Indrawati advises government to explain economic policies
By Chiwoyu Sinyangwe
Tue 27 Mar. 2012, 13:00 CAT
ZAMBIA'S internal preparations via clear and consistently explaining of domestic economic policies will be most important in getting best pricing for upcoming US$700 million bond, says World Bank managing director Mulyani Indrawati.
And Indrawati said the country needs to start watching the flagging global economy as it is expected to depress international price of copper - the country's economic lifeblood.
[Unless hyperinflation takes hold because of the hundreds of trillions of dollars in toxic assets, and the only thing worth anything will be real commodities like copper and food. She doesn't quite explain why the debt ridden global economy is flagging. - MrK]
With a few months to go before Zambia issues the US$700 million Eurobond, global ratings agency Fitch earlier this month downgraded Zambia's outlook to negative from stable, on account of its increasing concerns about the government's economic direction.
Indrawati said the most important decision to get the best market conditions for the bond was to do thorough internal preparations.
"It is not about the timing, about whether the market environment is good, but most importantly the preparations are from the internal side," Indrawati said in an interview.
Indrawati, who was in the country for two days last week, said bond buyers were focused not only on the current budget.
She said the government should explain the country's future economic direction and assure investors the money to be raised from the bond would be invested in sectors of the economy that would give security the country will be able to pay back the debt in future.
"And that the management of the economy is gonna be sound and good, and that your budget will stay in the sound footing, that the trend of your debt is gonna be stable, of even declining, your macro policy - fiscal and monetary policy working in a more coherent way or will need to be explained and put in your prospectus as well as the economic and budget governance needs to be strengthened," she said.
"In that case, when the government issues the bond, it will get the best price. That means they will get the interest rate which is reasonable."
And Indrawati warned that failure to expedite diversifying the country from mono-dependence (on copper) risked making the country vulnerable to external shocks as the outlook for the global economy continues to weaken.
"The last 10 years, the growth mainly boosted by commodity price and the commodity price was also driven by the global economy which is growing very strong that make the demand for commodity to be increasing, and that makes the price of copper and other commodities very high," said Indrawati.
"That may be is not going to continue because global economy is a little bit weakening with this crisis, and that is why watching on this commodity price is going to be very important for the government but at the same time focus need to be given for this area which is directly affecting the areas of the people."
Last week copper prices fell to a two-week low on Thursday, hit by concerns about the health of the global economy and by a softened demand outlook after manufacturing data showed a drop in new orders in both the euro zone and China.
London Metal Exchange (LME) three-month copper eked out a $25 gain to close at US $8,455 a tonne.
Labels: NEOLIBERALISM, SRI MULYANI INDRAWATI, World Bank
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World Bank to hand over names of Zambian officials who received bribes over ZESCO deal in 2002
TIME PUBLISHED - Tuesday, March 27, 2012, 6:31 am
The world bank has said that it will soon
hand over to the Zambian government details and names of senior government officials in the previous MMD government who received a bribe from Alstom Corporation of France.The World Bank slapped a hefty 9.5 million dollars fine on the Alstom Corporation, a major French engineering company and blacklisted two of its subsidiaries, Alstom Hydro France and Alstom Network Schweiz AG (Switzerland), after it admitted to bribing a Senior Zambian government official.
Alstom admitted to an “improper payment” of 110 thousand euros to the official for “consultancy services” when the company submitted a bid to ZESCO to perform bank-funded rehabilitation work on hydropower systems at Victoria falls in Livingstone.
Alstom’s subsidiaries have been banned from the Bank’s call for tenders for a period of 3 years, and committed themselves to pay US$9.5 million to the institution.
The bribe was paid in 2002, just two years after France outlawed the payment of bribes to officials in foreign countries. ZESCO signed a 45-million dollar contract with Alstom Hydro France in April 2002.
The Tender was issued in 1999 and the project was completed in July 2008 at a cost of 51-million dollars. The world Bank declined to name the official who allegedly received the bribe, saying that disclosure could “jeopardise the security of witnesses”.
But during an interview with selected Zambian business journalists, World Bank Managing Director Sri Mulyani Indrawatti said the referral will be sent to the Zambian government explaining how the corruption happened and the people involved.
Ms. Indrawatti said that it will then be up to the Zambian Authorities to act against the official.
And SHERPA, a Paris-based, non-profit organization that aims to protect and defend the victims of economic crimes in developing countries, has welcomed the decision by the World Bank but called for the damage caused to Zambia by this corrupt deal to be fully compensated.
SHERPA further said that there was no reason for not including restitution payments in the case of Alstom in Zambia.
Labels: CORRUPTION, MMD, SRI MULYANI INDRAWATI, World Bank, ZESCO
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Zambia needs to move from dependecy on copper - World Bank
By Gift Chanda
Mon 26 Mar. 2012, 12:00 CAT
THE World Bank says Zambia urgently needs to diversify its economy and end dependence on copper for it to attain the Vision 2030.
Visiting World Bank managing director Sri Mulyani Indrawati observed that the Zambian economy is over-dependent on a few commodities and few activities, a situation she said made the economy very vulnerable.
She said the economy would need to be "rebuilt and diversified" for the country to achieve the goals and objectives under the country's Vision 2030.
Indrawati said this when she launched the One-Stop Shop and Business E-registry in Lusaka on Thursday.
The E-registry simplifies and shortens the registration process by enabling firms to proceed with all licensing steps at a single location.
"Having this one-stop service is a very strategic first stop for Zambia because it will easy and provide all the necessary information for the business community and the private sector initiative to get all the necessary information and most important finish all the registration under one place in an easy process," Indrawati said.
She said the initiative would make Zambia improve in terms of the way it does business in the region.
Indrawati said reform processes had put Zambia in the top position compared to other sub-Saharan African countries when it comes to the ease of doing business.
"Zambia is now ranked seventh in Sub-Saharan Africa when it comes to the overall ease of doing business. But that is not adequate," Indrawati said.
"Simplifying procedure and ensuring that you ease doing business here is actually the first step for the private sector to prosper as well as create jobs in this country."
She said the government would need to review all policies that have been hampering economic diversification and employment creation.
Indrawati also called for capacity creation in institutions relevant to the country's economic growth.
She said the World Bank stood ready to assist Zambia in its economic diversification quest.
"We are pleased to be Zambia's partner in working towards a sustainable model of growth which relies not only on the exploration of natural resources, but also on the development of the country's private sector," said Indrawati.
In sub-Saharan Africa, entrepreneurs often find it expensive and slow to both open and maintain a business, hampering their ability to expand their enterprise and create jobs.
Zambia's Private Sector Development Reform Programme (PSDRP) has been accelerating regulatory reforms in a number of key sectors with an aim of reducing the cost of doing business in the country.
It has already expanded the one-stop shop in Livingstone and plans to open similar offices in other parts of the country.
Commerce minister Robert Sichinga said the government would create one-stop shops in all provinces.
"The one-stop shop and e-registration are two concrete steps we are taking to empower business in Zambia," said Sichinga.
"We are committed to an all-encompassing programme of business reform which will have a lasting impact on the private sector."
Labels: COPPER, ECONOMIC DIVERSIFICATION, ROBERT SICHINGA, SRI MULYANI INDRAWATI, World Bank
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Corruption is morally, legally and politically indefensible
By The Post
Sat 24 Mar. 2012, 13:00 CAT
MORE is expected of Michael Sata and his government in the fight against corruption. And as World Bank managing director Sri Mulyani Indrawati has observed, the people of Zambia will have every right to demand more from Michael and his government because they were elected by the people on the platform of cleaning up the country and improve the performance by addressing the issue of corruption.
[They were also elected to turn away from the neoliberal economics the World Bank has been forcing on Zambia and the world, and is destroying the global economy as we speak. - MrK]
The performance of Michael and his government will be evaluated against the record of what they have or have not achieved in the fight against corruption. Did they fulfil their promise in the fight against corruption? But to deliver on this promise, Michael and his government will require to put in place good legislation, good law enforcement officers, and a good judicial system.
And right now, capacity is seriously lacking in our law enforcement agencies. There is need for more resources to be channelled to the operations and training of those involved in investigating and prosecuting corruption.
On the legislative front, Michael and his government seem to be moving in the right direction and taking the right initiatives. Their decision to reinstate the abuse of office offence in our Anti Corruption Commission Act is a commendable initiative that will go a long way in increasing public confidence in their seriousness to fight corruption even among their own ranks.
It is easy for them to fight the corruption of the former regime. But it will not be that easy to fight corruption among themselves, among their own colleagues. And this is where the greatest test in their commitment to fighting corruption lies.
The importance to the fight against corruption of coming up with good legislation doesn't need much disquisition. As we have stated before, we cannot call others to virtues, to principles, to standards which we ourselves do not make an effort to adhere to or practice.
Coupled with good law enforcement and a good Judiciary, the abuse of office offence can go a long way in deterring corruption among public officers. But there is need also to pay special attention to those outside government or state offices who induce public officers to abuse their offices.
Corruption has to be fought not only in public institutions but also among private institutions because these are the ones who in the final analysis make it possible for public funds to be stolen, to be abused. There is need to strengthen the law and make it easier for law enforcement officers to be able to demand accountability from every citizen.
We all need to account for our wealth, for the money we have and accordingly pay taxes on it. There is nothing wrong in law enforcement officers demanding to know how one has acquired the wealth one has. We say this because unearned income, unexplained wealth is a prima-facie case of corruption.
And where there is suspicion of corruption, of a crime having been committed, law enforcement officers need to investigate and establish the truth. And the onus to prove otherwise should be on the individual who is being pursued or accused. This will not be strange to us as a nation because it is a practice that is followed throughout the civilised world.
And this is how most of these countries have managed to curb corruption. This is not a violation of any one's rights, it is not an unjustified intrusion. But of course with poor law enforcement agencies, such laws can be abused by those in power to harass, victimise and humiliate political opponents.
We therefore need law enforcement agencies that are not open to political manipulation and direction. We also need an efficient and incorruptible Judiciary. Our Judiciary, in its current form, has shown serious deficiencies, defects, weaknesses.
It is a Judiciary that has been much more open to abuse by the political authorities in collusion with those who manage it. We have seen how our Judiciary was abused and corrupted to let Frederick Chiluba go scot-free by Rupiah Banda and his agents in the Judiciary.
The Zambian people, as a result of corruption in our Judiciary, failed to recover what Chiluba and his tandem of thieves had stolen from them because the Judiciary was influenced to reject the registration of the London High Court judgment.
This was a judgment in a case that had been commenced in London by the Zambian government of Levy Mwanawasa to help them recover what Chiluba and friends had stolen from the Zambian people. The Zambian people won the case in London but for them to recover what Chiluba had stolen, that judgment needed to be registered in the High Court of Zambia.
But Levy's successor, Rupiah, was not for that idea and ensured that Chiluba kept his loot by not having the judgment registered. This is what happens to the fight against corruption if the judicial process is corrupted.
It is clear that a lot of work is needed if the fight against corruption is to register some successes. Our rotten Judiciary has to be corrected. Our law enforcement agencies have to be strengthened in all ways, including in terms of the integrity of their officers.
This calls for better organisation and remuneration of officers. A generalised system of accountability where the wealth of every citizen is open to scrutiny may act as a good deterrent against corruption among our judicial officers, unlike today's case where some of our judges have accumulated so much wealth which does not tie up with their earned income.
Where did this wealth come from? This also applies to our politicians. Corruption should be made a difficult and costly undertaking. It should also be made easy for law enforcement officers to investigate and trace proceeds of corruption.
Clearly, fighting corruption cannot be reduced to political rhetoric or promises. Action is needed on all fronts. There is need for increased public awareness on this issue because corruption is a very dangerous obstacle to the realisation of our development goals.
And why should we tolerate something that is so morally, legally, politically and economically wrong, unacceptable and indefensible? There is no one in the world who has ever said corruption is good.
Even the most corrupt elements have spoken against corruption. This means there must be something seriously bad about corruption and as such it should not be tolerated in any way and in any form. It is probably for this reason that Michael and the PF picked it as an election campaign issue which helped them win last September's elections.
But matters should not end there. Future support for Michael and the PF must be tied to their performance on this greatest promise of theirs. If they fail to deliver on this score, public support for them should be immediately withdrawn.
Labels: CORRUPTION, SRI MULYANI INDRAWATI, World Bank
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World Bank urges effective use of structures in corruption fight
By Mutale Kapekele
Tue 16 Nov. 2010, 04:01 CAT
WORLD Bank has challenged governments to effectively use institutions that have been created to fight corruption. In its 2010 Integrity annual report presented by the managing director Sri Mulyani Indrawati, the World Bank reported that corruption cases involving its projects in Africa had increased.
Responding to a press query on the matter, Indrawati observed that countries already had proper institutions to fight corruption and should now put them to good use.
“From my perspective, we the international community, national authorities, the private sector, civil society - have worked hard to put the tools in place, to build the structures for an effective anti-corruption regime,” Indrawati stated.
“We now have to put those structures to use. Here I see two challenges. First, enforcement. When the public, citizens think about whether progress is being made in fighting corruption, they do not immediately think of transparency.
They look at whether there are successful prosecutions of the officials, individuals and corporations that they think may have been involved in corrupt practices and whether commercial banks and other institutions that may have given safe haven to the proceeds of corruption assist in retrieving the stolen funds.
This is, I would argue, the area where we have the greatest challenge, where progress will have the greatest impact on public opinion, where we will begin to restore trust.”
She stated that despite the World Bank not being a law enforcement agency or prosecutor, it was still committed to the corruption fight.
“We do not bring cases to court, and we do not prosecute officials or companies.
Still, we are committed to the anti-corruption agenda and we would like to see much faster progress and more concrete results,” she stated.
“The World Bank’s integrity vice-presidency is dedicated to working with our partner governments to root out corruption in World Bank financed projects.
We have made significant progress with debarments increasing to 58 over the past two years, from nine sanctions the previous two years. And we’ve also had successes in several high-profile cases.”
She stated that the remaining challenge was to follow through at the national level for the cases that had been reported to enforcement agencies.
“The remaining challenge, and I know you would agree with me on this, is to see more follow-up from national authorities,” Indrawati stated, “and I don’t just mean in developing countries, we have seen rich countries drop investigations as well, or perhaps not follow up on them as effectively as they should or could. Corruption was not invented by the poor.”
She disclosed that in the fiscal year to June 2010, 32 referrals to governments and anticorruption agencies were sent “so that they could undertake corrective action and their own criminal investigations to determine if the laws of the country have been violated”.
She stated that follow-up investigations took time and did not always lead to prosecutions but that the bank would like to see action and expected to see a steady increase in the number of convictions over time.
Indrawati also encouraged the private sector to take a keen interest in fighting corruption and ensure transparency in all their dealings.
“From the point of view of businesses, combating corruption is about leveling the playing field, seeing fair competition and, above all, about managing costs specifically, individual costs and company level costs,” she stated.
“Every bribe taken is a bribe paid, and more often than not, it is a company official delivering the envelope.
And while corruption may benefit individual companies in the short run, over time it becomes a real barrier to development, innovation and business growth.
Because sometimes the corruption is in the form of counterfeit drugs, so people don’t get better, or they die.
Sometimes corruption is a building that collapses in the face of a natural disaster, because the quality inspector took a payment from the construction contractor to falsify an inspection. Corruption can kill.”
She stated that it was unfortunate that many anti-corruption initiatives lacked the “teeth” of enforcement.
Indrawati stated that embracing the governance and anti-corruption agenda posed some difficult trade-offs to the World Bank Group as much of its work was in the poorest countries, “where institutions are often weak and the likelihood of something going wrong is high”.
Labels: CORRUPTION, SRI MULYANI INDRAWATI, World Bank
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