in their family or in the leadership of their society, region, country who can confront this helplessness that is causing them much stress, and slowly dragging them deeper and deeper into depression. I meet youngsters with a deep sense of deprivation and failure; who think they have no hope and can do absolutely nothing to transform their own lives for the better. Most are Africans, or of African heritage.

It’s one thing meeting a disaffected person, and giving them advice (even good advice) that could help them plan how to get out of their hardship zone, it’s quite another thing assisting them, step by step, practically and over a period of time, in overcoming their challenges. I find the latter more helpful, but often the constraints on my own life curtails how much helps I am able to offer; that wretched feeling when you know precisely how a certain situation can be tackled, made good and turned around, having tamed similar situations in the past, yet you are unable to offer much help because of your own problems…

Which is why I have great respect for organisations such as Turning Point. However, most of these youngsters I meet doubt whether such organisations can do much to help them, and in fact tend to think such organisations are only targeted to former addicts, or people have been made homeless or have met some domestic catastrophe…

The problems I hear vary from the absence of motivation and financial constraints, to frustration with leadership and life; including family entanglements and baggage from the past which they can’t quite separate themselves from, or reconcile with the present. Last week, a fine young man wrote me:

I concluded one thing and it’s how us black people as a whole lack hope. We say all this stuff about our belief in God and the love and faith we have for him. But we lack hope. We allow ourselves to be forever imprisoned by these unnecessary emotions of hate, greed, complacency and inconsistency. We are right now incapable of having the dreams that our former leaders fought with and had till they died, Kamuzu had a vision, the same way Mandela had his. That’s why they were good friends. But this generation we struggle with conviction, for we are too busy stuck here on social media websites posting all these things and having discussions. It is as if we don’t have what it takes to take that step forward for change. … But it goes back to our lack of conviction as a whole. We lack that power that our past ancestors had before, we lack that vision. Africa now has no dreamers but it is … mercenaries who dream to keep Africa at bay, and because we don’t have what it takes to dream big and beyond, to trust God for our talents we are stuck here, writing bitter statements and statuses about what’s happening to our brothers and sisters. I ask myself everyday if I care, and what should I do? But the inner spirit within me reminds me that it is not up to man to say I will change the world with my own works. … I don’t have that will power within but I know where it comes from, only God…

To me these kinds of statements come in three main forms. Grievances against general trends within society their present society, and back home in Africa; grievance against a certain type of thinking / practice, which in some forms manifests itself in”…too busy stuck here on social media websites posting all these things and having discussions” ; and grievance against public / private equity institution (both abroad and back home in Africa) which ‘fail’ to provide them with capital, or whose requirements in ascertaining suitability of a loan (which the aggrieved thinks is necessary to reverse their fortunes) to the recipient are too high to meet.

In another form, the grievances highlight the inability of even an afflicted person, to devise a solution to their own problems. Yesterday, I was speaking to a young man in Malawi who complained about how there is a total lack of leadership in local government, and how even the simplest of ideas get shot down, not only by the leadership – who do little except complain and ‘go around in circles‘, but also by those who are affected:

“Man, things in Malawi are bad, I don’t even know what will happen next, except that we are going down. The 60% pay increase civil servants were offered in early February is yet to be effected. There has been no follow-up, and i don’t think its going to happen. Our bosses invite us to meetings, every other day, where the only outcome is throwing blame and finding excuses. …

We were meant to be paid on the 21st [November], but up until now [8th December] we have not been paid. Salaries, allowances have not paid. It’s a mess. To add insult to injury our duties have been increased and we have to pay tax, even when we are not being paid. Fuel in the country is going up, the dollar is at K417 on the black market at K450, and since there is no money to pay us, we will be sent on holiday next week because the coffers are dry. But what will we eat if we have not been paid? People are disgruntled,, right now the president is going to South Africa, and after that to Kenya for some celebrations ….more travelling and money pointlessly spent. Madness really on behalf of our president. 50 years of independence achimwene [brother], and we keep going backwards….

And when you make a suggestion, even the guy standing next to you, on the same level as you, who is also suffering like you are, shoots all your ideas down, but they can’t even come up with a single idea??”

He goes on to say:

I don’t see a leader amongst any of them. I havent even registered to vote. These guys don’t deserve to be presidents. They keep recycling the same old politicians with the same old ideas. So where do you think our country is going to go if youngsters are not given a chance? Sadly we live in society that is so embedded in “bola moyo” [At least we are alive] . That’s what is sooooo heartbreaking. People that let others take advantage of them because of poverty or ignorance

What then do you do when you know that the aggrieved person is a capable hardworking individual who if given a chance, can flourish, who if given an opportunity, can achieve something, and make a success of his life.
Another young man, a distant nephew who I have known for many years said this several months ago:
Thus what am teaching Mathematics. I have a Bachelor of Science Degree in Management Information Systems uncle, am teaching for survival, what else can a man do for survival?
Further, several years ago, another young man, a former classmate said this:
…Haven’t been yet… The same factors that delayed my Malawi trip also delayed my [trip to] Israel. Doing business in Nigeria is astronomically hard. The easiest thing to do is enter politics and steal money
This was near the time that Nigeria was to have its elections, and at the time, some Nigerians, going by the name Nigerians Must Unite And Liberate Nigeria, created this photo:
nigerian
Whatever you think of this poster or its creators, to me it represents the growing feelings of discontent most people of African heritage have within. The bottled pain, the frustrations, the powerlessness that can only be translated into song, art or writing. They’ve done the demonstration, they’ve petitioned organisation, people, politicians – the power blocs, they’ve done almost everything, and nothing seems to work, very little seems to change.
It is true that most people who have the power to change things in the world today either deliberately choose not to act, they act too late, or act in the wrong kind of way. And that list of enablers is not limited to those from within Africa alone.
Even sound advice from experienced activists, including writers who have spent years exploring and analysing Africa and its woes is largely ignored, making the task of resolving the problems even harder.
Looking at all this, what is encouraging to me is that there are some people (another here, here , here and herehere) who have  some understanding of the issues on the ground. And are willing to help, one step at a time. Although few in number, and without the capital of the larger aid organisations, these stories demonstrate that even though the situation in Africa can be described as extremely difficult, some people empathise. Some people understand. Thus, if more people looked at the helpless young people with the same lens as these people view those they have gone out to help, and offered to help, or even  practical advice which the young men and women could implement, it would represent a step forward towards defeating that sense of helplessness and failure that is common in our societies, especially across Africa.
Which is why sometimes when I see that blind man in my mother’s neighbourhood, I find myself thinking that if only I had the means to help him, if only I could do something about it, I would have offered him some help. Explored the possibility of getting him a guide dog, or even offer to pay for a part of his healthcare, I don’t know, something, even if it were just a one-off thing …