Friday, November 28, 2008

Prof Saasa urges govt to tackle mining job losses

COMMENT - " a consequence of over-dependence on copper " this is not a consequence of an overdependence on copper. This is a consequence of the probably corrupt unwillingness of the president and finance minister to benefit from the boom in copper prices. It was their responsibility to collect as much taxes as they could from the country's one major economic sector, and they neglected doing so, to the massive benefit for foreign mining companies, reducing the people of Zambia to beggars, living on the world's biggest deposits of natural resources. They should not only resign in shame, but there should be criminal prosecutions in the works. The MMD leadership has deprived Zambia from at least $10 billion in hard cash. Sometimes policy is not just incompetent, sometimes it is criminal.

Prof Saasa urges govt to tackle mining job losses
Written by Fridah Zinyama and Lambwe Kachali
Friday, November 28, 2008 10:27:41 AM

Professor Oliver Saasa yesterday said the government is sleeping by not doing enough to deal with the crisis of job losses being experienced in the mining sector.

And University of Zambia (UNZA) Development Studies lecturer Tiyaonse Kabwe said the mining sector’s decision to lay off employees due to increasing costs of production and the slump in copper prices is the only rational decision to make.

Another UNZA Development Studies lecturer Dr Fred Mutesa said what Zambia is currently experiencing is as a consequence of over-dependence on copper which is always subject to fluctuations on the international market.

Prof Saasa, an economic consultant, urged the government to put in place proper response mechanisms to deal with the economic and social effects of job losses that arose from the global financial crisis.

He, however, said this was not the time to politicise the job losses in the mining sector as doing that would affect every Zambian.

Prof Saasa said what was needed was to deal with the problem in a rational manner.

“At the moment Zambia is not in any position to protect itself from the effects of the global financial crisis which has resulted in a drop in copper prices and the inevitable job losses,” he said. “Zambia is currently fully integrated into the global system as most of its foreign direct investments come from the developed world which is also grappling with the financial crisis.”

Prof Saasa said quick action from the government was important if the problems in the mining sector were to be resolved.

“At the moment government seems to be sleeping and is not doing enough to deal with the crisis being experienced,” he said.

Prof Saasa said it was not right for the mining companies to retrench employees as the effects of that would be devastating.

“Zambia’s poverty levels are still quite high and the job losses are likely to worsen the situation,” he said. “This therefore calls for a bit of moderation from the mining companies in the decisions they are currently making.”

Prof Saasa said it was important to look at the issue in a holistic manner, saying, the reasons being advanced by the mining companies were quite valid.

“This is the time for government to quickly meet with the mining companies to see ways in which the problems that they are going through are quickly addressed,” he said.

And Kabwe, who is currently working as a visiting lecturer at the University of Helsinki in Finland, said in a situation of rising costs and diminishing profits, any company could certainly not maintain the same wage bill when usual profits were no longer there to support the usual expenditure.

“Though we have to consider the effects of laying off many employees, we have to consider that investors have put considerable amounts of money in particular projects and continuing with business as usual would not protect their investments,” he said.

Kabwe said though laying off employees was a painful and unpopular decision to make, when running a business in difficult times, that was the only decision that could be made in order to protect people’s investments in respective companies.

“Though clearly stating that laying off people might seem heartless, it is important that government ensures that Zambians benefit from their natural resources,” he said. “Government must ensure that they put policies in place that enable the majority of Zambians to benefit from what mother nature blessed them with.”

Kabwe also advised the government to ensure that it did not completely leave the mining sector in the hands of private investors.

“Foreign Direct Investment might work for a while but there is need for government to ensure that the country’s economy is not entirely left in the hands of outsiders who might quickly act on behalf of shareholders and the local citizenry,” he said.

Kabwe observed that if governments in developed countries did not hesitate to help ailing financial companies, Zambia should follow suit.

“If in the bastion of Capitalist States are being asked to take over failed financial intuitions, why should we in the periphery keep on holding on to failed economic policies of senseless whole sale economic Liberalisation?” he asked.

Meanwhile, Dr Mutesa urged the government to ensure that overdependence on copper was seriously reduced.

“To avoid any further economic devastation, it is important to diversify the economy and consider value addition of our copper,” he said.

Dr Mutesa observed that at the moment, Zambia did not have any laws that would stop an employer from retrenching workers.

“But everything is negotiable, so the Mine Workers Union (MUZ) should ensure that they meet with management to discuss their benefits,” said Dr Mutesa. “No employee should be laid off without a retrenchment package.”

And labour minister Austin Liato said Zambia was not the only country where labour was being laid off due to the world financial crisis. Liato said unless stakeholders understood the problems behind the laying off of workers in the mining companies, a solution would not be found.

He said the government’s position was to dialogue with all parties involved in an effort to bring the problem to an end.

“The way forward between employers, employees and government is to dialogue, to discuss. We are social partners. So as government, we want to involve everybody in this spirit of dialogue so that we share all the problems,” Liato said.

He said there was no reason for stakeholders to be pointing fingers at each other but should instead come together and find a lasting solution to the problem.

Liato said necessary steps were being taken by the government to dialogue with mining companies and see if the decision of laying off workers could be reversed.

“This is not time for finger-pointing; this is time for real solutions. It requires real men and women to sit down, table and find out what the real problem is from each part. The problems affecting Zambia are not isolated. Our country is doing everything to put the economy back on track. From my point of view, as Minister of Labour, I am going to do my part to ensure that at least a spirit of dialogue and social dialogue is fostered,” said Liato.

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