Wednesday, April 09, 2014

(STICKY) SAPs and the Build up to the Rwandan Genocide
Thomas Hauschildt, Mar 31 2012

This project evaluates the impact of structural adjustment programmes (SAPs) on the economy and subsequently social environment of pre-genocide Rwanda.

The first research aim is to evaluate the development and characteristics of neoliberal theory and SAPs (Auerbach, 2007, pp.34-35). The cornerstones of neoliberal policies are the International Monetary Fund (IMF) and the World Bank and the origin and purpose of both institutions will be assessed (Rowden, 2009, pp.53-56). Arguments made by the IMF and the World Bank in favour of these programmes will be opposed by arguments made by advocates of the dependency theory and world system theory (Kelly, 2008, pp.320-321; Wallerstein, 1980, pp.66-69).

The second research aim focuses on the causes and impacts of the SAPs on the Rwandan economy. The SAPs will be presented in a wider context which will include demands for democracy and a peace process between the Rwandan Government and the Rwandan Patriotic Front (RPF) (Andersen, 2000, pp.450-452).

The third aim provides the nexus between the SAPs imposed on Rwanda and ethnic mobilisation. The focus will be on two aspects of the Rwandan economy. First, the division of labour will be evaluated. This is essential as the SAPs were perceived as favouring the Tutsi dominated private sector (Storey, 1999, pp.53-55). Second, the issue of land scarcity and agricultural commercialisation will be assessed as Rwanda suffered a severe socio-economic imbalance (Uvin, 2001, pp.81-83).

The conclusion will summarise that SAPs, in combination with demands for democratisation and peace negotiations, did not consider the implications of the reforms for the socio-economic and political environment. The disregard for the wider implications supported radical ideologies which were responsible for the genocide.

The structure of western capitalism was first evaluated by British philosophers and political economists in the seventeenth and eighteenth century (Peet, 2009, p.4). In the eighteenth century Adam Smith (1776), cited by Rothschild (1994, p.319), emphasised the “invisible hand of the market” which would enable growth by focusing on demand, competition and trade. This approach became known as classical liberalism. The early and mid-twentieth century was shaped by depression and war. Benefits of capitalism remained in the hands of the entrepreneurs and the employees demanded more rights and increased benefits in return for their labour (Peet, 2009, p.6). Keynes argued that governments have to intervene in the market in order to spread the benefits of market economies among all classes of society. This approach became known as the “New Deal” in the US and its policies were implemented from 1932 on (Niemi & Plante, 2011, p.414; Peet, 2009, p.6).

In 1944 the Allied countries met in Bretton Woods to discuss the post-war economic order (Rowden, p.2009, p.53). Their aim was to implement institutions which could finance the rebuilding of Europe and oversee international trade and finance to avoid a financial crisis in the future. Keynes is often accredited with the establishment of the IMF and World Bank. However, Keynes did not suggest the IMF and World Bank in the form the institutions were finally set up. He was rather focused on maintaining trade balances between states. The IMF was established to ensure a fixed exchange which tied currencies to the US Dollar and gold standard (Rowden, 2009, pp.55-56). The World Bank was to finance the reconstruction and development of the European economy. From the mid-1970s on Keynesianism was opposed by neoliberals who advocated the ideas of classical liberalism and argued in favour of privatisation of state-run enterprises and deregulation of the market (Peet, 2009, p.9; Palley, 2004, pp.1-2).

Palley argues that neoliberalism is based on the assumptions that factors of production, such as labour and capital, are automatically allocated in the most efficient way. Von Hayek, the most influential critic of Keynesianism, argued that the freedom of individuals to pursue their own ambitions and limited possibilities for governments to interfere in the market are essential for economic growth (Peet, 2009, pp.10-11). In the 1970s it became evident that Keynesianism was not able to solve problems of stagflation and businesses and corporations started to support neoliberal ideas of deregulation (Peet, 2009, p.12). Further, the ideological conflict during the Cold War period increased the support of neoliberal ideas. Individualism was associated with a free society. Collective action and limitations on the market were related to communism (Palley, 2004, p.3). The administrations of Thatcher and Reagan adopted neoliberal policies in the early 1980s and many Western governments followed suit (Auerbach, 2007, p.33). The IMF changed its purpose and was now tasked to support developing states by providing financial support in the form of loans (Wayenberge, Fine, Bayliss, 2011, p.6).

During the time of Keynesian policies, developed states tolerated and even encouraged state interventions in developing states (Babb, 2005, p.200). However, the emergence of neoliberalism led to a change in development policies. The key characteristics of neoliberal development policies were laid down in the Washington Consensus (Auerbach, 2007, p.37 in Roy, Denzau, Willett). The policies of the Washington Consensus demanded financial deficits which are not higher than affordable. Further, expenditures were supposed to focus on benefits, health, education and infrastructure. In addition tax collection had to be more efficient, trade had to be liberalised and controls for exchange rates had to be removed. State owned enterprises had to be privatised and incentives for foreign direct investments (FDI) had to be established (Auerbach, 2007, p.37).

During the 1970s many developing states were unable to service loans taken during the oil crisis in 1973/74 (Rowden, 2009, p.65). The IMF agreed to the restructuring of the debt if the debtor states implemented SAPs. Further, the IMF demanded that in the future multilateral and bilateral aid was only to be paid after the approval by the IMF. States which were unwilling to implement SAPs were threatened with the withdrawal of future support by the IMF and World Bank. Other donors, such as multilateral institutions, bilateral donors and private banks, followed the guidance by the IMF and denied financial support if the IMF advised against it (Rowden, 2009, pp.66-68). Critics, such as Lapeyre (2004), cited by (Rowden, 2009, p.66), opposed these measures and argued that SAPs lead to a loss of state autonomy. Fiscal policies were dictated by the IMF and World Bank and states were unable to choose their own development policies. However, Reagan and Thatcher made clear that market liberalisation was the only alternative and donor agencies, central banks and many developing states believed in neoliberal policies (Sachs, 2005, p.81; Rowden, 2009, pp.68-69). Further, many developing states adopted these measures in the hope of becoming members of the World Trade Organization and in order to attract FDI.

Neoliberal policies are opposed by advocates of the dependency theory and world system theory. During the decolonialisation process after World War II advocates of the modernization theory argued that all states follow the same path from poverty to modernization (Rowden, 2009, p.57). Due to poverty and slow or non-existent development towards the end of the 1960s it became clear that former colonies could not follow the development path which was taken by developed countries in the past. Dependency theory draws its ideas from Marxism and argues that the intrastate division between the proletariat and bourgeoisie equals the interstate relations between the core and the periphery (Kelly, 2008, p.320). Proponents of the dependency theory, for example Prebisch (1950) and Frank (1967), wrote that former colonies became economically and politically dependent on their former colonial powers. Subsequently, the dependence of periphery states on the core states is the main characteristics of the global economy.

These claims were further developed by Wallerstein (1980, pp.66-69) who supported the world systems theory and argued that the periphery is exploited by the core states of mainly North America and Europe. The world system theory claims that the global economy is characterised by a well developed core based on high technology and a highly skilled labour force which requires a periphery from which it can extract surplus (Chirot & Hall, 1982, p.85). Advocates of both theories argue that developing states have to resist a post-colonial system of trade and finance in which states of the periphery serve the role of commodity producer and provider of cheap labour. Otherwise the states of the periphery will not be able to move towards industrialisation and remain dependent on the states of the core (Rowden, 2009, p.57).

Harrison (2010, p.36) writes about the impact of neoliberal policies in Africa and argues that socio-economic recovery was not achieved to date. Harrison (2010, p.39) cites Chazan et al. (1999) who writes that by the end of 1980s thirty six states in Africa implemented SAPs and ten years later the economy of twenty nine African states were still shaped by adjustment programmes. Harrison (2010, p.39) describes SAPs as the “development orthodoxy for the continent”. In some cases the SAPs considered country specific circumstances, but the key elements of all SAPs remained the same and mirrored the policies of the “Washington Consensus”.

The implications of SAPs and demands which accompanied these became evident in Rwanda in the early 1990s. The Rwandan Genocide of 1994 during which 800,000 Tutsis and moderate Hutus were killed has been widely covered in the media and in academic work (Kamola, 2007, p.571; Magnarella, 2005, p.816). However, the implications of an economic crisis and subsequent reforms in the early 1990s were hardly mentioned (Chossudovsky, 1997, p.111). The post-colonial economy of Rwanda was dominated by coffee exports which made up eighty percent of the state’s export earnings (Chossudovsky, 1997, p.114). In the early 1980s the supply of food per capita decreased due to environmental degradation and further population growth (World Bank, 1991a, p.v; Storey, 1999, pp.49-50). Furthermore, in 1986 the commodity prices for coffee started to decrease due to overproduction and Rwanda lost nearly two thirds of its revenue generated by coffee exports (Kamola, 2007, p.583). The GDP per capita fell by nearly 30 percent and poverty increased from 40 percent in 1985 to 53 percent in 1992 (Uvin, 1998, p.54; World Bank,1994, i). The civil war between the Hutu dominated government and exiled Tutsis in Uganda who established the RPF and attacked Rwanda from 1990 on further deteriorated the financial situation of Rwanda (Magnarella, 2005, p.812; Uvin, 1998, pp.55-56).

Financial resources were focused on the war effort and the displacement of large numbers of the population further decreased agricultural production. In order to maintain its expenditures the Rwandan Government had to increase its foreign debt significantly (Kamola, 2007, p.584; Prunier, 1995, p.159). Moreover, farmers were guaranteed by the government to receive a fixed amount for their coffee production. This amount was decreased by 20 percent in order to reduce government spending (Kamola, 2007, p.584). As a result many farmers replaced their cash crops with food crops as the sale of coffee did not cover the investments anymore.

In 1991 Rwanda received $90 million of loans from the World Bank (Uvin, 1998, p.58; Kamola, 2007, pp.583-585). In return the Rwandan Government had to agree to the implementation of SAPs. Fiscal discipline was expected, the government had to privatise large numbers of state owned enterprises and markets were to be liberalised. Despite the increasing socio-economic imbalance the World Bank recommended that the focus should be on cash crops rather than food crops in order to increase export earnings. The World Bank argued that the earnings could be used to purchase food – “once you have income you can buy food” (World Bank, 1991a, p.vi; p.xi). Coffee exports were supposed to be increased, inter alia, by a devaluation of the Rwandan Franc.

However, the devaluation led to an inflation of nearly 20 percent in 1992. According to the World Bank (1991b, p.4) the benefits of structural adjustment loans would include increased employment in the private sector. Moreover, the civil service was considered as ineffective and had to be reformed (World Bank, 1991b, p.16).) Fees for education, water supply and medical care were raised and sales tax was increased (Uvin, 1998, p.58; World Bank, 1991b, p.6). Despite these measures the Rwandan foreign debt increased further. Uvin (1998, p.59) argues that the SAPs are not responsible for the financial pressure on many Rwandans since the majority of them were never implemented. However, this argument is opposed by a report in which the World Bank (1997, p.12) claims that most of the reforms were indeed implemented by the Rwandan Government.

To assess the implications of the IMF and the World Bank in the build-up to the genocide it is essential to widen the scope of this evaluation. This is necessary in order to include the demands for democratisation and peace negotiations which were made in return for financial aid (Andersen, 2000, pp.447-450; Uvin, 1998, p.59). Andersen (2000, p.450) argues that the establishment of a democratic system is necessary to establish stability and to promote development. Nonetheless, it is of significant importance to choose the right timing in order to ensure political unity during the peace process. Opposing views during a peace process may destabilise the consolidation process. Due to the pressure of the IMF and World Bank a new Rwandan Government was formed in 1992 and the opposition parties increased their power (Adelman & Suhrke, 1996, cited by Andersen, 2000, p.449).

Radical parties, such as the “Coalition pour la Défense de la République” (CDR) and the “Mouvement Démocratique Républicain” (MRD), were established and openly presented their anti-Tutsi ideology. Both parties played a significant role in the spread of hate speech and the preparation and implementation of the genocide (Andersen, 2000, p.449). In addition, as part of the peace process the then-President of Rwanda Habyarimana agreed to a power sharing deal with the RPF. The CDR and MRD accused the government of not being determined enough to oppose the RPF and gained significant support amongst Hutu elites (Prunier, 1995, p.128). However, to meet the demands of the Rwandan Government and the donors at the same time proved to be an obstacle Habyarimana could not overcome. Andersen (2000, p.451) described the conditions made by international donors as “a match igniting the conflict”.

In order to establish a link between the genocide and the SAPs it is necessary to assess these in the wider context of the Rwandan labour market and the resource scarcity which occurred in Rwanda (Storey, 1999, p.51; Uvin, 2001, pp.81-83). Middle and upper level positions in the public service and the military were only available to Hutus and due to government sponsored discrimination Tutsis focused mainly on the work in the private sector (Storey, 1999, p.51; Prunier, 1995, p.75). As part of the democratisation process a new liberal party emerged and the common perception was that this party was dominated by Tutsi businessmen. Hutu extremists claimed that Tutsis attempted to set up a commercial elite in Rwanda in order to redirect funds to the RPF (Storey, 1999, p.51). However, most of the businessmen in Rwanda were Hutu and the large majority of Tutsis had the same living standard as Hutus (Woodward, 1996, cited by Storey, 1999, p.52). The nexus between SAPs and the division of labour is, in the social context of pre-genocide Rwanda, to be found in hate speech which established perceptions rather than facts. As mentioned before, SAPs demanded increased support of the private sector and cuts for the public sector. Therefore, the perception was that Tutsis were favoured by the SAPs and many Hutu elites in the public sector feared to lose their employment and subsequently influence.

Uvin (2001, p.82) argues that resource scarcity can be assessed using the Malthusian argument according to which land scarcity and overpopulation lead to conflict or famine. This argument is supported by a statement made by the Ogata, the UN High Commissioner for Refugees (Berry & Berry, 1999, quoted in Uvin, 2001, p.82). Ogata argued that the conflict in Rwanda was based on a severe imbalance between the size of the population and available land. Land scarcity has to be considered in reference to the SAPs as the IMF and the World Bank demanded that the agricultural sector should focus on cash crops, e.g. coffee and tea, in order to increase revenues. The amount of food crops was to be reduced, but the decline in commodity prices did not create the revenues Rwanda hoped for. The statement: “once you have income you can buy food” (World Bank, 1991a, p.vi; p.xi) did not apply in Rwanda as income did not increase. Subsequently, the imbalance between the amount of food available and the population increased further (Magnarella, 2005, p.817).

Wood (2001, p.64) argues that especially in poorer states ethnicity plays a significant role in economic and social differentiation. Poverty, overpopulation, land scarcity, possible famine and competition for power offer fertile ground for the ideology of Lebensraum. This ideology is advanced by extremist forces in order to accumulate resources which are currently not available to their people. This ideology was implemented in Rwanda to describe Tutsis as invaders who are responsible for the socio-economic imbalance. Prunier (1995, p.160) writes that the combination of low coffee prices, the war and SAPs only further damaged an already weak economy and increased the financial pressure on many Rwandans.

The development policy of the industrialised states changed with the emergence of neoliberal policies. Neoliberals argued in favour of the liberalisation of markets and decreased influence of the government. Development policies became enshrined in the Washington Consensus which argues that SAPs would lead to economic stability. Government spending was to be reduced, privatisation of government owned enterprises was demanded and the currency was supposed to be devalued in order to increase exports. Advocates of the dependency theory and world system theory claimed that neoliberalism is not suitable to foster development, but instead increases the dependency of the periphery states on the core states. In the case of Rwanda it is evident that SAPs worsened the economic situation of Rwanda. Further, the SAPs had significant effects on the wider social and political environment. Demands for democratisation and peace negotiations led to the emergence of radical parties which took advantage of the fears of many Rwandans. People feared poverty, job loss and a famine in addition to a civil war. The causes of the genocide are multiple and no direct link can be established between the demands made by the IMF and World Bank and the genocide. However, in hindsight it is evident that demands for SAPs accompanied by demands for democratisation and peace agreements did not consider the wider political and social context. These factors helped to create an environment in which Hutu radicals found a significant number of Rwandans who supported their ideology which subsequently led to the genocide.

Bibliography

Andersen, R. (2000). How multilateral development assistance triggered the conflict in Rwanda. Third World Quarterly, 21(3), 441-456.

Auerbach, N. (2007). The meanings of Neoliberalism. In R. Roy, A. Denzua & T. Willett (Eds.), Neoliberalism: National and regional experiments with global ideas (pp.26-50). New York: Routledge.

Babb, S. (2005). The social consequences of structural adjustment: Recent evidence and current debates. Annual Review of Sociology, 31, 199-222.

Bayliss, K; Fine, B.; Van Wayenberge, E. (2011). The Political Economy of Development. The World Bank, Neoliberalism and Development Research. London: Pluto Press.

Chirot, D. (1982). World System Theory. Annual Review of Sociology, 8, 81-106.

Chossudovsky, M. (1997). The globalisation of poverty: Impacts of IMF and World Bank reforms. London: Zed Books.

Harrison, G. (2010). Neoliberal Africa: The impact of global social engineering. New York: Palgrave McMillan.

Kamola, I. (2007). The Global Coffee Economy and the Production of Genocide in Rwanda. Third World Quarterly, 28 (3), 571-592.

Kelly, R. (2008). No “return to the state”: dependency and developmentalism against neoliberalism. Development in Practice, 18(3), 319-332.

Magnarella, P. (2005). The Background and Causes of the Genocide in Rwanda. Journal of International Criminal Justice, 3, 801-822.

Nienmi, W. & Plante, D. (2011). The Great Recession, Liberalism, and the Meaning of the New Deal. New Political Science, 33 (4), 413-427.

Palley, T. (2004). From Keynesianism to Neoliberalism: Shifting paradigms in economics. Received, October 15, 2011 from http://www.thomaspalley.com/docs/articles/selected/Neo-liberalism%20-20chapter.pdf

Peet, R. (2009). Unholy Trinity: The IMF, World Bank and WTO. New York: Zed Books.

Prunier, G. (2002). The Rwanda Crisis, 1959-1994: History of a Genocide. London: Hurst.

Rothschild, E. (1994). Adam Smith and the Invisible Hand. The American Economic Review, 84 (2), 319-322.

Rowden, R. (2009). The deadly ideas of neoliberalism: How the IMF has undermined public health and the fight against AIDS. New York: Zed Books.

Sachs, J. (2005). The end of poverty: How we can make it happen in our lifetime. London: Penguin Books.

Storey, A. (1999). Economics and Ethnic Conflict: Structural adjustment in Rwanda. Development Policy Review, 17, 43-63.

Storey, A. (2001). Structural adjustment, state power and genocide: the World Bank and Rwanda. Review of African Political Economy, 28 (89), 365-385.

Uvin, P. (1998). Aiding Violence: The development enterprise in Rwanda. West Hartford: Kumarian Press.

Uvin, P. (2001). Reading the Rwanda Genocide. International Studies Review, 3(3), 75-99.

Wood, W. (2001). Geographic Aspects of Genocide. A Comparison of Bosnia and Rwanda. Transactions of the Institute of British Geographers, 26(1), 57-75.

Wallerstein, I. (1980). Capitalist World Economy. London: Cambridge University Press.

World Bank (1991a). Rwanda – Agricultural Strategy Review. Retrieved November 24, 2011, from http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK= 64193027&piPK=64187937&theSitePK=523679&menuPK=64154159&searchMenuPK=64258544&theSitePK=523679&entityID=000009265_3960929124407&searchMenuPK=64258544&theSitePK=523679

World Bank (1991b). Rwanda – First Structural Adjustment Programme Project. Retrieved November 24, 2011, from http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64154159&searchMenuPK=64258544&theSitePK=523679&entityID=000009265_3961001071959&searchMenuPK=64258544&theSitePK=523679

World Bank (1994). Rwanda – Poverty Reduction and Sustainable Growth. Retrieved December 10, 2011, from http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/1994/05/16/000009265_3961005150245/Rendered/PDF/multi0page.pdf

World Bank (1997). Rwanda – Emergency Reintegration and Recovery Credit. Retrieved December 10, 2011, from http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2000/02/24/000009265_3971023104010/Rendered/PDF/multi_page.pdf



Written by: Thomas Hauschildt
Written at: University of Portsmouth
Written for: Global Political Economy
Date written: 12/2011

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Monday, March 31, 2014

(STICKY) Chikwanda on growth, poverty
By Editor
Sat 29 Mar. 2014, 14:00 CAT

COMMENT - If anyone is still impressed by neoliberal economics, I would suggest checking out two books:

Reclaiming Development, by prof. Ha-Joon Chang

23 Things They Don't Tell You About Capitalism, by prof. Ha-Joon Chang
- MrK

Finance minister Alexander Chikwanda says Zambia's current economic growth is not sufficient to reduce poverty. It is indisputable.

And despite what may be said to be "impressive economic growth" over the last decade, poverty levels are still high. Why? There is need to look at where this growth is coming from and where that growth is being consumed. Who is that growth really benefitting?

It is true that Zambia is lagging behind countries such as South Korea in reducing poverty despite the two nations' gross domestic product being at the same level at the time of our independence in 1964. As Chikwanda correctly observes, in 1964, Zambia's GDP stood at US$3 billion, while that of South Korea was US$3.8 billion. And currently, South Korea's GDP is 55 times higher than that of Zambia.

In 1961, eight years after the war with North Korea, South Korea's per capita income stood at US$82, less than half of Ghana's at the time (US$179). An internal USAID report in the 1950s described South Korea as a "bottomless pit". At the time, its main exports were tungsten, fish and other primary commodities. Today, South Korea is an industrial powerhouse, with per capita income in five digits.

It took the United Kingdom over two centuries - between the late 18th century and today - and the United States around one and half centuries (the 1860s to the present day) to achieve the same result. South Korea's progress is as if Malawi has turned into Switzerland.

General Park Chung-Hee, the father of South Korea's miracle, came to power in a military coup in 1961 and then went on to win three successive elections. Not democratic in the true sense of the word, Park propelled the country's success via Five Year Plans for Economic Development, which had a lot of indigenous economic empowerment schemes built into them. South Korea was developed by South Koreans.

Yes, they did everything possible to attract foreign investment but they were not totally dependent on it. They were more dependent on their own initiatives, on the contributions of their own people. The South Korean people were in the driving seat of their country's economic life. We are not. And very few in Africa are.

We are so dependent on the extractive industries in which we play no role. Even our government's role in it is very weak and in most cases, very easy to manipulate in terms of policy choices.

Variable foreign currencies were really the blood and sweat of South Korea's "industrial soldiers" fighting the export war in the country's factories. Those squandering foreign exchange on frivolous things, like illegal foreign cigarettes, were seen as traitors. Foreign travel was banned unless you had explicit government permission to do business or study abroad. The government took absolute control of the scarce foreign exchange, and violation of foreign exchange controls could be punished by death. Here in Zambia today, we are squandering the meagre foreign exchange we are earning in all sorts of ways. We do not have even ways of ensuring that whatever foreign exchange the country earns is accounted for. We have just removed very good statutory instruments - SI 33 and SI 55 - that were designed to maximise the country's use and benefits from its foreign exchange earnings. Pressure was mounted by foreign businesses and their local political agents and other representatives. Today in Zambia, one can export anything and keep the money abroad, bringing in only that which one needs to pay for local inputs. The SIs we have removed tried to mitigate that. But the government was being blackmailed - blackmail that resulted in the kwacha depreciating at a very fast rate.

How does a country like ours expect to develop when its important earnings are kept in other countries and for use by other countries? This is all being done in the name of economic liberalisation. This is not economic liberalisation, it is economic foolishness. Even the South Africans, with more money, a bigger economy than us, are not doing these senseless things we are doing. The rand was depreciating at some point but the South African government did not panic and allow itself to be blackmailed.

We should learn from South Korea. What South Korea actually did during these decades was to nurture certain new industries, selected by the government in consultation with the private sector, through all forms of government support until they "grew up" enough to withstand international competition.

The government owned all the banks, so it could direct the lifeblood of business - credit. Some big projects were undertaken directly by the state-owned enterprises. The government also took foreign investment under its wing, and heavily controlled it with a mixture of measures. In general, it welcomed foreign investment with open arms in certain sectors and shut it out completely in others, in line with the national plan at any one time.

And here comes the rub: the popular impression of South Korea as a free trade economy was created by its export success. But export success does not require free trade, as Japan and China have also shown.

Clearly, the South Korean economic miracle was a result of clever and pragmatic mixture of market incentives and state direction. We are where we are today because of our failure to come up with clever and pragmatic initiatives. We have allowed other people to see things for us, decide things for us, do things for us. If we think we can make progress this way, we are deceiving ourselves.

We are one of the easiest countries to manipulate. We get so excited with any little praise from foreign investors, the World Bank, the International Monetary Fund and other donors. We are more interested in what these people say about us than anything else. But look at what South Korea did! Does it fit in the paradigms that are being bandied around by the agents of neoliberalism whom we seem to respect and listen to so much?

The example of South Korea Chikwanda is giving is a very good one. But it is important not to just throw around figures or statistics but to truly understand the substance, and not just form, of what really went on there to give them the development they are enjoying today and they so much deserve.

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Friday, March 28, 2014

(NEWZIMBABWE) Gonophobia: How easily people forget
20/12/2013 00:00:00
by Reginald Shoko

FOR many years now the name Dr. Gideon Gono has stood for different things and aroused equally divergent opinions within Zimbabwean society.

This self-made man who, we are told, through personal industry and great determination rose from a mere ‘tea boy’ (Zimbabwean parlance which denotes a general hand specifically hired for brewing and serving tea), to a banker of note and later governor of the Reserved Bank of Zimbabwe, an avid reader, writer and Dr. through actual research and thesis submission.

During the lean and leaner years of hyper-inflation and shortages of just about everything the name Dr. Gono stood for a juggler, a wrestler struggling to pin down the negatives of a currency whose value was lost sooner than the ink dried on the paper. He became Mr. Bearer cheques. Then he was fighting what seemed an endless chain of economic challenges, to use his favourite term.

This was well before the international credit crunch and the large scale printing of money also happened in the USA to save their economy which was in tail spin and two or so trillion American Dollars later their automotive businesses are ticking again and foreclosures halted somewhat, well, the rest is history really.

When agriculture needed support after the new land ownership order presented the country with the challenge of equipping the newly resettled farmers with equipment and inputs to kick start a new revolution post the land re-distribution, Gono again emerged as the master of creativity driven by the reality that the country faced exceptional circumstances and, as such, extraordinary measures were needed and many up to today in government, Zanu PF, and society in general are herding ‘Gono’ supplied cattle, tilling the land using Dr. Gono supplied tractors etc.

Many Zimbabweans agree that this particular period of our nationhood represents the most difficult and painful period surpassed nationally at least, only by the liberation struggle. It is also agreed generally now that while Gono was, like most Zimbabweans, let down by politics. Hated for his quasi-fiscal activities, his actions kept Zimbabwe ticking with a lot of pain shared by all citizens and he was well defended by members of Zanu PF and the military chiefs at some point against the ire of the MDCs in the main before they too, convinced by his good intensions, warmed up to him and defended him during the days of the coalition government.

One only needs to listen how the MDCs have come out guns blazing defending his right to choose a lawyer of his liking to realize that there is no bitterness for the man. Today he is known as a successful business man and economic player in our country with interests in agriculture and many other spheres. It is this part of Gono’s life which faces a challenge through the accusations and court proceedings soon to unravel. It is now common cause that Gono is accused of corruption and using his position at the helm of the RBZ to enrich himself.

We now know that his chief accuser, Munyaradzi Kereke having been advisor to Gono, lost all sentiment for his former boss for reasons still unknown but hopefully soon to become clearer through the court case where Gono will be represented by Tendai Biti who, besides being a qualified and registered lawyer who runs a law firm in Zimbabwean, is also the secretary general of the opposition MDC-T party. This political side of Biti’s credentials has caused much consternation in Zanu PF.

It is this latest development in the former governor’s endeavours, that of his foray into the political maze via a Zanu PF senatorial list which he is likely to be conferred as recently confirmed by the politburo which has raised all manner of concern and political tsoro. Gono’s entry into the shark-infested political waters so muddied to the core by the now confirmed factionalism euphemistically referred to as bhora musango in Zanu PF lingo has quite naturally been further heated up by his choice of legal representation.

There is clearly something that his new found political opponents have known and possibly feared all this while. It is interesting that the self same Kereke who has become some form of the blazing arrow head in the anti-Gono movement has had his own matters political within the liberation party. Political rumour has it that his saving grace has been his suspected leaning towards a certain pole crocodile farming camp in the faction riddled party.

The appetite and energy for nipping and destroy Gono’s political bud is amazing in the least. So hot and determined have been the major but hidden players such that a poor state media editor has had to face the music for over relying on these “sources” who are linked to the military and a politburo member who, when seeing the danger presented by this juvenile exposure and possibly fully knowing that the former governor himself does have an ear of certain steely quarters within the establishment, beat a hasty retreat leaving the poor chap recently appointed to take it on the chin for the team.

Clearly the attack on Biti’s selection as legal representative is a smoke screen and Gono seems to know this judging by his confidence which comes out clearly in his speech, itself a form of broadside and declaration of innocence and stoic political determination points to a grander plan yet. It is with no doubt the beginning of an interesting dance which might see us all well entertained.

The fear factor is intriguing and leaves one wondering just where the whole thing is going or better still what will become of Gono? Is he destined for the politburo, cabinet or is there something grander and more spectacular which is quite plausible because all this fear and rancour must be based on something known only by those who hold the political fear.

For now Gono has dared all and uttered the George Bush refrain: Bring it on. His confidence and determination surely suggests a man who knows what the time is. We are in for a dose of a new Zimbabwe, a new beginning, no doubt. We will watch closely as the court battle begins and wait with bated breath for another instalment in the series; This is the life of Dr. Gideon Gono.

Reginald Shoko is a business consultant based in Bulawayo.

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(NEWZIMBABWE) We should learn from, not just Look East
21/12/2013 00:00:00
by Brian Kazungu

THE Zimbabwean government adopted the look East Policy after falling out with the West. This look East Policy has however not been of much help to the country because - just like the name implies - it is merely a look at the East rather than to look, learn, engage and adopt what the East is doing when compared to what is happening and being achieved in the East especially by a country like China.

There is too much activity in China so far, as an independent state as well as in its cooperation with the other countries all over the world. And, therefore, considering the progress that is so evident in the economies of the East especially China it would be difficult for any country to interact with them and fail to register economic progress. As such if our Look East policy was meant to look, learn and apply, Zimbabwe could have reverted back to its coveted status of being the bread basket of Africa and could have achieved other accomplishments worth of positive global attention.

China’s economy is being premised on its ability to interact with other countries including the United States of America, Britain, Germany and other European countries. Multimillion dollar transactions have been signed between China and these countries in which China has opened up for investment from these countries while Chinese investors are being welcomed to reciprocate the favour.

In one notable case the Chinese investors have been welcomed and thanked by the British premier, David Cameron, for a deal in which they are going to invest in the nuclear energy facility and the HS2 rail projects in Britain. Cameron said the people of Britain would not be disturbed by the nuclear project since it is not going to be funded by their taxpayer’s money but was going to be funded by the Chinese investment.

China and America also have a number of initiatives for mutual benefit including the Educational Exchange program among the 100 000 strong initiatives launched in 2010 in Beijing by then American Secretary of State Hillary Clinton. As reported in local media, China did engage some funds close to $198 million from 1990 to 2010 in seed funding for the Chinese student studying abroad who choose to come back and work in China. China was also said to have adopted its Thousand Talents Plan in 2008 in a move through which the government is trying to convince the overseas Chinese to return home in order to close the talent deficit resulting from brain drain. Under the plan returning top scientists and entrepreneurs are offered as much as $150,000 in cash, office and laboratory space, housing allowances and school entry for children.

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China has also another long term plan set to run from 2010-2020 called the Medium and Long Term Talent Development Plan which aims to attract 2,000 specialists in IT, Biotechnology, aerospace, environmental protection, agricultural technology and transportation. A leading American university, the Massachusetts Institute of Technology has seen it fit to engage China as evidenced by what Victor Zue, MIT Electrical Engineering and Computer Science Professor and Chairman of the MIT Greater China Strategy Working Group reflected on behalf of his boss Rafael Reif who said if they don’t engage China now, 10 years from now they will have to take a number two.

Vending encouraged … Bananas being sold on the streets, Guangzhou

All these achievements and strides demonstrate that China needs to be engaged and learnt from not just to be looked at. China is a vast expanse of land with a booming economy but unlike Zimbabwe the Chinese do allow vendors to sell their wares freely on the streets without victimization by the city councils and the national police. Transport problems are easily contained by the fact that there is extensive use of buses, registered taxis and even motorbikes that ferry people from one place to another. In Zimbabwe, however, transport operators are in constant clashes with the authorities a move which interferes with productivity and efficiency, hence a decline in GDP.

There are a lot of family-owned small or backyard business in almost every street in China which brings goods and services closer to the people while at the same time encouraging a business mentality in the community. Family-owned businesses help to promote an entrepreneurial spirit in the family even from childhood level since the children have a chance to observe and participate in the family income generating projects. Considering the vast amounts of underutilized land in Zimbabwe, there is no excuse for the current housing shortages compared to China where it is almost difficult to find an open unutilized space.

In addition, Chinese people that are in China are a humble and very accommodating people chiefly because of the fact that almost every family has a business of some sort to mind and therefore customer-service ends up translating into a societal way of interaction where people are respected across the board since there is a chance that every person is a potential customer.

Zimbabwe’s problem is that the country has merely looked East rather than engaging with the East and doing what the East is doing. We must stop this business of shunning the West and only dealing with China. Because China has extensive commercial dealings with the West, this only means we are engaging the West through a third party and third party transactions tend to be costly as was demonstrated with our diamond deals which cost the country huge amounts of money.

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Thursday, March 27, 2014

(BLACK AGENDA REPORT) Nelson Mandela, Free Market Capitalism and the South African Crisis
Tue, 12/17/2013 - 21:17 — Anthony Monteiro

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by Anthony Monteiro

The veil must be lifted from the deliberations and machinations that led Nelson Mandela and the African National Congress to discard the people’s Freedom Charter in favor of an accommodation with white capital, in the early Nineties. Why, at South Africa’s most critical juncture, did the ANC make a pact with the Devil? And why did they keep it?

Nelson Mandela, Free Market Capitalism and the South African Crisis
by Anthony Monteiro

“The decision against nationalization has left the people worse off than when Mandela was elected in 1994.”

Why and when did Mandela change his mind about nationalization of the wealth of South Africa? And what have been the results? I find the mainstream media’s accounts, citing Mandela’s claim that he changed his mind at Davos, Switzerland, in 1992 implausible. More troubling is why when Mandela and the ANC led government saw things going so badly for the people they didn’t change course? These questions arise as we try to make sense of Mandela’s legacy. This is especially important in light of the catastrophic crisis of poverty, hunger, unemployment, education and health care besetting the South African people. The decision against nationalization has left the people worse off than when Mandela was elected in 1994. White economic privilege remains the same, and their wealth exponentially increased, a tiny, rich and mostly parasitic black bourgeoisie and a black middle class have been created. For 90 percent of the African population things have not improved.

The New York Times reported on December 10 that Nelson Mandela’s change of thinking occurred at Davos, Switzerland, at the World Economic Forum (the annual meeting of the major bankers, capitalist, entrepreneurs, celebrities, politicians and intellectuals tied to the neo liberal globalist model of the world economy) in January 1992. Tito Mboweni, a former governor of the South African Reserve Bank (that nation’s Central Bank), who accompanied Mandela to Davos, says when Mandela and the ANC delegation arrived Mandela had a speech written by the ANC that focused on nationalization. Mboweni says “we discussed this at some length and decided that its content was inappropriate for a Davos audience.” Mboweni drafts another speech that was friendly to the Davos crowd. The speech was vague and filled with clichés and platitudes and assured the audience that they had nothing to fear from Mandela or the ANC.

In a letter to the Sunday Independent last January Mboweni says it was meetings with representatives of the Communist parties of China and Vietnam that changed Madiba’s mind completely. According to Mboweni the Chinese and Vietnamese told Mandela “We are currently striving to privatize state enterprises and invite private enterprise into our economies. We are Communists Party governments, and you are a leader of a national liberation movement. Why are you talking about nationalization?” According to Anthony Sampson, the author of Mandela: The Authorized Biography, Mandela told him “They changed my views altogether. I came home to say: ‘Chaps we have to choose. We either keep nationalization and get no investment, or we modify our own attitude and get investment.’”

”The path to Mandela’s radical change of mind involved more than conversations during a five-day meeting in Davos in 1992.”

It is obvious that the ANC, the South African national liberation struggle and the nation as a whole were at a critical juncture. They were faced with problems of consolidating political power and moving the nation towards economic emancipation. On the other side, the white regime and its backers in the West were concerned with making concessions to black South Africans that would not disturb western corporate control of this mineral rich and strategically located economy. However I find the accounts of Mr. Sampson and Mr. Mboweni implausible. In other words, the path to Mandela’s radical change of mind involved more than conversations during a five-day meeting in Davos in 1992.

The first question is about the representatives of China and Vietnam. Both nations in 1992 were at different levels of economic development. Vietnam was still in the social and economic reconstruction phase after 25 years of war against foreign aggression. China was a socialist economy that twelve years earlier had entered upon a path of reform within its socialist economy. China at that time had about 80 to 90% of the strategic parts of its economy under state control. Vietnam was similar with the state controlling economic reconstruction. Even today close to 70% of China’s economy is under state control. The most technologically dynamic and profitable sector of the Chinese economy is the state, or nationalized sector. The facts are that China and Vietnam are heavily state dominated economies and each says the objective of their economic planning is to build advanced socialism. Even if we accept that the Chinese and Vietnamese representatives at Davos said what Mboweni says, the next question is who were they and did they represent the official positions of their governments? If we accept the mainstream media’s accounts, they must have been saying, “do as we say, not as we do.” Of course this would have been an instance of unbelievable bad faith, even cynicism. But on this matter, rather than looking to the Chinese and Vietnamese delegates, I think we should question Mr. Mboweni ‘s and Mr. Sampson’s account.

The second point is that when Mandela emerges from prison two of his and the ANC’s most important allies were Cuba and Libya, two nations whose economies were heavily nationalized. Why did Mandela not consult Fidel Castro and Muammar Gadaffi among others to get a more complete view on how well nationalization was working or not working in their nations?

”The decisions made by Mandela and the ANC thwarted a robust transition and allowed the old system to remain pretty much intact.”

The third point, any nation emerging from a long period of civil war and national liberation, experiencing a radical transfer of power, necessarily goes through a period of transition. It is ludicrous to think that sober minds, especially those with the training of most of the ANC, could underestimate a transition where something like a New Deal for the people, including a jobs and infrastructure programs, an anti-poverty crusade, health care, housing and political education, would not be considered necessary. No clear thinking person could have imagined an overnight great leap forward from a ravaged apartheid economy to an advanced socialist one. There would be a transition period of at least a decade where the groundwork would be laid for a new democratic and socialist economy. The forms of this transition would have many layers, even ambiguities, but its direction would be firmly established and based on the Freedom Charter and its call for nationalization. The decisions made by Mandela and the ANC thwarted a robust transition and allowed the old system to remain pretty much intact and thereby recklessly undermined the future of South Africa.

The more plausible scenario, from my perspective, is that Mandela and a small circle around him, long before Davos, perhaps in the last year or so of Mandela’s imprisonment, cut a deal. As we know Mandela entered into secret talks with the white regime before being released. These talks were kept secret from the ANC leadership. There were others in and outside of the ANC who were involved in secret talks about the economy well before 1990. By the time Mandela is released an agreement had been reached with the regime against nationalization. The question for Mandela and those in the ANC who supported him, was to get an appropriate time and place for Mandela to announce his change of position. There had to also be a plausible explanation of why such a drastic change. The Davos story fulfills both requirements, an appropriate place and a plausible story.

The fact that Mr. Mboweni, a free market capitalist, accompanied Mandela to Davos and had such power that he was allowed to trash the ANC speech and substitute for it his own, should raise further troubling questions about the behind scenes operations among the ANC elite. Why weren’t other views present in the ANC delegation at Davos? Or were they dismissed as “too radical” even before Davos?

”By the time Mandela is released an agreement had been reached with the regime against nationalization.”

Not long after the Davos announcement the ANC (or the free market and neo liberal elements within the ANC) announced that the first black government would assume the entire debt of the white regime. A sum of close to $25 billion. The ANC took an IMF loan to pay the debt, which came with severe strings attached that protected white control of the post apartheid economy. (see my article in BAR Dec 11 2013 for a further discussion of this). Mandela’s claim that he was turned around at Davos is questionable and his turn against the Freedom Charter and the aspirations of the masses of South Africa (who cherished the Freedom Charter as their manifesto of freedom and reflective of their freedom aspirations) is problematic.

Winnie Mandela has said repeatedly that when Mandela emerged from prison he was not the same man. She says his revolutionary resolve was different. What she probably meant is his change of heart on economic policy and his willingness to, as she saw it, make unnecessary compromises with white South Africans and Western interests. Ronnie Kasrils, former minister in ANC governments, a member of the ANC executive and a leader of Umkonto weSizwe recently wrote (The Guardian, June 23, 2013) that the decision against nationalization was a “Faustian bargain” with the white world that sold out the South African poor. Naomi Klein in her book The Shock Doctrine suggests the bargain was that in return for the ANC turning against The Freedom Charter and nationalization, the West would make Mandela a living saint.

In my BAR article “Nelson Mandela, The Contradictions of his Life and Legacies” I argue there are four stages in Mandela’s life. The fourth is 1990 to 2013. This is the most contradictory in terms of his previous revolutionary activity. However, it is as significant to understanding his legacy and life as the previous ones are. The burning question is in power what did he and his ANC colleagues do to liberate the nation from economic apartheid and foreign corporate control. At this point the answer is in power the ANC failed. The problem is not important only to South Africans or Africans, but for how humanity, especially its impoverished and destitute majority, imagines the future world and how we fight for it.

Anthony Monteiro is a professor of African American Studies at Temple University. He can be contacted at tmon(at)comcast.net.

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(BLACK AGENDA REPORT) Eyewitness to America Betraying Mandela's South Africa: The Gore - Mbeki Commission
Wed, 12/11/2013 - 11:12 — Marsha Coleman-...
by Dr. Marsha Coleman-Adebayo

Nelson Mandela's ANC leadership negotiated the form of the new South Africa on two tracks, the political wrangling in one set of meetings, & the decisions on the nation's economic future separately at another location, headed by Thabo Mbeki. The results were predictable, as Miriam Makeba said: "We got the flag, but they got to keep the money."
Eyewitness to America Betraying Mandela’s South Africa: The Gore – Mbeki Commission – Part I
by Dr. Marsha Coleman-Adebayo

"Soon after assuming my position I realized that something had gone terribly wrong."

At the dawn of the Nelson Mandela administration, I had the extraordinary privilege to sit at the table with the new African National Congress leadership as the Environmental Protection Agency /White House liaison to the Mandela government. My job was to work with the new ANC leadership to design and provide US technical environmental expertise to assist the majority population's recovery from the environmental and public health disaster the apartheid system imposed on it. This process took place through the flagship foreign policy vehicle, the US-South African BiNational Commission commonly called the Gore-Mbeki Commission or the BNC. All bilateral foreign policy activities between the US and South Africa took place through this Commission. A detailed account of these events can be found in my book: No FEAR: A Whistleblower’s Triumph over Corruption and Retaliation at the EPA.

As a graduate student and professor, I had been an anti-apartheid activist who marched with my colleagues in the Southern Africa Support Project (SASP) and TransAfrica in front of the South African Embassy to “Free Mandela” and to express our solidarity with the South African revolution. When I was offered the position of Executive Secretary to the BNC in 1995, I made it clear to the EPA—citing racist US foreign policy in other African countries—that I would not be a part of any diabolical scheme against the South African people. I was a supporter of the South African Freedom Charter and excited about helping the Mandela government implement environmental policies that would reverse decades of harmful and at times fatal policies towards the black majority. Soon after assuming my position I realized that something had gone terribly wrong. In a 1996 letter to my mentor, professor Noam Chomsky I wrote: "The Freedom Charter is not on the table. I’m heart broken to report that despite the blood sacrifice of so many activists, South Africa is entering a neo-colonial phase."

Vice President Al Gore said of the BNC: “I affirm that the people of the United States of America are committed to the strongest possible partnership with the citizens of South Africa." His counterpart, Thabo Mbeki, then deputy president of South Africa, proclaimed that he appreciated “this relationship of support and engagement for creating a better life for the people of this country.”

" Under a green banner, they were seeking to continue the previous relationship with Afrikaner leaders they had enjoyed while Nelson Mandela languished in prison for three decades."

CNN's description at the time of one aspect of BNC's mission was closer to the truth: a further goal of the BNC was to hold regular trade talks and cooperate in the fight against international terrorism.

There was a stark difference between the stated goals of the BNC and US political strategy. It would become evident that the functional goal of the environment committee of the BiNational Commission was to provide cover for the same US multinational corporations that had participated in the repression of South Africa during apartheid. Under a green banner, they were seeking to continue the previous relationship with Afrikaner leaders they had enjoyed while Nelson Mandela languished in prison for three decades.

I was the US official to whom the first reports of illness and death relating to vanadium mining were given by black South African union leaders and later by the new environmental leadership in the Nelson Mandela government. The US ignored these reports, choosing to protect American-owned multinational corporations that were operating in South Africa. The reports included symptomology of miners whose tongues were turning green, bronchitis, asthma, bleeding from bodily orifices, impotence in young, healthy male workers, cancers and ultimately death.

By 1996 US policy had not changed from the Reagan Administration—but the PR and public statements did—in response to growing US public outcries from the anti-apartheid movement and international human rights groups. Still, behind the scenes and in agencies like the EPA, the US role was business as usual.

As flowers adorn the front of the statue of Mandela at the South African embassy it is worth noting that the statue was paid for by the same corporate concerns that supported Mandela's incarceration including: the , The South African Mining Group, South Africa’s Synthetic Fuels, the chemicals giant Sasol, the South African Gold Coin Exchange and Standard Bank. These corporate co-conspirators think they can fool us with plaques, devotionals and crocodile tears.



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(NEWZIMBABWE) Moyo berates The Herald over Biti-Gono story
18/12/2013 00:00:00
by Staff Reporter

INFORMATION minister Jonathan Moyo dragged the State-run Herald newspaper over the coals Wednesday, accusing the Zanu PF-leaning publication of engaging in “political mischief propelled by cowardice&rdquo.;

Zimpapers, the Herald’s parent company, promptly announced that the paper’s editor, Caesar Zvayi, had been sent home on forced leave with “immediate effect.”

Moyo, whose ministry controls Zimpapers, was reacting to a story in the paper’s Wednesday edition which claimed that top Zanu PF officials were furious with former central bank governor, Gideon Gono.

According to the report, Gono had enraged the unnamed officials by hiring opposition MDC-T secretary general and former finance minister Tendai Biti to represent him in a Constitutional Court case where he is accused of corruption by his erstwhile adviser Munyaradzi Kereke, now an MP.

Kereke claims Gono looted millions of dollars from the central bank and wants the court to compel the anti-corruption commission to launch investigations.

Said Moyo in a statement: “The Herald’s undisguised smear campaign against Gono is based on quotations from faceless and nameless sources described as “senior Zanu PF officials and “a Zanu PF Politburo member with close ties to the Zimbabwe Defence Forces”.

“One does not need to be a rocket scientist to realise not only that the faceless and nameless sources in the unfortunate story are uncreative inventions but also that it is not possible for Kereke, who is clearly the main source of the scurrilous story, to be at one and the same time rolled into “senior Zanu PF officials” and “a Zanu PF Politburo member with close ties to the Zimbabwe Defence Forces.”

The Herald also claimed that one of the Zanu PF politburo members unimpressed with Gono had close links with the Zimbabwe Defence Forces (ZDF).
This, Moyo said, was “totally unacceptable.”

“The Herald’s opportunistic attempt to bring the Zimbabwe Defence Forces into disrepute through Kereke’s story is not just disappointing but it is also very shocking, unprofessional and totally unacceptable,” he said.
In any case, there was nothing amiss about Gono’s decision to hire Biti, Moyo added.

“It should be understood in the clearest of terms that, like any other Zimbabwean, Gono is entitled under our Constitution to choose his own lawyer,” he said.

“It is trite to mention that lawyers are trained professionals whose appearance in the courts is governed by legal rules and not by politics or similar mumbo jumbo.

“As such, the notion that there are Zanu PF lawyers and MDC lawyers is a sad commentary on our national politics whose polarisation has gone way too far.

“It might be a strategic masterstroke for Gono to have chosen Biti as his lawyer, since the move effectively means that Biti, who is mentioned as a player in the court papers, is now unavailable to Kereke as a potential witness in the Constitutional Court case in question.”
Again, personal links between MDC-T and Zanu PF officials were not new, the minister added.

“In any event, the hullaballoo over Gono’s selection of the secretary-general of MDC as his lawyer pales into insignificance when compared to the fact that there are, many marriages between Zanu PF and MDC members, some of which are quite high-profile,” he said.
“Surely, what is good for the bedroom must also be good for the court-room.”

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(HERALD ZW) Gono, Biti ties stir hornet’s nest
December 18, 2013
GONO BITITakunda Maodza Assistant News Editor

COMMENT - I've never trusted Gideon 'Crazy Eyes' Gono. He was the one at the helm that oversaw the hyperinflation of the Zimbabwe Dollar. He is also against indigenisation, including of the banks. And now he is defending Tendai Biti? You have to wonder why there is such a relationship of trust between them. As Biti's laywer, Gono would be in a perfect position to screw up his defense. And yet Tendai Biti trusts him to represent him? - MrK

Former Reserve Bank of Zimbabwe Governor Dr Gideon Gono has hired MDC-T secretary-general, the lawyer Mr Tendai Biti to fight allegations made by Zanu-PF legislator Dr Munyaradzi Kereke that he was involved in corrupt dealings during his tenure at the apex bank.Zanu-PF Manicaland Province has nominated Dr Gono to fill the vacant Buhera Senate seat, but his cosy relations with senior MDC-T officials is causing unease about where his allegiances lie.

The seat fell vacant following the death of Cde Kumbirai Kangai on August 24.

Mr Biti was Finance Minister from 2009 to earlier this year and worked directly with Dr Gono.

The two were initially sworn enemies, with Mr Biti calling Dr Gono a terrorist who deserved to be shot, but relations have thawed to the point where the MDC-T secretary-general is giving the former RBZ boss legal representation.

Dr Kereke’s graft allegations, involving millions of US dollars, pertain to the time when both Dr Gono and Mr Biti were in Government. Dr Kereke was for a while one of Dr Gono’s most trusted advisors at the RBZ.

Also cited in the court case, which is before the Constitutional Court, is the Zimbabwe Anti-Corruption Commission.

Dr Gono is accused of compromising the independence of the anti-graft body through cash and other inducements, all sourced from Government coffers.

Zanu-PF Manicaland provincial chairman Cde John Mvundura yesterday confirmed they had forwarded Dr Gono’s candidature for the Buhera seat to a “higher office”.

However, there is much unease within the Zanu-PF leadership about Dr Gono’s suitability.

Documents in our possession show Dr Gono hired Mr Tendai Biti on December 16, 2013 and that Mr Biti has already made representations to the Constitutional Court on the ex-RBZ chief’s behalf.

While some Zanu-PF officials say it is Dr Gono’s right to get legal representation from any lawyer, his choice of Mr Biti has made many others nervous about his loyalty to the party.

Last night, Cde Mvundura said: “We have dealt with the Dr Gono issue and forwarded our recommendations to the party hierarchy. It is now up to the leadership.”

The nomination was endorsed by the Zanu-PF Manicaland provincial co-ordination committee which met at Marymount Teachers College on December 7. It is understood that the nomination is now before the Zimbabwe Electoral Commission for confirmation.

A senior Zanu-PF official yesterday told The Herald that they were “disturbed” by Dr Gono’s behaviour.
“Dr Gono on Monday hired Biti to represent him in a fraud case in which he and the Zimbabwe Anti-Corruption Commission will appear before the Constitutional Court. What is disturbing is the fact that this is happening at a time when he (Dr Gono) wants to be Zanu-PF senator for Buhera yet his trust and faith in Biti is so overwhelming,” he said.

Another official said the “party must consider the implications of giving Gono the Buhera seat when he is wining and dining with the enemy”.

“He is determined to undermine the party and its leadership, especially now after his bid to have his term as RBZ Governor extended failed. We ought to be careful with him,” he said.

But party secretary for administration Cde Didymus Mutasa, who is said to be influential in Zanu-PF Manicaland, said there was nothing wrong with Dr Gono’s decision to work with Mr Biti.

“It is his right to look for the best lawyer. If he thinks Biti is the one he wants to pick, it is up to him. Biti practices in Zimbabwe. He practices in Zimbabwean courts and not in South Africa or England. It is up to Gono to choose who he wants to defend him,” Cde Mutasa said.

But a Zanu-PF Politburo member with close ties to the Zimbabwe Defence Forces countered: “We have been told that some people in MDC-T want to besmirch the image of the military and other security servives and they think they can get help from Gono in doing this. We sincerely hope he does not go rogue.”

What is of particular interest is how the Gono-Biti relationship has mellowed. At one point Mr Biti wanted Dr Gono arrested, and today he is helping him avoid jail.

In the early days of the inclusive Government, Mr Biti vigorously on several occasions pestered Sadc to convene an Extraordinary Summit principally to remove Dr Gono and then Attorney-General Mr Johannes Tomana from office.

So bad were their relations that on May 22, 2009 Dr Gono wrote to then Prime Minister Morgan Tsvangirai from MDC-T to intervene.
Read part of the letter: “As you may be aware Hon Prime Minister, the strained relations between the Hon Minister of Finance and myself are a matter of public knowledge and, need I say, concern.

“For more than a year now, the minister has uttered, publicly and privately, words and statements that are not only criminally defamatory but also seriously insulting to my person, family and indeed, to the institution that I work for. His misleading statements are also career limiting in my field of finance and economics.

Dr Gono said Mr Biti “accused me of being at the epicentre of (the) Zanu-PF terror machine, an economic saboteur, terrorist and number one Al-Qaeda who deserves to be shot by a firing squad”.

After a year in the inclusive Government, Mr Biti suddenly went mum about Dr Gono.

In 2012, there were reports that Dr Gono helped Mr Tsvangirai access some US$1,5 million to get an official residence as the Prime Minister. At the same time, it is alleged Mr Biti released another US$1 million from Treasury for the same purpose.

The alleged case of double-dipping from State coffers has never been fully made public with all parties involved denying the allegations.

And last month Mr Biti told a radio station, “Gono has the nation at heart although some people wanted to use him and they indeed used him and just dumped him. We first had challenges, but eventually we had a very good working relationship. He had the nation at heart.”

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(HERALD ZW) Gono, Biti ties stir hornet’s nest

December 18, 2013
Takunda Maodza Assistant News Editor

Former Reserve Bank of Zimbabwe Governor Dr Gideon Gono has hired MDC-T secretary-general, the lawyer Mr Tendai Biti to fight allegations made by Zanu-PF legislator Dr Munyaradzi Kereke that he was involved in corrupt dealings during his tenure at the apex bank.Zanu-PF Manicaland Province has nominated Dr Gono to fill the vacant Buhera Senate seat, but his cosy relations with senior MDC-T officials is causing unease about where his allegiances lie.

The seat fell vacant following the death of Cde Kumbirai Kangai on August 24. Mr Biti was Finance Minister from 2009 to earlier this year and worked directly with Dr Gono.

The two were initially sworn enemies, with Mr Biti calling Dr Gono a terrorist who deserved to be shot, but relations have thawed to the point where the MDC-T secretary-general is giving the former RBZ boss legal representation.

Dr Kereke’s graft allegations, involving millions of US dollars, pertain to the time when both Dr Gono and Mr Biti were in Government. Dr Kereke was for a while one of Dr Gono’s most trusted advisors at the RBZ.

Also cited in the court case, which is before the Constitutional Court, is the Zimbabwe Anti-Corruption Commission.

Dr Gono is accused of compromising the independence of the anti-graft body through cash and other inducements, all sourced from Government coffers.

Zanu-PF Manicaland provincial chairman Cde John Mvundura yesterday confirmed they had forwarded Dr Gono’s candidature for the Buhera seat to a “higher office”.

However, there is much unease within the Zanu-PF leadership about Dr Gono’s suitability.

Documents in our possession show Dr Gono hired Mr Tendai Biti on December 16, 2013 and that Mr Biti has already made representations to the Constitutional Court on the ex-RBZ chief’s behalf.

While some Zanu-PF officials say it is Dr Gono’s right to get legal representation from any lawyer, his choice of Mr Biti has made many others nervous about his loyalty to the party.

Last night, Cde Mvundura said: “We have dealt with the Dr Gono issue and forwarded our recommendations to the party hierarchy. It is now up to the leadership.”

The nomination was endorsed by the Zanu-PF Manicaland provincial co-ordination committee which met at Marymount Teachers College on December 7. It is understood that the nomination is now before the Zimbabwe Electoral Commission for confirmation.

A senior Zanu-PF official yesterday told The Herald that they were “disturbed” by Dr Gono’s behaviour.

“Dr Gono on Monday hired Biti to represent him in a fraud case in which he and the Zimbabwe Anti-Corruption Commission will appear before the Constitutional Court. What is disturbing is the fact that this is happening at a time when he (Dr Gono) wants to be Zanu-PF senator for Buhera yet his trust and faith in Biti is so overwhelming,” he said.

Another official said the “party must consider the implications of giving Gono the Buhera seat when he is wining and dining with the enemy”.

“He is determined to undermine the party and its leadership, especially now after his bid to have his term as RBZ Governor extended failed. We ought to be careful with him,” he said.

But party secretary for administration Cde Didymus Mutasa, who is said to be influential in Zanu-PF Manicaland, said there was nothing wrong with Dr Gono’s decision to work with Mr Biti.

“It is his right to look for the best lawyer. If he thinks Biti is the one he wants to pick, it is up to him. Biti practices in Zimbabwe. He practices in Zimbabwean courts and not in South Africa or England. It is up to Gono to choose who he wants to defend him,” Cde Mutasa said.

But a Zanu-PF Politburo member with close ties to the Zimbabwe Defence Forces countered: “We have been told that some people in MDC-T want to besmirch the image of the military and other security servives and they think they can get help from Gono in doing this. We sincerely hope he does not go rogue.”

What is of particular interest is how the Gono-Biti relationship has mellowed. At one point Mr Biti wanted Dr Gono arrested, and today he is helping him avoid jail.

In the early days of the inclusive Government, Mr Biti vigorously on several occasions pestered Sadc to convene an Extraordinary Summit principally to remove Dr Gono and then Attorney-General Mr Johannes Tomana from office.

So bad were their relations that on May 22, 2009 Dr Gono wrote to then Prime Minister Morgan Tsvangirai from MDC-T to intervene.
Read part of the letter: “As you may be aware Hon Prime Minister, the strained relations between the Hon Minister of Finance and myself are a matter of public knowledge and, need I say, concern.

“For more than a year now, the minister has uttered, publicly and privately, words and statements that are not only criminally defamatory but also seriously insulting to my person, family and indeed, to the institution that I work for. His misleading statements are also career limiting in my field of finance and economics.

Dr Gono said Mr Biti “accused me of being at the epicentre of (the) Zanu-PF terror machine, an economic saboteur, terrorist and number one Al-Qaeda who deserves to be shot by a firing squad”.

After a year in the inclusive Government, Mr Biti suddenly went mum about Dr Gono.

In 2012, there were reports that Dr Gono helped Mr Tsvangirai access some US$1,5 million to get an official residence as the Prime Minister. At the same time, it is alleged Mr Biti released another US$1 million from Treasury for the same purpose.

The alleged case of double-dipping from State coffers has never been fully made public with all parties involved denying the allegations.

And last month Mr Biti told a radio station, “Gono has the nation at heart although some people wanted to use him and they indeed used him and just dumped him. We first had challenges, but eventually we had a very good working relationship. He had the nation at heart.”


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(NEWZIMBABWE) Zanu PF anger as Gono hires MDC-T's Biti

18/12/2013 00:00:00
by Gilbert Nyambabvu

A DECISION by former central bank governor, Gideon Gono, to hire MDC-T’s Tendai Biti for his corruption fight has left a few nickers in a twist among the Zanu PF hierarchy with some top officials questioning his loyalty to the party.

Gono’s former charge at the Reserve Bank of Zimbabwe, Munyaradzi Kekere, who is now an MP, has revived allegations that the ex-governor looted millions of dollars in public funds from the apex bank.

Kereke, last week, filed an application at the Constitutional Court which seeks to force the Zimbabwe Anti-Corruption Commission (ZACC) to investigate the allegations against his former boss.

Among a raft of claims, Kereke alleges that Gono, long considered a confidant and financial adviser of President Robert Mugabe, took more than US$37.5 million, R1,4 million and more than £21,500 pounds in state funds which he converted to his personal use.

According to the Zanu PF-leaning Herald newspaper, Gono has hired former finance minister and MDC-T secretary general, Tendai Biti, to represent him in the case.

Gono, who left the bank in November after being at the helm for ten years, has since been recommended to become Zanu PF’s senator in Manicaland province, replacing the late Kumbirai Kangai.
Senior party officials not named by the paper told the Zanu PF Herald that they were disturbed by Gono’s links with Biti.

“Gono on Monday hired Biti to represent him in a fraud case in which he and the Zimbabwe Anti-Corruption Commission will appear before the Constitutional Court,” said one of the officials.

“What is disturbing is the fact that this is happening at a time when he (Gono) wants to be Zanu PF senator for Buhera yet his trust and faith in Biti is so overwhelming,” he said.

Another top official said Zanu PF “must consider the implications of giving Gono the Buhera seat when he is wining and dining with the enemy”.

“He is determined to undermine the party and its leadership, especially now after his bid to have his term as RBZ Governor extended failed. We ought to be careful with him,” he said.
Equally unimpressed was a politburo member said to have “links to the military”

“We have been told that some people in MDC-T want to besmirch the image of the military and other security servives and they think they can get help from Gono in doing this. We sincerely hope he does not go rogue,” the unnamed official said.

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'Stay away'
By Editor
Wed 18 Dec. 2013, 14:00 CAT

Auxiliary Bishop of Chipata, Benjamin Phiri, preaches that corruption is a sin against God. We agree.

Bishop Phiri wonders why corruption has become a way of life among some people in Zambia and that people who are supposed to serve the public do not do the right thing if they are not bribed. He wonders why such people, such corrupt people, go to church to receive sacraments. Bishop Phiri wonders what such sacraments are for and concludes:

"It is better you just stay away because your works are for Satan and not God. People should do a deeper reflection of their lives and repent truly."

Corruption is harmful to the community and no religious congregation should tolerate it. There is need for the Church to join the fight against corruption just as much as it does against other sins. There is no religious congregation that accepts and tolerates sin. And this being the case, why should corruption, being a sin, be tolerated by our religious congregations?

It is time our churches and their leaders took a strong stand against their corrupt members and joined hands with other social forces to fight corruption.

The enjoyment of our people's right to an adequate standard of living would require a search for viable means to end corruption, bearing in mind that the sources of corruption are both structural and personal.
While it is notoriously difficult to arrive at accurate figures to show the economic damage done by corruption, there can be no doubt that it is a serious problem in Zambia. And it is because of this that the President of our Republic, Michael Sata, the leadership of our religious institutions and other leaders are increasingly voicing out against corruption.

In the private sector, there is widespread tax-evasion and other forms of dishonesty which deprive the state - and thereby the nation - of much needed resources, not to mention those types of corrupt behaviour, harmful business practices, insider training and so on and so forth which disadvantage others in the private sector.

Similarly in the public sector, examples of corruption abound, ranging from nepotism to bribery and downright theft of state property. In other cases, officials fail to follow the correct procedures, resulting in losses of substantial amounts of public funds. And, even though it is not strictly speaking a question of corruption, there is a matter of a civil service which appears, in some areas at least, to be poorly managed and over-staffed. Such a civil service becomes a waste of resources and a drain on the economy, rather than an economic asset.

It is not enough to say that corruption as a moral evil is rooted in the heart of human beings. When corruption is generalised at various social levels, we have to look for the structures that are causing it - the use of privileged offices of authority and public service in order to achieve one's financial ambitions; lack of transparency and accountability at higher levels is an implicit invitation to all citizens to repeat the same lack of transparency and accountability at lower levels; insufficient basic salaries and the continual rise in the cost of living tempt people to employ corrupt means in order for them and their families to survive.

It is good and proper that those who work hard, who develop their abilities and who take on responsibility should be rewarded for their efforts. And it is fitting that incentives should be provided to encourage people to do these things. However, a balance must be achieved in which material values such as wealth, status and power do not become the dominant or sole motivation. If this happens, more important values such as common good and solidarity tend to be neglected or ignored altogether.

There are numerous examples of this in our country today. Much has been said about "eating" for those in power or close to power. This is being justified as being necessary to reward people for their personal sacrifices. This in itself is an indication that the value of service to the nation is perceived as secondary to the material value of wealth, of benefits. The message that seems to be sent is that public life is an opportunity for self-enrichment, rather than an opportunity to serve others.

Materialism in public life stems, in large part, from the overtly materialist nature of the private sector. Here, success is measured largely in terms of a person's wealth or influence, of the number of possessions they have accumulated, of what they earn and own. People are encouraged to aspire to greater material wealth, to 'get ahead' of others, to compete, sometimes ruthlessly, for a bigger share of what is available. There is little sense of duty.

It must also be pointed out that materialism is not confined to the rich. Even the relatively poor can allow materialist values to dominate their lives. Where this happens, whether for rich or for poor, the economy becomes nothing more than an arena of competition, where the most shrewd, the luckiest or the toughest prosper. In the absence of the truly human values, the weak, the ill-equipped or the unlucky fall by the wayside.

Once again, it is a question of balance. It is entirely legitimate to strive to increase one's wealth and to enjoy the fruits of one's labour, but this must happen in harmony with one's social responsibilities. Material values should be accorded their proper place in relation to social, spiritual and moral values. Where this balance is disturbed, as it is in our economy, injustice is the inevitable result.

Even when the trap of materialism is avoided, and human values are recognised and maintained, the temptation of excessive consumption is always present. Each one of us must discern for ourselves what our real needs are, how much of this world's goods we really require in order to live a fulfilling and dignified life? As long as we can meet our needs, we should be content, given that there are almost always others whose needs are not being met. This is not to say, however, that we should reject all comforts, all the pleasures that can be derived from what God has given us on earth; but simply that we must always bear in mind the needs of others, especially where, as in Zambia, millions of our brothers and sisters lack the barest necessities.

Unfortunately, the dominant ethic in our country today appears to be one of consumerism, a preoccupation with acquisition of money and goods even to the point where it becomes impossible actually to use them, and satisfaction is derived merely from having them. This is nothing less than a form of idolatry. It is all the more harmful in that it occurs at the expense of others. Since there is a limited amount of wealth available, the greed of one is directly linked to the deprivation of another. This insatiable appetite for money, wealth, inevitably leads to corruption and other abuses. It is for this reason that those who seek leadership, politically, traditionally, religiously and otherwise, should first free themselves from selfishness, greed and vanity. It is for this reason that corruption should be seen as a sin, an evil that has to be fought politically, traditionally, religiously and

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Govt should revise double taxation treaties - Chigunta

By Kabanda Chulu
Wed 18 Dec. 2013, 14:00 CAT

THE government should go beyond renegotiating mining development agreements to revise double taxation treaties that are used by some foreign investors to avoid tax payments, advises Dr Francis Chigunta.

Chigunta, a Development Studies lecturer at the University of Zambia and former special advisor to Rupiah Banda, said Zambians needed to maximise gains from the country's natural resources. He said many companies were using the double taxation treaties to evade taxes in Zambia.

"Government should also look at the whole agreements which were negotiated under duress, there was much pressure from the IMF and World Bank and price of copper was very low that we had no option and no one knew that prices will suddenly rise. This is why we ended up accepting whatever was given because we had no choice, we were beggars, but now that we are in a strong position, it is time we renegotiated these agreements but we should go beyond and revise double taxation treaties, for example with Ireland and Switzerland," Dr Chigunta said.

"Under these agreements, citizens of either country choose where to declare their profits, you will find companies like Zambia Sugar preferring to declare profits in Ireland where tax is zero rated. This is why Zambia Sugar has legally not been paying a lot to the Zambian Treasury since they can take advantage of that tax loophole and if you look at copper exports or trade, statistics indicate that copper goes to Switzerland because profits are zero rated but copper actually goes to China. These are the agreements we need to do away with, especially that some were signed before independence. But why are we still keeping them; whose existence is to the detriment of the Zambian economy?"

He also advised on the calls for the implementation of windfall tax, saying the reality on the ground was that the country should not implement the tax.

"Indeed Zambians must maximise gains from the country's natural resources, particularly copper which is a national asset, but at the same time, we have to be very careful in the manner that we handle the issue of windfall tax. My view is that we need to be careful in the sense that we should not kill the goose that lay the golden egg," Dr Chigunta said.

"Right now, the mines are going through a period of difficulty, copper prices have been sluggish... They (the mines) have found themselves in this situation of not making a loss or profit and some of these mines are very old, about 80 years and there are those like deep mining at KCM which are facing high operational costs. Therefore, to survive, they resort to borrowing to meet these costs and even if the prices of copper were to rise suddenly, it will still be not possible to make that kind of payment because they have borrowed massively to sustain operations in the hope that prices of copper will rise. So, imposing windfall taxes will create further problems."

When reminded that windfall tax would be triggered at certain price threshold and the mines would not be affected until the price reached the trigger point, Dr Chigunta insisted that the mines would still have to meet obligations from their financiers.

"US$ 7,000 per tonne is currently the price the mines are break-even and they are still borrowing from banks to sustain operations. Even if the price reaches US$ 8,000 or more, they still have to meet those obligations from their financiers so they might need to use that money to pay off debts they have incurred due to a sluggish price of copper. Definitely it will not help, otherwise we might end up squeezing a dead horse which will not be good for the country," he said.

"We have to take into account the Chinese growth model, which is undergoing serious structural changes. China is moving up the value chain and the result is that demand for copper will not be as strong as it has been in the past years. So, we don't see the possibility of copper prices rising to that level, and what makes it worse is that even with other BRICS countries like Brazil, there is sluggish growth as well, so, demand for copper globally will not rise that much."

Dr Chigunta advised that the government should improve tax administration and management by strengthening ZRA to curb loopholes.

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Taxation needs review - Mutati
By Kombe Mataka
Wed 18 Dec. 2013, 14:01 CAT

FELIX Mutati says the country urgently needs a comprehensive review of its tax regime in 2014. Mutati, a former commerce and trade minister in the MMD regime, told journalists yesterday that the review of the tax regime and tax laws was long overdue. He said what the country had been experiencing were piece-meal adjustments.

"What our biggest problem is in taxation in this country is capacity to administer taxation, capacity to ensure compliance for the various forms of taxes and the failure to assess to what extent we can include sectors of people in the tax framework. That is expanding the tax base," Mutati said.

He said if the government was able to build capacity, it would enhance high levels of revenue.

"As a country, we need to get to a place where we put concrete action in terms of how we address overall tax regime which covers the whole economy," Mutati said.

"If we are able to do that, there will actually be no need for us to issue Eurobonds. There is a tax law, for instance, which allows you to deduct these elements as part of your operating costs. Now, if the law says you can charge management fees and recover management fees, it doesn't say how much management fees must be recovered. So, what we need is to address those elements because international companies would obviously impose heavier management and consultant fees on the local operations as a way of getting money out, but our own law allows you to charge those fees against your profits. So, for me, I see the disease is how best we can address the elements that are recoverable for tax purposes. If you go to the income tax Act, it just tells you 'the following elements are allowable deductions for taxing purposes, without defining the perimeters - to what extent you can actually deduct, provided I have got an invoice."

Mutati said that a comprehensive review would also enable the government to identify areas for expanding the tax base.

"For us as Zambians, we shouldn't be focusing on just tax-lines. I think the overall focus must be how much taxation we are extracting from a particular sector as a total and how can we ensure that we take the tax that will still enable that sector or firm to be able to move and go forward?" Mutati said.

"Obviously, the mining sector is a big sector and heavily capital-intensive. If you take the one that we are hearing, Kalumbila mine, they are going to invest somewhere like U$2 billion. You are going to write off that investment over a period of time and, invariably, it will mean that in the early years, because you are going to have a lot of capital allowances that are going to rise, your net profit is literally going to be zero or you are going to be in a net loss situation. So, the dividend for the economy will come somewhere around five to 10 years later.

And Mutati said he was not in support of the re-introduction of the windfall tax.

"There were concrete reasons that made us remove the windfall tax and these reasons were formed by deep analysis, because from the taxation perspective, what we want to achieve is equity and fairness. Number two, the motivation should be induced by a tax framework, particularly, to anchor investment and thirdly to use taxation as a mechanism for growing the economy, not only in one sector, but also in the support sectors," he said.

Mutati said the levels of taxes that the mining companies were paying, the windfall tax and other forms of taxes inclusive, was in excess of 48 per cent compared to the overall taxation of other sectors which had a lower overall level.

"At that rate, obviously it would be choking business. Obviously when the PF got in government, they must have been exposed to the analysis and that is the reason they were unable to re-introduce it."

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Govt declines to process FQM, NUMAW deal

By Darious Kapembwa
Wed 18 Dec. 2013, 14:00 CAT

THE government has declined to process the 2014 collective agreement signed between First Quantum Mining and the National Union of Miners and Allied Workers.

The agreement in question which rival union, the Mineworkers Union of Zambia, refused to sign entailed that NUMAW members were to get a 25 per cent salary increment covering a period of three years. The workers were to get 10 per cent in 2014, eight per cent in 2015 and seven per cent in 2016 which also meant that there was not going to be negotiations for better salaries and improved conditions of service.

NUMAW president James Chansa signed on behalf of his union despite resistance from some of his members while MUZ refused to sign, saying it was a betrayal to the general membership.

According to a letter dated December 13, signed by labour commissioner Cecilia Mulindeti Kamanga, to the two unions and FQMO obtained by The Post, the ministry was unable to process the collective agreement because it was not supported by consensus from representatives of all the workers concerned whose conditions of service were under review.

"The office of the undersigned is in receipt of the 2014 Collective Agreement signed between FQMO and NUMAW for approval by the Minister of Labour and Social Security in accordance with section 70 and 71 of the Industrial and Labour Relations Act Cap 269," read the letter in part.

"In addition, communication has been received from MUZ indicating that they are not party to the 2014 Collective Agreement as also confirmed by the minutes of the signing ceremony held on 3rd December 2013...In this regard, I wish to refer the Collective Agreement back to the Joint Industrial Council for the employee representatives to have a collective position on the offer from management," read the letter.

Reacting to the development, MUZ general secretary Joseph Chewe said it was pleasing that the government was not compromised when it came to defending workers' rights.

"We thank the government, unlike the previous government where some ministers and some union leaders were compromised by multilateral corporations. But we wish to call upon law enforcement agencies to extend the fight against corruption to unions, so that people live within their means and represent our members without being compromised," said Chewe.

Chansa was unavailable for comment by press time.

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