Maravi

Govt lacks clear economic policy

Govt lacks clear economic policy
Written by PC Mulenga
Monday, February 23, 2009 5:11:40 AM

Our government does not appear to have a clear economic policy. On one hand they are happy to see locally-owned companies such as Zambian Airways go under with hundreds of jobs lost, while at the same time they are rushing to sell off one of the few remaining parastatal companies to foreign investors, all in the name of a free-market economy.

It is inconceivable that a responsible government would sell Zamtel, a company of strategic importance, and a major employer at that, in the midst of a global financial crisis that has already claimed 8,000 jobs in the local privately-owned mines and tourism companies.

Is the government telling us that the prospective buyer will maintain the existing labour force or create new jobs? Will the investor immediately write off the massive debt owed by the government, which is the main reason for Zamtel’s liquidity problems? How will the sale of Zamtel help the Zambian economy to survive the global financial crisis?

Under the circumstances, selling Zamtel is not a national priority and would in fact constitute a national disaster as the country will no longer be in control of its communications network. The only beneficiaries of such a deal will be the people directly involved in the evaluation and sale of the company, and the buyer, who is probably already waiting in the wings, going by what has been recently exposed.

The telecommunications sector in Zambia is already liberalised and the major cellular and internet providers are private companies; therefore potential investors are free to come and invest in Greenfield operations. Let us not get into a situation where the new owner will immediately lay off the entire workforce and sell off the company’s key assets, such as Mwembeshi Earth Station and the optical fibre network, as soon as they are in control, blaming the global financial crisis. It has happened before in other former parastatals, including the mines.

Our leaders must stop playing games and come up with genuine policies that are in the national interest, because the free-market policies they are loudly proclaiming have been discredited even in the West, whose governments are now nationalising banks and pumping money into private companies. The two million dollars that is supposed to be paid to RP Capital can go a long way towards sustaining Zamtel’s operations until the global financial crisis has passed.

Labels: FDI, NEOLIBERALISM, ZAMTEL

posted by MrK @ 5:12 AM