Tag: economic

Noam Chomsky: America is the gravest danger to world peace

by Sang N., posted in Opinion, Thoughts
Iranian grandfather and his grandson
Iranian grandfather and his grandson

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.

Why Greece should build strategic alliances with African countries

by Sang N., posted in Opinion
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/

Foundations of Economic Growth – lessons from pre-industrial Britain – part 1

by Sang N., posted in Education, Thoughts

Among the several books I’m reading is one titled “The Social and Economic History of Britain (1760 – 1965)” by Pauline Gregg, which I picked up at the local bookstore over a year ago. It seems it was initially published as “Modern Britain: A social and economic history since 1760” [amazon copy here ]

As pleasure in reading goes, the beginning is not that interesting. But as the story progresses, it get’s rather animated. And revealing. Having been published in 1965,it also doesn’t look that appealing in terms of aesthetics, unless a hardback is something that tickles your fancy. But as they say, do not judge a book by its cover.

Yet this book is more informative than first appears, and references to a critical period of the Industrial revolution, when Britain was rising to cement its place as a great world power, its empire as the largest in the history of mankind, its economy as one of the biggest and most resilient.
Thus like many others who have an appetite to properly understand how economies develop (or more accurately in my case – how it was triggered in Britain),I’m inclined to share some of its contents.

Firstly the book acknowledges that every nation develops differently. In some its slow – occurring over centuries, in others, its revolutionary, noticeable over a lifetime.

But before I dig into it further, there’s a summary that encapsulates the content which I’d like to begin with:

Eighteenth-century Britain was still far from being a country of capitalist enterprise. In only one of the three parts of the country in which the woollen industry was located had the capitalist form developed on a large scale. Cotton was in an intermediate stage. The iron and coal industries employed comparatively few people, and other capitalist enterprises were not typical. The agricultural interest was still dominant, and the handicraftsman was more important than the industrial or commercial capitalist.
It was not until the second half of the eighteenth century that the change towards large-scale industry quickened, becoming so rapid as to appear revolutionary. A number of interconnected causes produced this acceleration. There was a growth of population, creating an increased demand for goods. There was improved transport, making possible the carrying of finished commodities to markets and raw materials to centres of production. There were the great mechanical inventions, new materials, and improved chemical processes, which quickened and cheapened production. It is useless to try to assign priority to any of these factors; together they comprised the Industrial Revolution

African empowerment policies compared

by Sang N., posted in Thoughts

African empowerment policies compared  via LEXAFRICA

Excerpts:

The guidelines, which have been approved by Ghana’s government, propose that local participation in the oil and gas sector be increased to 80% by 2020, with the emphasis on sourcing goods locally and training and employing Ghanaians.

…

Angolans must hold 51% of the share capital in mining and telecommunication companies and 30% in insurance enterprises. In oil and gas, there are no ownership restrictions on operator companies. However, companies that supply the oil industry with certain general services, such as catering, cleaning and transport, must be 51% owned by Angolans

…

Mkokweza says the current focus of the Zambian government is on a collaborative approach towards foreign investment. This is despite the domestic pressure on it to reintroduce the super tax on mining investors, which policy had been abandoned in the wake of the global recession, when an estimated 10 000 Zambians lost their jobs.

Comment

While economic empowerment is a necessity for a continent that for centuries has seen its people discriminated against, repressed and taken advantage of, I believe a balance should be reached to ensure that measures for economic empowerment are practical, such that they have been proven to be genuinely beneficial to the populus, and are not misplaced projections of anger or resentment against foreign corporations and businesses, most of whom provide employment and income to the government via taxes.

Economic Empowerment

by Sang N., posted in Initiatives, Opinion, Thoughts

mg2I hate to be the bearer of bad news but I’m not sorry to be the one that spoils the party. Especially this particular party…because while Malawi is currently heated with election campaign fervour, some of the events happening on the ground have caused one part of me to doubt whether much substance will in fact come out of the leadership that will be appointed after the 20 May elections.

Are we really going to see the transformation being excitedly predicted by each party’s honchos? What kind of transformation will we see? Are the parties really going to deliver what they have promised in their manifestos? Weren’t similar promises made during the election campaigns of 1994, 1999, 2004 and 2009? To what extent were those promises honoured? So then, what major transformation came out of the administrations who won those elections?

I think no matter who you choose to vote for, it would be wise to be cautious, and carefully examine each candidate on their merits, and what their track records in terms of actual achievements the last 5 – 10 years (not just the last year or two) have been…

Many a times I have waxed lyrical as if on a soapbox about economic empowerment of Africans, and many a time, I have not exactly got through to the right people. Which is okay. The right people are rarely in the right jobs, they are rarely listening.

But this is an issue that has to be addressed sooner or later, otherwise African countries will continue to struggle with poverty and other ills. Donors and foreign corporations will not tackle the issue of empowerment because it’s not always in their best interests, and they are not good at doing so [See this: Between the Elusive and the Illusionary: Donors’ Empowerment Agendas in the Middle East in Perspective – Mariz Tadros].

In Malawi most NGO’s do not have the power, nor are they sufficiently well resourced to influence the establishment of a nationwide empowerment initiatives that have a real chance to make a big enough impact. It’s all down to the government and MP’s, and for what it’s worth one part of me can’t see enough progress being done after the elections. Maybe I’m being unfair and prematurely judgemental, but I’m yet to be convinced whether any of the major parties truly can deliver what they promise. And this is not only because the practicality of what they promise in their manifestos is questionable but also because the vagueness of some of the promises render them useless.

But for those voters who are listening, and concerned, the important questions every Malawian should ask the candidates of the 20 May elections, before voting, are these:

What will they do differently to ensure that Malawians are economically empowered, and not taken advantage of? And why should we trust you?

This is important especially because it is clear to most Malawians that the tenures of the MCP, UDF, DPP and PP governments in the past have established very little for Malawians to show for. While countries like Kenya, Zambia, Rwanda, Ethiopia and Mozambique (where there was a debilitating 15 year long civil war) have powered forward with impressive results, Malawi, despite unsustainable blips of progress, is still languishing in the doldrums.

So, what will the candidates who vie for election to Parliament do which hasn’t been done already in the country’s 50-year-old history?

The reason that this question must be answered is that economic empowerment will not occur if the policies the new government institute turn out to be mediocre (like distributing cattle, chickens, houses or shoes) or the same as what has not worked in the past, and if corruption continues to be tolerated. In a country with 15 million people, the presidency would be best advised to think on a much larger scale, than wasting resources on mediocre projects.

Taking a simplistic general view, for people to be innovative and industrious they require one or more of the following:- an income, education, inspiration, tools/ building blocks (trucks, implements & equipment), and power (literally electricity). So, one would think that when a government articulates how they will provide these as part of a wider national transformation strategy, there will be a much higher chance of transforming Malawi than say distributing a million cows to villagers.

But that alone is not enough. Empowerment essentially means giving one power or authority to do something. So I’d like to see factories built, where young people can work, earn an income and develop transferable skills. And those factories, must be majority owned by Malawians, so that the profits made from Malawi stay within Malawi. Further, instead of giving a mining contract or power generation contract to a foreign corporation – which has its own interests, I’d like a government that promises, and implements a national  mining company, or power generation company, which is government owned, and whose profits are reinvested into Malawi.

That is precisely the kind of visionary leadership Malawians should seek and vote for.

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The real reason why I oppose drilling for oil on lake Malawi

by Sang N., posted in Initiatives, Natural Resources, Opinion, Thoughts

Whatever you choose to believe, here is one hypothesis you must seriously consider; That a nation that does not own its natural resources is not independent at all. That instead, what exists are different levels of servants (anchito) working for a foreign master (bwana) under a semi-sovereignity.

After all the unnecessary toiling, studying, chasing one research project after another that has preoccupied my time the last two years, I have come to the sobering,inevitable and unsurprising conclusion that there is a worrying number of people who think you or someone like me doesn’t deserve much good out of this life.

A worrying number.

Some of these people think that if you are black and were born in Africa, in a country that is considered poor, in a family that does not have strong and powerful political allies, with little or no personal ‘fortune’ of your own, that your place on the socio-economic ladder is right there where fate (or an accident of evolution) created for you, exactly in the societal ‘bracket’ in which you were born. Where social / financial progression is an unattainable pie in the sky. In this place, a dead-end job is the best you can expect, and hand-me-downs or clothes sold in ASDA (or Walmart) with brands such as ‘George‘ and ‘White Stag‘ are worn. It’s a place devoid of vacations, where Sirloin steak is an unjustifiable luxury, and where a McDonald’s burger counts as a treat; where trips to the movies and broadway featured shows are unheard of, and golf – the preserve of the extremely wealthy. Lets just say it’s a place where a gym membership is not even a consideration when one’s salary can barely cover everyday expenses. In this place £7.50 spent on 400g cherries would be an obscene expense; it’s a place where a typical evening consist of dinner that costs less than $10 for a family of 5, (and does not include wine), and typical everyday entertainment is either Eastenders or some crap show on the radio, while drinking a bottle of Carlsberg.

These same people would have you believe that such a life is ‘normal’ or at least relatively normal. They bet on showing you a worse existential state to justify that while they exploit your resources (and make lucrative deals with your country’s selfish and spineless politicians), they are doing you a favour, you are in fact getting a better deal than that guy over there, in whose country a war has been raging for years, where women are unsafe and rape is commonplace, that guy’s country has virtually no education system in place, and look, armed guerilla fighters! In a country with no local currency, courts presided by warlords and a society infested with corruption….

Such scare stories are meant to somehow pacify your human (umunthu) and natural rage against what is clearly injustice against your brothers and sisters. Injustice which in other forms sees you called black monkey’s in your own country. They are the kinds of people who in Victorian times would have suggested (or mixed with people who were likely to suggest), without qualms, that a woman’s place is in the home; that women should not be allowed to work or vote. These are the kinds of people who would have owned the cotton mills (or mixed with people who owned the cotton mills) of Manchester and South Carolina, including being at the forefront of recruiting cheap child labour – for maximum profit. They are the kinds of people who would have been involved in the mistreatment of Jews throughout a large part of  European history. These kinds of people would have suggested to Pontius Pilate that because Jesus was a friend of the poor and ‘rejects’ of society, that he indeed deserved the most severe punishment for calling himself the son of God.

The haughty demagoguery of these sorts saw them perpetrate beliefs such as Manifest destiny, Supremacism and the Slave trade, and their puppets coin phrases such as ‘Axis of Evil‘ and ‘War on Terror‘. For the purposes of this article, not least dramatic effect, I’ll call these people the Greedy architects of death.

Yet aren’t these precisely the kind of attitudes which precipitate global unrest? Is this not what deprives humanity of peaceful coexistence and harmony? I say this because beneath the conflicts in Iraq, Afghanistan, Syria, Libya, Egypt, Ukraine, or even the economic troubles facing Zimbabwe, there is a simple altercation: that of land and resource control.

In the case of Zimbabwe, please reason with me for a moment. Why on earth should a country be punished with sanctions for wanting to take back land that was forcefully and deceptively taken away from it in the first place??? Don’t get me wrong, I’m not in support of violence, but what is it that lies at the heart of the matter?

Another facet to their characteristics is that of standing. Here, a common trait of the architect is opposition to any deal in which they aren’t getting a cut. In other words, when others do something bad, and these architects are not getting any money or resources from that bad something, then the action is wrong/unforgivable/ atrocious etc. But when the architects do that very same bad thing, they can can sugar coat it and self-righteously justify it…with phrases such as ‘Oil for food‘ and ‘Regeneration’, helpfully assisted by their Bretton Woods colleagues, with selective use of the biased chastisement whip commonly known as ‘International law’.

annan-3But how does all this relate to Malawi and the oil drilling on lake Malawi I hear you ask? Well, because at the heart of Malawi’s problems is land and resource control, and the puppet masters pulling the strings are exactly the same kinds of people brewing trouble elsewhere.

So, assuming you’ve heard of the Scotland independence debate, then even though I identify with old fashioned views that divorce must be avoided wherever possible and people must discuss to resolve differences, one part of me says that maybe Scotland should become independent from the UK. Because maybe then will they be able to use their resources for their own country’s benefit. Maybe if independence occurs, some of these architects will begin to realise just how their selfish and greedy actions have been hurting other people across the world?

In Europe maybe if Crimea joins the Russian Federation it will not be exploited by the pro-western kingpins of resource control – some of whom have probably been responsible for financial trickery or misconduct elsewhere?

Similarly, let the people of Malawi resist (at all costs and in whatever manner) drilling of oil on their beautiful lake because in the end, it’s not the local people who stand to benefit from the profits of the oil drilling. As the Paladin episode at Kayelekera has shown (and as other examples on the continent continue to demonstrate), it’s only a few corrupt government officials with off-shore bank accounts in tax havens in Switzerland or the British Virgin Islands who benefit. It’s large Investment Banks that provide the capital to the architects who will get the lions share, it’s a handful of millionaire tycoons with surnames like Borshoff and Ichikowitz, who live in mansions thousands of miles away and whose surnames the locals can’t even spell or pronounce properly, they are the ones who stand to profit. It is the Greedy architects of death (whose actions spur domino type effects, causing wars, and thereby suffering and hardship to millions across the world) who stand to benefit.

It sounds like a tedious link to make, but what has been the number one cause of unrest across the world if not battles for resource control?

That is my reason for opposing drilling on lake Malawi. Because while there is a high risk of environmental degradation which could affect the lives of fishermen who depend on the lake for their livelihoods (it happened in the gulf of Mexico, and happens in the Niger Delta all the times [see another link here via Amnesty International] – how can anybody sane think it will not happen on lake Malawi?), and which could negatively affect tourism and life ecosystems in and around the lake, in the end, there will be tears and loss as very few Malawians will benefit proportionally from the oil resource. In the end it could create strife….

But I’m not saying that the transactions a poor country such as Malawi signs with foreign ‘speculators’ are all bad or useless, and do not bring some material benefit to the country or its inhabitants. No, that’s not what I’m saying. What I’m saying is that comparatively, the benefit to Malawians is too small, too insignificant, chicken feed – unsustainable. In my view, it’s no more than a trojan horse that later comes back to bite and haunt the country. Instead, the net benefit of most of these deals is significantly in favour of these architects, who come into an area, pour in their capital, make billions of dollars in profits, then move out richer than they came in – leaving behind more than just a mess. Leaving behind broken lives,in which the local man remains economically where he was prior to the ‘invasion’, or even poorer, resigned to licking his wounds, as one aggressor after another wrestle for his country’s resources.

And that is hugely problematic because no matter who Malawians elect in May 2014 elections, if the status quo of dealing with investors is maintained, where African leader treat the national purse (and national assets) as private belongings, where investors are allowed to illicitly wire billions of untaxed funds out of the continent, if economic disparities across the country are not decisively addressed (in this I mean by creating companies in which trained locals are majority shareholders and investors are minority shareholders), if the leaders of western countries continue to be hypocritical over the well-documented conduct of business leaders from their countries, poverty levels will continue to linger in Malawi and across Africa for a very long time. And come next election very little would have changed, people will be scratching their heads, and you can come back and read this article again.

By the way, you don’t have to believe anything I’ve written above 🙂 . As I said in the first paragraph, it’s just a hypothesis, a theory based on my observations 🙂 … But even so, take a look at what these people here are saying (AfDB-GFI Joint Report: Illicit Financial Flows Render Africa a Net Creditor to the Rest of the World ;  Sub-Saharan Africa loses 5.7 percent of GDP to illicit financial outflows ; Illicit financial outflows from Africa crippling continent’s development – UN ). With such stories of behaviour which is clearly hurting Africa, should Malawians really risk another Kayelekera? Would it be wise to entrust the lake to people whose number one motivation is profit and little else? Could anybody say the country is really independent? How can you justify independence when you depend too much on the help of others for your existence?

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Flipping the Corruption Myth

by Sang N., posted in Corruption, Fraud, Initiatives, Intertnational Politics, News, Opinion, Politics, Thoughts

Flipping the Corruption Myth by Dr Jason Hickel, a lecturer at the London School of Economics and an adviser to /The Rules
– Corruption is by far not the main factor behind persisting poverty in the Global South.  Original article via Al Jazeera here

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Transparency International recently published their latest annual Corruption Perceptions Index (CPI), laid out in an eye-catching map of the world with the least corrupt nations coded in happy yellow and the most corrupt nations smeared in stigmatising red. The CPI defines corruption as “the misuse of public power for private benefit”, and draws its data from 12 different institutions including the World Bank, Freedom House, and the World Economic Forum.

When I first saw this map I was struck by the fact that most of the yellow areas happen to be rich Western countries, including the United States and the United Kingdom, whereas red covers almost the entirety of the global South, with countries like South Sudan, Afghanistan, and Somalia daubed especially dark.

This geographical division fits squarely with mainstream views, which see corruption as the scourge of the developing world (cue cliche images of dictators in Africa and bribery in India). But is this storyline accurate?

Many international development organisations hold that persistent poverty in the Global South is caused largely by corruption among local public officials. In 2003 these concerns led to the United Nations Convention against Corruption, which asserts that, while corruption exists in all countries, this “evil phenomenon” is “most destructive” in the global South, where it is a “key element in economic underperformance and a major obstacle to poverty alleviation and development”.

There’s only one problem with this theory: It’s just not true.

Corruption, superpower style

According to the World Bank, corruption in the form of bribery and theft by government officials, the main target of the UN Convention, costs developing countries between $20bn and $40bn each year. That’s a lot of money. But it’s an extremely small proportion – only about 3 percent – of the total illicit flows that leak out of public coffers. Tax avoidance, on the other hand, accounts for more than $900bn each year, money that multinational corporations steal from developing countries through practices such as trade mispricing.

This enormous outflow of wealth is facilitated by a shadowy financial system that includes tax havens, paper companies, anonymous accounts, and fake foundations, with the City of London at the very heart of it. Over 30 percent of global foreign direct investment is booked through tax havens, which now collectively hide one-sixth of the world’s total private wealth.

This is a massive – indeed, fundamental – cause of poverty in the developing world, yet it does not register in the mainstream definition of corruption, absent from the UN Convention, and rarely, if ever, appears on the agenda of international development organisations.

With the City of London at the centre of the global tax haven web, how does the UK end up with a clean CPI?

The question is all the more baffling given that the city is immune from many of the nation’s democratic laws and free of all parliamentary oversight. As a result of this special status, London has maintained a number of quaint plutocratic traditions. Take its electoral process, for instance: More than 70 percent of the votes cast during council elections are cast not by residents, but by corporations – mostly banks and financial firms. And the bigger the corporation, the more votes they get, with the largest firms getting 79 votes each. This takes US-style corporate personhood to another level.

To be fair, this kind of corruption is not entirely out-of-place in a country where a feudalistic royal family owns 120,000 hectares of the nation’s land and sucks up around £40m ($65.7m) of public funds each year. Then there’s the parliament, where the House of Lords is filled not by-election but by appointment, with 92 seats inherited by aristocratic families, 26 set aside for the leaders of the country’s largest religious sect, and dozens of others divvied up for sale to multi-millionaires.

Corruption in US is only slightly less blatant. Whereas congressional seats are not yet available for outright purchase, the Citizens United vs FEC ruling allows corporations to spend unlimited amounts of money on political campaigns to ensure that their preferred candidates get elected, a practice justified under the Orwellian banner of “free speech”.

The poverty factor

The UN Convention is correct to say that poverty in developing countries is caused by corruption. But the corruption we ought to be most concerned about has its root in the countries that are coloured yellow on the CPI map, not red.

The tax haven system is not the only culprit. We know that the global financial crisis of 2008 was precipitated by systemic corruption among public officials in the US who were intimately tied to the interests of Wall Street firms. In addition to shifting trillions of dollars from public coffers into private pockets through bailouts, the crisis wiped out a huge chunk of the global economy and had a devastating effect on developing countries when demand for exports dried up, causing massive waves of unemployment.

A similar story can be told about the Libor scandal in the UK, when major London banks colluded to rig interest rates so as to suck around $100bn of free money from people even well beyond Britain’s shores. How could either of these scandals be defined as anything but the misuse of public power for private benefit? The global reach of this kind of corruption makes petty bribery and theft in the developing world seem parochial by comparison.

But this is just the tip of the iceberg. If we really want to understand how corruption drives poverty in developing countries, we need to start by looking at the institutions that control the global economy, such as the IMF, the World Bank and the World Trade Organisation.

During the 1980s and 1990s, the policies that these institutions foisted on the Global South, following the Washington Consensus, caused per capita income growth rates to collapse by almost 50 percent. Economist Robert Pollin has estimated that during this period developing countries lost around $480bn per year in potential GDP. It would be difficult to overstate the human devastation that these numbers represent. Yet Western corporations have benefitted tremendously from this process, gaining access to new markets, cheaper labour and raw materials, and fresh avenues for capital flight.

These international institutions masquerade as mechanisms for public governance, but they are deeply anti-democratic; this is why they can get away with imposing policies that so directly violate public interest. Voting power in the IMF and World Bank is apportioned so that developing countries – the vast majority of the world’s population – together hold less than 50 percent of the vote, while the US Treasury wields de facto veto power. The leaders of these institutions are not elected, but appointed by the US and Europe, with not a few military bosses and Wall Street executives among them.

Joseph Stiglitz, former chief economist of the World Bank, has publicly denounced these institutions as among the least transparent he has ever encountered. They also suffer from a shocking lack of accountability, as they enjoy special “sovereign immunity” status that protects them against public lawsuit when their policies fail, regardless of how much harm they cause.

Shifting the blame

If these patterns of governance were true of any given nation in the global South, the West would cry corruption. Yet such corruption is normalised in the command centres of the global economy, perpetuating poverty in the developing world while Transparency International directs our attention elsewhere.

Even if we do decide to focus on localised corruption in developing countries, we have to accept that it does not exist in a geopolitical vacuum. Many of history’s most famous dictators – like Augusto Pinochet, Mobutu Sese Seko, and Hosni Mubarak – were supported by a steady flow of Western aid. Today, not a few of the world’s most corrupt regimes have been installed or bolstered by the US, among them Afghanistan, South Sudan, and the warlords of Somalia – three of the darkest states on the CPI map.

This raises an interesting question: Which is more corrupt, the petty dictatorship or the superpower that installs it? Unfortunately, the UN Convention conveniently ignores these dynamics, and the CPI map leads us to believe, incorrectly, that each country’s corruption is neatly bounded by national borders.

Corruption is a major driver of poverty, to be sure. But if we are to be serious about tackling this problem, the CPI map will not be much help. The biggest cause of poverty in developing countries is not localised bribery and theft, but the corruption that is endemic to the global governance system, the tax haven network, and the banking sectors of New York and London. It’s time to flip the corruption myth on its head and start demanding transparency where it counts.

Dr Jason Hickel lectures at the London School of Economics and serves as an adviser to /The Rules. 

Follow him on Twitter: @jasonhickel

Global 100 Voices: No 8

by Sang N., posted in Opinion, Thoughts

crptn“Change the laws so that floor crossing is illegal and make it easy to impeach a politician if they do not deliver or are suspected of being involved in corrupt activities.”

After a few months without a contributor, finally a Malawian Ace has risen up to the challenge of the 100 Voices interview.

My guest today is a businessman who can clearly see the problems facing the country, and has the progress and advancement of Malawi close to his heart. He has established himself in South Africa, and runs a number of businesses there. Mr Elvis Chaweza, thank you for taking the time to do this interview.  But before we begin, and for the benefit of those who do not know you, perhaps you could take some time to summarise for us a bit about your background?

I am a Malawian resident in South Africa. I went to Blantyre Secondary school and went on to study Mechanical Engineering at the University of Malawi, The Polytechnic then worked for Lonrho (Makandi Estates) for a short while before coming to South Africa. I have been in South Africa for the past 25 years. I am married with two children, a daughter aged 21 and a son aged 6. I am the CEO and founder of GEBS Group  [website here] with interests in the security sector and the manufacturing sector. 

1. As a Malawian, how important is Malawi’s Socio-Economic stability to you and your family?

Socio- Economic stability is the backbone of development of any society and it is critical as it affects all spheres of development be it education, employment, health, agriculture, security and so on. Instability in any society starts when there is an imbalance in the social structure which feeds off events in the economic structure. It is important that at a family unit level the socio-economic status enables the family to access the basic needs for the development of the family unit.

2. After nearly 50 years since independence, what visible progress do you think Malawi has made since independence, and in your view, what pressing challenges remain?

Well, it is difficult to point anything that has been significant since one party rule ended in Malawi. Most of the infrastructure that is still of significance to Malawi has the legacy of Dr Hastings Kamuzu Banda and in my view, the last 20 years have not seen a continuation of the pace set by the founder leader of the Republic of Malawi. I have not seen infrastructure investment in either vigorously maintaining the existing or building new ones that could have major impact on the economy. Examples are Escom. No future planning was implemented hence the grid is battling to meet demand. We all know that electricity drives the economy of any country and needs careful planning and additional investment all the time.

3. In view of the challenges you describe, what do you think is the role of government and the people in tackling them?

The role of Government is to create a vision that is developmental in nature and create an enabling environment for investors both local and international to invest into the economy. This vision must be biased towards developing infrastructure like the utilities (electricity and water) transportation and communication. These are primary drivers of any economy. The regulatory environment in Malawi is so poor that corruption has become the norm rather than the exception. All spheres of government together with the private sector are so corrupt. It will take a serious introspection to overcome this challenge and it requires a major shift of morals by each Malawian to stem the chronic corruption.

The level of corruption in the country has the potential to create political and social instability if not stopped before the critical mass is reached of the balance of the haves and have-nots.

4. As someone who has lived outside Malawi for a few years and has been exposed to modern and progressive ideas, what things in your present country of residence have had the greatest impact on you, and why?

I think the environment is enabling for one to do different things ranging from further education to entrepreneurship. There is a lot of effort from government to encourage entrepreneurship at grassroots level. It is up to the population to take advantage of the opportunities provided by government.

5. What lessons do you think Malawians and the Malawian leadership can learn from those ideas?

In small economies like Malawi, politics seem to drive everything and this has had a detrimental effect in economic progress as people who should provide continuity have often been found to be lacking in the necessary skills to carry on where others left off. We have come to look at political leadership as something different to business leadership. We have not checked the credentials of political leaders to see if they have those intrinsic abilities to drive the various sectors of the economy. This has resulted in stagnation and massive corruption. If you put someone in charge of people who are better educated than him or her, that person will employ fear to command respect and this has the effect of creating a divide and rule scenario where those who identify with the leader view the better educated members of the team as a threat. So it is important to have a balance to ensure there is no polarisation of forces pulling in opposite directions. Poorly educated individuals should not be allowed to access power as they tend to misinterpret feedback from their environment. This creates sensitivity to their lack of knowledge and as a result they lose focus as they feel vulnerable and losing control. Once that happens dictatorial tendencies kick in and it is downhill all the way. It is far easier to destroy than to build.

6. When you last visited Malawi, what struck you the most as the greatest sign of improvement or development?

I will be honest here, I found that very little if any development has taken place. Educational institutions have been run down. I visited the Polytechnic and had the privilege of going into the “staff room”, a section we hardly were allowed to go in as students in my time and the place had lost its previous glory. It was filthy with broken tiles due to lack of maintenance. This is just one example of the lack of pride the current leadership (from the advent of multiparty democracy) has had in an important institution where future leaders are supposed to be trained.  I also observed that the level of poverty has gone up compared to the time I left the country. Political leadership has been preoccupied with bickering and mudslinging instead of directing developmental issues on a tangible course.

7. And what struck you as the biggest sign of stagnation or regression?

Regression in the way the schooling system has been given less or no priority at all. There is a huge sense of ‘them and us’ where people who can afford to send their children to private schools do not care about the child in the village where they came from. There is a huge number of young people who are not adequately educated to meaningfully contribute to the economy.

Skills programmes seem to be non-existent compared to the old days when there was a lot of support from government and industry to keep these institutions running. When you see local  musicians being roped in to become law makers and being handed ministerial posts, the question is, are these the best candidates we can put forward as the face of government? Are we serious about managing the country or feeding our ego to say we can do what we like because we have the power?

8. As you know, Malawians will be going to the polls in 2014, to elect a new president. In your view, what kind of leader does Malawi NEED, considering the country’s current challenges?

It is sad that the current politics emphasize on the individual. It has become characteristic that the personality of the political head permeates into every aspect of how government business is done. The ideal leader should be adequately educated. I mean formal education that is no less than a first degree – not honorary degrees which the recent crop of leaders seem to love so much.

The leader must be forward thinking and not use political membership as a ticket to employment for party loyalists. People must be appointed on merit based of their knowledge content and experience in managing an institution be it government or private sector. In that aspect, the leader must be pragmatic enough to appoint key[capable] people in relevant sectors regardless of political affiliation [who have an excellent history and experience in those sectors]. It must be their potential to create positive change that must guide their selection and appointment.

People in leadership must be thoroughly background checked to eliminate the possibility of bringing a hungry person to be in charge of government funds.

People who have been implicated directly or indirectly in corruption whether in government or private sectors must never be given positions of authority at all.

There are plenty of skilled people full of goodwill out there but if you put foolish people into power, they set out to eliminate any possible opposition (better qualified individuals) and put incompetent people into important positions.

No one should feel privileged to occupy a position. People must be there because they deserve to be there and have the desire to serve the country, otherwise you have people who plan and dream about how they are going to praise their leaders, composing songs of praise for the leadership,  instead of planning how they are going to work to improve on their mandated deliverables. Remember to be a servant of the people who elected you and not the slave master of the electorate. 

9. Specifically, how should that leader approach the top job in terms of sustainable development and reducing aid dependency?

First the leader must embark on clean up of all state organs of all dubious characters. We have seen school dropout musicians becoming ministers in the past and that was indicative of how lacking in vision the leadership was.

Surprisingly Malawians in general embraced these choices of appointments!  I was left wondering where is the common man in the street to see that such people will never improve their lot. This is a populist tendency which most uneducated leaders embrace. You should never employ someone who will spend months pinching themselves to see if it is real that they are now a minister – something that never existed in their wildest dreams.

Malawi is a country that is so corrupt to the core and this corruption affects all spheres of government. Judges being bought by the private sector bosses and government officials to settle political scores.  People of dubious moral character occupying positions of influence. If this is not cleaned up by the upcoming leader, real transformation will be a pipe dream for Malawians.

On reducing dependency on aid, until the general population sheds the notion that it is okay to be given freebies, we have a long way to go to become independent in the real sense. We should never be comfortable with begging at all. It is a disgraceful activity that deprives you of your independence.

Malawi has resources which if used cleverly, they can improve the economic status.

The coordination of policy to seamlessly integrate all development initiatives in all sectors of the economy will ensure progress. For example you can not grant a mining licence to an investor before you have done an environmental impact assessment to determine whether the roads must be strengthened first.

These two activities belong to different ministries which must work together. In a corrupt society this will never happen.

I will say it again:The leader must be a servant of the people not the other way round.

10. As you know, Tobacco is Malawi’s biggest source of export revenue. Looking at the problems that have plagued the tobacco industry in recent times, what alternatives do you think Malawi has besides Tobacco, and why are they viable alternatives?

First of all tobacco in not food, so developing agricultural products that do not add value to the human body, the first resource of production, is misplaced. Malawi has a lot of fertile soils and an abundance of water.

A clever and innovative combination of these assets can ensure Malawi is self-sufficient in food. When people use their energies to look for food, they will not have time to improve their economic status and surroundings. This feeds into the justification of a beggar mentality. Ironically poverty is now being used as political currency in Africa in general. That is why people want to rule forever instead of passing the baton. They are very uncomfortable to relinquish power that they would rather have a relative take over that a so-called “complete stranger”. If there is no blood line to take over, use someone who looks tame enough to continue the plundering. A friend of mine once told me that he used to refuse taking leave to avoid someone uncovering the skeletons under his desk. This is what corruption does to the leaders who enriched themselves improperly.

Malawi must have the will to [take another look] at the resources it has and use them efficiently to ensure there is economic progress. Transparency is the key.

11. Considering our troubled history with donors and funders such as the IMF and World Bank, most recently when Bingu Wa Mutharika was president, how do you see Malawi progressing from this relationship in view of the criticisms these organisations have received in the media across the world?

Again, beggar mentality must stop from the top. Beggars are lazy people and are easily exploited. You must start from asking people to assist you in building your own sustainable resources with the aim of becoming independent. What the government is doing is like a person who goes to ask for a credit card so they can go drinking beer with the loan. In the end you pay more for the beer which if you first worked to get the money, you would buy it at the correct price. Coming to government, start by developing policy that will improve the economy at a micro level then move to the macro level. Accountability must be the key law makers must not be people who are corruptible.

If government is not made accountable for its expenses the looting cycle will continue.

When leaders find it difficult to explain their wealth, you know you have big problems. Transparency starts with self and the moment you are uncomfortable disclosing how your wealth is made, you should not profess to work for the interest of the people. Change the laws so that floor crossing is illegal and make it easy to impeach a politician if they do not deliver or are suspected of being involved in corrupt activities.

12. We have known for a few years now that Malawi has some precious minerals, including Uranium, possibly oil and other natural resources. How do you think the government is doing regarding managing Malawi’s natural resources, and are they benefitting Malawians in your view?

My take is that it can be better. Malawians are not benefitting because often these investors in these sectors are encouraged to give kickbacks to the government officials in exchange for lax tax incentives. The kickbacks do not go to the government coffers but the back pockets of individuals.

This deprives all Malawians of the tax revenue that would improve education, health, communication etc. Any serious leader would review all agreements the current mineral extractors have in place and revoke any licenses which were fraudulently obtained, review whether the agreements benefit the country or not and correct where necessary. It should not be activists outside government asking for transparency and accountability, it must be the elected parliamentarians demanding this from each other even before the electorate smells it..

13. Can the Malawian government do better to manage natural resources? If so how?

They could by ensuring that the method used to manage the resources does not create secondary negative effects. By insisting on appointing experts in their field to manage these resources instead of appointing party loyalists with no capacity [or proven experience] to manage the resources.

14. We know that corruption is endemic in both the private and public sector in Malawi, and has been plaguing most African governments across Africa, including the government of Malawi. What is your answer to increasing transparency and eradicating corruption?

I think the value system has been eroded so much so that corruption has become the way of life. People no longer think twice swindling their brother of their hard-earned assets. The best way to clean up is to ensure the rules are clear. No leniency in dealing with corruption cases whether private or government sectors. Any system that is weak in ensuring compliance does not work even with the best intentions. Start by striking off the roll all judges implicated in corruption or engaged in unethical behaviour.

If a judge sits on a case for three years without pronouncing his judgement, he is not fit to be a judge unless he can account to the reasons why judgement was not given in the prescribed time frame. If the minister of justice can not hold the judge to account, you know that the minister does not have the powers and therefore his boss must be called to account in this case the president.

15. Any famous last words?

Empty pockets never held anyone back. Only empty heads and empty hearts can do that – Norman Vincent Peale 

* Emphasis in brackets added.

[Comment:   While there are other factors at play, it must be noted that countries who are good at exchanging of ideas, such as Germany, Britain, S. Korea, Norway, Taiwan and the US, are also countries who have very strong democracies and economies, and who are most innovative. As someone who works in Intellectual property, I know this to be true. Their populations are also people who cannot be easily deceived; a factor that breeds responsible governance.

The reason we began the Global 100 Voices interview was to give an opportunity to Malawians across the world to exchange ideas regarding their country’s past, present and future, and to ‘compare notes on what has worked elsewhere’…and by implication, what could work in Malawi.

However, it is disconcerting that few people have been willing to contribute, despite numerous calls. Specifically, no women other than a single individual have up until now offered, or accepted to do the interview??? I’m not saying people don’t have other things to do with their time, but when you are living in a country where conditions are deteriorating every day, isn’t it normal to speak up, and join the hundreds of voices who are demanding action and change? It has been frustrating that the majority of Malawians I meet seem to have passed on the role of advocate (even ideologically) , to the next person …how then will a country improve or even develop, and its problems get rectified if those who are educated, have had exposure, those who are better informed, who have half a chance, are unwilling (or too preoccupied with their own personal matters, etc.) to rise up to the challenge?

Isn’t this the real reason why our politicians take us for granted? Because we are indifferent about the development of our own country (Sometimes, it appears as though certain people are more interested / passionate about luxuries, driving a Mercedes, Sports, etc than demanding responsibility from their government).

To understand my point, then please watch this (especially the last 5 minutes of it):

http://www.youtube.com/watch?v=-UMI9-6gmzE ]

Visa facilitation as a means to support tourism growth, socio-economic development and job creation

by Sang N., posted in Economy, Politics, Public Policy

joycebanda

Yesterday an update appeared on the Malawian president’s Facebook page, in which she informed her social media followers that she had participated in a ‘.. Ministerial Roundtable of the United Nations World Tourism Organisation at Victoria Falls’. The topic for discussion at the forum was ‘visa facilitation as a means to support tourism growth, socio-economic development and job creation’.

Considering that the themes of infrastructure, airports and increased cross-national trade within Africa have popped up several times in discussions and articles on this website (for example here, here and here), I think her angle on the issue is commendable, and deserves a mention.

Recently, the Sudanese Billionaire, Mo Ibrahim expressed his displeasure during his address at the 11th Nelson Mandela lecture, with the visa regimes in Africa, saying:

“..The second issue is African economic integration. Only 11% of our trade is amongst the Africans. We refuse to let our people travel from one country to another. We always need a visa. And l also say, sadly, although being Sudanese, whenever l travel in Africa l always carry a British passport, because l am welcome.

My colleague here, a Member of our Board, had huge trouble in getting a visa to be able to join me here. He was a Secretary General of the United Nations, a board member, just to get a visa here is a major trouble. But with my British passport l am welcome here through your immigration lines. Is that acceptable?..”

One can only hope that these kinds of initiatives — which clearly will have a tangible economic benefit to Africa – do eventually get implemented by the countries concerned, and do not end up onto the large pile of broken promises by political leaders past and present.

The full update on the Facebook page is as follows:

“Good evening my friends

Today I attended a Ministerial Roundtable of the United Nations World Tourism Organisation at Victoria Falls, on the border of Zimbabwe and Zambia where I addressed participants on the topic: ‘visa facilitation as a means to support tourism growth, socio-economic development and job creation’.

I addressed participants that our continent possesses many places of great beauty and I went on to talk about our beautiful country, Malawi, which happens to be one of the most beautiful countries for tourists attraction as we are blessed with a large freshwater lake, surrounded by white sands and full of a diversity of fish species and country boasts of wide open skies, beautiful rolling hills and mountains that offer rare experiences to climbers, bird watchers and adventure enthusiasts.

I made it clear that Malawi’s description as the ‘warm heart of Africa’ does not just refer to our inviting climate or the deep red of our sunset. It aptly describes the welcome you will receive from all Malawians as we are indeed very friendly and “warm hearted people of Africa”!

While talking about tourism I addressed participants that , tourism promises immense opportunities for growth of our economies and job creation; however millions of people continue to face unnecessary barriers to travel. These barriers include complicated and expensive visa processes; difficult and therefore expensive transport connections, lack of integrated border management systems and security threats.

For example, according to research by the United Nations WorldTourism Organisation; and World Travel and Tourism Council, facilitating visas among the G20 countries alone would create an additional five million jobs by 2015. This is a clear indication of the impact simplified and user friendly visa system can have on our economies.

It is my view that Visa Facilitation has the potential to enhance regional integration, intra-regional trade and easy movement of capital and people between countries and regions.Therefore, visa policies and procedures are among some of the most important instruments influencing tourism and investment. The development of policies and procedures for visas as well as other travel documents is closely linked to the development of tourism. Furthermore, the quality, reliability and functionality of visas have a direct correlation to number of arrivals at a destination.

In lieu of the above reasons I am calling for regional interconnectivity amongst our nations which may entail improving the current state of transport and telecommunications infrastructure and facilitating institutional improvements to optimise the efficiency and capacity of road, rail, water and air transport and the social sectors in education and health.

I believe that this in turn has high potential on enhancing economic growth; thus contributing to overall objective of poverty reduction. The link between tourism and poverty reduction is well known as one of the fundamental contributions is job creation which is part of our government’s economic recovery plan that my government is pursuing.

Thank you all for your support and prayers

May God bless you!

Good night!

Dr Joyce Banda
President
Republic of Malawi “

Infrastructure

by Sang N., posted in Economy, Inspiration, Opinion, Public Policy, Research, Thoughts

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While you’ll find several references to Infrastructure on this site, I think this time around I’ll leave it to the experts to do the convincing. Paja akulu anati mutu umodzi siwusenza denga…

And if one takes time to browse through the cited references below (some of which are straight off page 1 + 2 of Google), it’s hard to argue against the fact that Infrastructure is one of the essential drivers of economic development. In this sense, and for the avoidance of doubt,  infrastructure is not limited to roads, railways, airports and buildings (for hotels, schools, Universities, hospitals, business centres, research facilities, etc), but also includes for example a good telecommunication network (internet, voice, data and the like) and power supply.

Infrastructure for sustainable development – European Commission

Intro reads: ” Good quality infrastructure is a key ingredient for sustainable development. All countries need efficient transport, sanitation, energy and communications systems if they are to prosper and provide a decent standard of living for their populations. Unfortunately, many developing countries possess poor infrastructure, which hampers their growth and ability to trade in the global economy. “

Infrastructure’s value to economic growth – Richard Lee, Partner, KPMG (via BBC)

which includes the statement : “…In fact, a recent KPMG International survey found that an overwhelming majority – 90% – of business executives said that the availability and quality of infrastructure affects where they locate their business operations…”

Needs For and Benefits of Infrastructure Connectivity – Asian Development Bank Institute
which includes the statement: “… The rapid economic and population growth of Asian economies in recent years has put huge pressure on its existing infrastructure, particularly in transport and energy, but also in communications. Asia’s infrastructure is world-class in parts, but is generally below the global average. This is a bottleneck to future growth, a threat to competitiveness, and an obstacle to poverty reduction.”
which includes the following statement: – “…An adequate infrastructure is a prerequisite to economic development. Transportation and communications are important in developing and strengthening social, political, and commercial ties. These ties must be developed before trade can be handled on a regular basis.”
Why Is Infrastructure Important – David Alan Aschauer, formerly Senior Economist, Federal Reserve Bank of Chicago, and now (at the date of writing/publication) Elmer W.Campbell Professor of Economics, Bates College
Infrastructure and Poverty – The Global Poverty Project
the Intro reads: “Infrastructure – physical resources like roads, telecommunication networks, schools and drains – is necessary for a society to function: people can’t access healthcare if there are no hospitals; trade can’t take place if there are no roads on which to transport goods to markets. Infrastructure facilitates the basic functions of a society that are necessary to transport resources and people, produce and trade goods, provide essential services and ultimately reduce poverty.”
it follows with ” Lack of infrastructure also leads to lack of employment by acting as a disincentive to investment. Companies who struggle to produce and sell goods in an area with inadequate roads, electricity or water supply do not want to set up the factories or businesses that could potentially generate employment, improve living standards and reduce poverty. “
and “Lack of infrastructure can also lead to poor health and high mortality. Where there are no clinics or hospitals available, or where lack of roads or bridges makes them inaccessible, people cannot access the medical services that they require to be healthy and productive. A villager in Mozambique explains “The most dangerous thing is that [cholera] has always appeared during the rainy season, and it is then that the river is in spate and boats cannot cross.”
The Broader Benefits of Transportation Infrastructure – Ian Sue Wing, William P. Anderson and T.R. Lakshmanan, Center for Transportation Studies and Dept. of Geography & Environment, Boston University [similar article here]
uses the term Meso-scale to describe their approach. A slide from their presentation is quite appropriate in summarising some of the developmental + ‘equilibrium’ impacts, and worth replication:-
infra-messo
Finance and Infrastructure: The Economic Benefits of Infrastructure Projects Procured with Private Finance –  Andrew W Morley, International Congress Washington, D.C. USA, April 19-26 2002.
Infrastructure – Engineers Against Poverty
Intro reads as follows: “Without significant progress in the provision of infrastructure services it will be impossible for many countries to significantly achieve the Millennium Development Goals (MDGs). Globally, more than 1 billion people have no access to roads, 900 million do not have safe drinking water, 2.3 billion lack reliable sources of energy, 2.5 billion have no sanitation  facilities and 4 billion are without modern communication services.”
which contains the paragraph “When it comes to infrastructure development, Thailand has done very well compared with some other Southeast Asian neighbors. In fact, appropriate infrastructure, including access to power and water, has helped Thailand fuel rapid economic growth during the past three decades. Good infrastructure has made Thailand attractive to foreign investment, helped facilitate international trade, and improved the efficiency of everyday business activities. All of these led to more jobs, and more jobs led to more income for the poor. For some not-so-poor people, good infrastructure also helps them improve productivity or fulfill their lifestyles.”
RURAL INFRASTRUCTURE AND ECONOMIC DEVELOPMENT –  Dr. Mohammad Tarique, Lecturer, University Dept. of Economics, B.R.Ambedkar Bihar University, Muzaffarpur.
Abstract reads: “Infrastructure development has a key role to play in both economic growth and poverty reduction. Failure to accelerate investments in rural infrastructure will make a mockery of efforts to achieve the Millennium Development Goals in poor developing countries while at the same time severely limit opportunities for these countries to benefit from trade liberalisation, international capital markets and other potential benefits offered by globalisation”
Private Sector Participation in Infrastructure:the case of Thailand – Deunden Nikomborirak – Asian Development Bank Institute Discussion Paper No. 19
Road Funding: Time for a Change :- Economic Growth Benefits of Transportation Infrastructure Investment – Dr. John C. Taylor,  Associate professor of marketing and logistics at Grand Valley State University and a senior policy analyst with the Mackinac Center for Public Policy in Midland, Michigan.
which contains the statement “…No, the key benefit and reason for transportation investment is from helping to make businesses and individuals more productive, across the geographic landscape. We rely on our transportation investments to increase the economy’s overall productivity – both in terms of making individual travel (business and personal) faster and more reliable, and in terms of the productivity benefits of making freight flows faster and more reliable…”
World Bank — Malawi’s infrastructure: A continental perspective: Vivien Foster; Maria Shkaratan, ISSN: 1813-9450.

As you can see, the above papers + articles present a credible argument that a good and functional infrastructure is essential for economic development.
But that’s not to say that there are no credible counter arguments against infrastructure. That’s not what I’m saying. I’m sure one can cite the prevention of deforestation or preservation of natural habitats as factors against excessive infrastructure. Also, there is the issue of encouraging tourism which could probably mean encouraging greater biodiversity, creating / preserving forests  and wildlife reserves (but even in such circumstances, you still need a world-class airport for a good first impression (the kind of impression you get when you first land at Hong Kong International); functional roads (at least 3 lanes on each side between major cities) that minimises journey times; and world-class hotels and resorts. Why should you give tourists (who in large numbers can be the source of much-needed forex revenue) less than what they are accustomed to, and expect that they will return to your country, or recommend a visit to their friends?). Never mind recommendation, how can you compete on the global stage, when your facilities are substandard? Further, why shouldn’t it be possible to build modern factories with reduced carbon footprint (see Marks & Spencer’s ‘eco-factories’ initiative here) side by side with wildlife/forest reserves?
So, considering all this, I find it hard to imagine a credible setting in which arguments against infrastructure may find pre-eminence, over arguments for infrastructure; especially for a poor country whose majority infrastructure was built  50-year ago; whose roads are littered with pot-holes, with virtually no world-class business centres; that has old airports – with poor facilities including smelly badly looked after toilets; a country that experiences intermittent blackouts almost every week; that is struggling to attract significant investment from abroad; a country where 74% of the population live below the poverty line; which is heavily reliant on agriculture and dwindling tobacco exports + has negligible industrial output; has few natural resources; has a large relatively unskilled young population and suffers widespread corruption and cronyism, even in the upper echelons of its government.

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My question to you then is: why are the leaders of such countries not investing heavily (sooner than later) into major infrastructure projects, when it is in fact a determinant factor in economic development and a serious game changer? Is it because they are in fact not cut out for the job and would be better followers instead of leaders?