Monday, February 26, 2018

(THE MAST ZM) Haabazoka calls for repossession of mines

COMMENT - On a small note of disagreement, I don't agree with prof. Haabazoka about economic targets if that means 5 year plans, and I don't think PAYE is a great idea, however those are just two prescriptions that I think there are more modern variations to. It is unacceptable that the mines, for instance through the illegal practice of transfer pricing, declare a loss year in and year out, or that dividends are not paid to ZCCM-IH, which today is a holding company with a very conflicted board of directors. They also neglect to collect dividends from the mines. I completely agree that the mines should be state owned. And there should be cheap credit for small businesses, farmers, consumers - official lending rates are prohibitive and have been for decades.

1. CopperCoin

How about a local crypto currency backed by copper?

https://www.themastonline.com/2018/02/23/iran-russia-consider-own-cryptocurrencies-after-venezuela-success/

2. Drought proofing farmland

Which can probably be promoted under the banner of combating the effects of climate change. The army probably has enough equipment to train recruits, a skill that can carry over into civilian life. And prevent the yearly flooding by storing water in the soil.

https://www.harvestingrainwater.com/2016/11/27/brad-lancaster-with-warren-brush-co-water-for-every-farm-earthworks-for-resiliency-in-an-era-of-drought-april-5-8-2017-hyder-az/

Brad Lancaster learned a lot from the Zimbabwean dry land water pioneer Mr. Zepheniah Phiri Maseko.
https://permaculturenews.org/2016/07/28/evolutions-mr-phiris-water-harvesting-plantation-1995-2016/

There are a lot of things that can be done in agriculture, manufacturing and education.

3. Manufacturing from locally grown agricultural products

How to make a HQ handmade Cigar
https://www.youtube.com/watch?v=ohVnoo2DC0g
Notice the prices
https://www.jrcigars.com/

Turning maize surpluses into storeable and exportable distillates, which would also help create a permanent market for maize surpluses for local farmers:

How to
http://www.whiskeyprof.com/basic-distilling/
Bourbon sells for $4,000 to $15,000 per barrel
https://www.forbes.com/sites/johnmccarthy12/2017/04/04/how-to-buy-a-barrel-of-bourbon/2/#7f985b681bfb

4. Horticulture

There are crops that can be grown besides maize and that have a very high return or are labour intensive.
https://modernfarmer.com/2017/07/5-valuable-crops-can-grow-us-grow/

If a market for small to medium sized farms is created, there has to be technology developed to meet their needs, rather than technology for giant corporations. The universities can be of help here. For example:

Quick Cut Greens Harvester (Official)
Farmer’s Friend
https://www.youtube.com/watch?v=OPIfw5_WoLU

5. Redistribute land

" The Northern Rhodesia (Native Trust Land) Orders-in-Council of 1947 created Trust Land as a result of pressure from the white settlers who demanded security on the land they occupied. Trust Land constituted about 58%. This was actually an extension of crown or state land to 64% while the reserve land for the local people was reduced to 36%. "
http://maravi.blogspot.com/2017/12/land-reform-in-zambia.html

6. Universal Basic Income

This is how you really stimulate the economy:
https://twitter.com/MrK00001/status/827872456035663872

There has to be a serious discussion about the end of 'jobs' which is universal, including in mining, a relentles tide caused by automation and innovation. People still need incomes, even without jobs. There has to be a concerted effort to eliminate poverty.

7. Democracy

The government has to do what the people want it to do. No more capture by the IMF, or corporations. Major decisions have to be put to a referendum - taking on debt, negotiating trade deals, going to war, etc. This is the only way to prevent rogue governments. It should be illegal for NGO's to take money from for instance Freedom House or the Open Society Foundations.

- MrK

Haabazoka calls for repossession of mines
By Chambwa Moonga on February 21, 2018

ECONOMIST Lubinda Haabazoka says Zambia’s mines ought to be under government ownership because the current model of private ownership is a failure.

And Dr Haabazoka, who is a University of Zambia (UNZA) lecturer, has noted that the current trend where Zambians are being over-taxed by authorities will not culminate into development for the country.

Speaking on The Assignment programme on Muvi TV on Sunday night, Dr Haabazoka inferred that mines under the current ownership model were not substantively contributing to Zambia’s economy.

“What we need to do [is that] the current model of mines being under private ownership is a failure. I don’t know how much taxes the mines are paying but when you look at ZCCM (Zambia Consolidated Copper Mines) in 1991, it made net profits of US$191 million. When you look at the mines from 1998 to today, all the taxes put together that they have paid are less than US$191 million! They (mine owners) are always saying ‘we are making losses’. So, they have failed. We need to get the mines under ZCCM again,”

Dr Haabazoka noted.

“Foreign investors can come and build malls, they can come and build factories – build motor vehicle manufacturing plants, we are not against that. But they should not run the mines! The mines should be under government. I’m a capitalist but also I’m for a mixed economy and I borrow from Russia… Look at our mines! Cobalt, I think, is selling over $40,000 per tonne. But where is that money going to? You cannot be running a shop for 15 years and continue making losses.”

He recalled that under ZCCM ownership, mines did more in terms of corporate social responsibility.

“When my father was a mine captain…my father just went up to equivalent of Grade seven. Our grandfathers and fathers took over the mines when the former president Kaunda was in charge. We didn’t have educated people but ZCCM built schools, roads, clinics and all the infrastructure that was on the Copperbelt,” Dr Haabazoka said. 
“FDI (Foreign Direct Investment) for Zambia, for example, contributes huge amounts of foreign exchange inflows but unfortunately there are very few countries that have developed using FDIs. A foreigner cannot come and develop your country – they can bring in new technologies.”

And Dr Haabazoka pointed out that Zambia seemed not to know where it was going.

“You need to have targets which you need to reach and those targets are beyond single digit inflation, stable exchange rate. Those [targets] are basically that of revolutionalising the way you do things; major success stories of economic development, the South Korean example, the Japanese example, Singapore, even the Rwandan experience – those are things that basically you can see going on where everyone in the nation has put their hands together and are moving the country forward,” he said.

“At the moment, we don’t know what we want to achieve; do we want just to merely stabilise macro-economic indicators? Do we want to continue accumulating debt? Are we infrastructural wise? Where is our youth policy? Where are we going? What is happening to our manufacturing industry? What of our mineral wealth? How is economic development happening?”

Haabazoka added that from independence, Zambia’s government knew that it wanted massive investments and that it created its own manufacturing industry as well as enhancing infrastructural development.

“[But] from 1991 we lost it until 2001 when we stabilised the damage that was caused…by the huge debt that we had. Mwanawasa’s period was much more of a stabilising period, trying to get rid of the debt. In my opinion, now we should have that economic development that is aimed at trying to reduce…. We have gone back; from stabilising and reducing our debt to US$600 million, we started accumulating it after 2011 and now we are in massive debt. Now, we are supposed to start doing what we were doing from 2001 – stabilise issues so that in the future we start growing,” Dr Haabazoka said.

“As a country, we are hugely divided; the country basically is divided into red and green – tribal divisions! Everything that happens in the country people see it through political lenses, through surnames of individuals – there is a lot of disunity. People might disagree with me but basically that is what is obtaining.”

He also regretted that Zambians only spoke of economic diversification when copper prices were below $4,000 per tonne.

“When you look at economic diversification per se, you need both government and citizens to actively participate in it. First of all, you have to say what it is that we are dependent on. You are going to choose the mining industry. [But] can we use the mining industry to diversify our economy? Yes, we can!” Dr Haabazoka said.

He also observed that Zambians had fallen in love with money.
“I don’t know where that has come from. When you call a Zambian to come and do something, they are going to charge…. Some people even charge $500 per hour just to come and help solve the drainage…,” Dr Haabazoka observed.

Meanwhile, Dr Haabazoka noted that what was currently obtaining in the country’s economy could not propel Zambia to development.

“We cannot develop an economy on high taxes. There is no country in the world that has taxed its way into development. The current regime can change things, there is still time. They can actually do it within one or two years. But they have to do the following;
give a breather to citizens. There is no way you can be charging toll fees at K20 per motor vehicle. In a K20, a person on the street can buy pamela (rationed mealie-meal pack), eggs and make lunch for their family. Give a breather [because] there is no way you can tax your way into development,”
said Dr Haabazoka.

“The current Minister of Finance should bring back the Pay As You Earn to 35 per cent. Actually, 28 per cent is the best rate or most optimal tax for the current situation. You are going to see increased economy growth in the future. Those days if on a Saturday you went into a hardware shop, it will be packed. But nowadays you are just a few of you and it’s not because people don’t want to build; there is no disposable income [and] this is not politics. I’m just saying what is on the ground!”

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