Friday, November 26, 2010

Southern Africa: Waking Up to the Ownership Ethic

Southern Africa: Waking up to the ownership ethic

Courtesy of the Zimbabwe Herald

LADIES and Gentlemen, all protocols observed!

I have just gone through Minister Biti’s budget "statement". I am immediately struck by the term "statement" when set against the 252-paged tome the Honourable Minister gave us yesterday. I immediately remembered his brotherly advice to me only a few moons back: keep it short and less verbose.

Well taken, Honourable Minister and hey, let’s be jolly buddies in our quest for brevity and simplicity, you and me. It’s an arduous task to catch both, is it not Tendai? I felt pity for ZBC/TV. How do you capsulize a two-and-half hour presentation, much of it loose and unconnected?

Cabral in vain

I read through the statement, not once, not twice, but three times. I will reveal to the Honourable Minister what it is that sustained my interest. It was the prefatory quote from Amilcar Cabral, and for the benefit of those who might not have seen the budget "statement", the quote read: "Always bear in mind that people are not fighting for ideas, for the things in anyone’s head.

They are fighting to win material benefits, to live better and in peace, to see their lives go forward, to guarantee the future of their children." The gentle reader may recall that Minister Biti and I have had a robust argument where African revolutionary scholars like Cabral, Nabudere and Fanon have been summoned from their graves, if only to mediate and broker peace and harmony lost between us.

That is the background and the sight of a Cabral quote immediately excited my curiosity. Apart from the sheer cogency of the thought in the quote, I was curious to see how this political homily if not edict, would relate to what Minister Biti, obviously strictured by both means and protocol, related to the Finance Minister’s presentation.

I am aware of another important injunction from one of these philosopher-fighters, prescriptively asserting that radical parties must govern as liberation movements in power if they are to remain true to the African cause. Was the minister about to take forward this major precept of African politics, I wondered, voraciously seeking to discover it all through an intimate reading of his statement. Would he deign take that Mugabe path, and still retain the respect of America and Britain? Would he?

Biti’s cactus land

I ploughed through verbose paragraphs, giant figures and ornate graphs, all to see where Cabral stood validated, all to see where "people" would cull "material benefits" to live better and in peace, to see "their lives go forward", indeed to make and guarantee a future for their children. I read. I re-read. I re-re-read.

Minister, I am sorry I miss Cabral. I miss his re-incarnate, whether in you or in your document, itself an erudite chastisement of the revolutionary by a young elder, standing akimbo atop the anthill of the Washington Consensus. I read again, re-read again and again and sorry, I discovered, to great dismay, that beneath the surplice of Amilcar Cabral lay the cassock and holy heart of Archbishop Adam Smith, with his dutiful acolyte called Friedman.

Not John Maynard Keynes and his gospel of state interventionism by way of nudging the whole market towards desired full employment and other social goals. I have since concluded that in Minister Biti’s 2010 budget, Africa’s revolutionary pontiff called Cabral gets toppled, while Adam Smith — capitalist Europe’s own high priest — stands tall and erect, well firmly in place, well ensconced in the saddle of the Inclusive Government.

Murambiwa or George Soros?

In our case there are core issues you inevitably deal with when debating our people and their quest for material benefits and secure futures for their children: has the land come and is it secured as a productive asset; who owns and controls the economy and what room is there for the indigenous people; who runs decisions and how do these impact on the welfare of the people; above all who owns the State, itself a final arbiter on the social question. In whose interest does the State function? Who is the main character in its budget, Murambiwa or George Soros?

When the soil speaks.

These are core questions and I may come back to that matter, possibly next week. But let one point be made here and now: in Africa, a dead man’s word has the aura of law. Ivhu rinoreva, the soil speaks and whoever contravenes its will stands to suffer, brings misery not just to himself and his immediate family, but to the whole community.

We do not recall the thoughts of our dear departed in vain, still less to defeat those very thoughts by pretending to be guided by them. Honourable Minister, yours was a very poor way at preemptive radicalism. Indeed, the people do not fight for ideas like democracy, good governance, transparency, outside of core welfare issues relating to material benefits they need, beyond their neo-liberal wants. To know this is to reject prescriptive Europe and America. It is to embrace the people — wainanchi — as the vector of public policy, of which the budget is foremost.

The copper windfall storm

But the Minister’s quote provided an excellent framework for what I have planned for this week, all of it triggered by an anomaly I picked during a short visit to Zambia this week. I ran into a Zambian storm I was least prepared for. There was a piece in one of the main papers there — a paper closely linked to the Government of Zambia — where America’s ambassador there beseechingly urged the Zambian Government to take advantage of "the copper windfall" to build enough resources for funding Zambia’s development.

The context to this advice is that world-wide, copper prices have been going up, up and up, seemingly in complete defiance of laws of gravity. And copper is the spinal cord of the Zambian economy, has been since the 1930s when the reddish-brown metal was discovered and exploited in a formal way as reckoned and approved by Adam Smith.

Of course, native Zambians had long exploited the resource, more or less the same way we did, this side of the Zambezi. That is why copper has a Shona name – mhangura. The principle is simple: you cannot name it if you do not know it; and to know it is to use it. We did not wait for the arrival of the white man to know copper.

Metal in, ore out

The reddish brown metal has been fetching billions on world metal markets and yes, our neighbours to the North have been doing handsome business from it. You drive between Beitbridge and Chirundu, your sense of space is menaced by monstrous trucks groaning under the weight of huge earthmoving equipment, or some rotund bowel you can never put a name to, possibly for use in the smelting business.

Or it could be a stupendous transformer the size of my house somewhere on the leafy side of Harare. And out of Zambia you meet trucks and trucks headed down South, carrying copper ingots. I hear the road to Katima Mulilo groans under the weight of dumpers carrying ore, copper ore, destined for Europe via the Namibian port. Things have been happening for Zambia and hey, it’s good to have such a successful neighbour.

A cry of the wounded

Reading and researching a little more on copper and Zambia, I get to know that the British, the Swiss, Canadians and South Africans have been hard at work on Zambia’s copper deposits, with the Chinese hard on the heels, but dogged by labour-related issues.

In concert, corporates from these countries have been devouring mountains for the reddish-brown metal, leaving Zambia ruptured and wounded, it’s fractured limbs fresh and weeping. And you see a bit of that: huge mounds of fresh brown earth, piercing the heavens with the tautness of an excited nubile breast.

One hopes this is Zambia in a profound love-making tango, not an environmental rigor mortis setting in on raped and fatally wounded Zambia. You search on the internet and your worst fears are validated.

Slowly but surely, an environmental movement is taking root around mining areas, driven by embittered communities. Some rivers are now "dead", rich agricultural land deeply gullied. Zambia is beginning to cry from its wounds and one hopes she follows and reads about some little war Obasanjo vainly sought to hide in his regal garment, the little war of the delta reaches of Nigeria, all of it rendered sterile or dead by BP & Shell. More important, that she reads how America reacts when he holy lands are fouled by its elder cousins, the Brits.

Between plenty and indigence

The American ambassador is proposing that Zambia skims from the copper windfall, which he says will not be forever. He pasted a date to the windfall.

He thinks it may not last beyond two years, which is why he urges Zambia to introduce, sorry re-introduce, windfall tax on all resource companies.

Re-introduce is the word. Zambia had windfall tax before, but removed it after all manner of threats from these western conglomerates. Not idle threats if you ask me. Ask Australian politicians how these companies can change the political deck, overnight.

So the State scrapped the windfall tax, leaving these multinationals to feed fat, unhindered.

Each year, the price of copper has been going up, and today stands at about US$8 300 per tonne.

Everyone — to the miner — knows copper and good prices are coy suitors, which is why the last such happy coincidence happened in the 1970s, and have taken a good while to come back.

In between these reluctant cycles of famine and plenty, indigent Zambia writhed to the same depth it laughed in plenty.

Kaunda came and is now gone. Chiluba came, stayed through his terms. He too is now gone. Mwanawasa succeeded Chiluba, but the good Lord called him.

KK’s cocoa, Nkrumah’s copper

Much of the groundwork was done under Mwanawasa and today President Rupiah Banda is in the saddle and stands to reap the second round of the rare copper windfall, stands to receive this unique piece of advice from America’s envoy on the same. If one were to interview KK, most probably he would equate copper to cocoa, Nkrumah’s cocoa: at once a source of fabulous wealth, and a source of frightful woes.

Both are commodities of swings and roundabouts, with neither tethered to offsetting gains, or offsetting losses. Today President Banda glories above the worries of his three predecessors. Christmas has definitely come, but occurs once a year, and this is the message to Zambia, only dropping from an unlikely set of lips.

The day the cobra spat

I said I drove into a Zambian storm. Zambia will have elections next year and yes, you begin to feel hell’s temperatures, slowly graduating upwards. I know the weather of elections. The season of the spleen is upon that country, and with it, all the hard words devoid of warmth and love. This thing they call demo-crazy! As here, the Zambian media editorially organizes around dominant political trends, which means around incumbent President Rupiah Banda, around Presidential aspirant Michael Sata, "the Cobra" for short.

From these two men, or more accurately, from the causes of these two men, does the Zambian media borrow electoral anger appropriate for the season Zambia is about to enter.

I sample an editorial comment from the Zambian Post, itself pro-Sata: " . . . Rupiah and his friends are more comfortable defending foreign interests than they are championing the rights of our people . . . How can it be wrong to collect rental charges for the resources that the mining companies are renting for their own benefit?

"We know that they [Government] want to hide behind pseudo-capitalism and all sorts of ideological masks to justify their complicity in this fraud against our people.

"How can the mining companies be allowed to reap all the benefits of the copper boom without proportionate and reasonable slice being given to our people?

"Does it make sense that out of copper sales of close to US$3bn, our national treasury should only benefit US$77million? Who is getting the difference?

"It is shameful that it takes people from other countries to come and tell our leaders that they need to act responsibly and to collect reasonable revenues from the mines. This sort of advice need not come from outside.

"Everybody knows that copper happens to be our biggest economic resource which, common sense would tell us, we need to harness and utilise to provide a base for our own economic development . . . "

Between profits and people

The editorial continues: "The mining companies that are busy extracting ore from the ground and exporting copper at a huge profit need to think very carefully about their activities. If their undertakings in this country are long-term, as mining normally is, then it is in their interest that a win-win formula be worked out between them and our people.

We say this because it is folly to think that our people will always accept a situation where foreign mining entities extract copper and other mineral resources from our country, take away all the profit, leaving environmental degradation and poverty in their wake. We should not wait until people begin to agitate." This editorial of November 24, 2010 goes deeper: "…the same mining companies that we refuse to tax in Zambia are going to get taxed in their home countries.

What this means is we are allowing people to extract copper from our country to fund growth abroad at the expense of our people. It is also the same money that our government will be falling on its knees to borrow at very high interest rates — the very money we could have accessed by taxing the mines here." And an election stinger: "If they [Government] cannot listen to us, at least let them listen to the Americans, the IMF and the World Bank who are all telling them the same thing."

Too long for the West

Now, make no mistake, President Banda is no one’s poodle, which is why he faces an opposition favoured with formidable support from the usual culprits. Western powers in Zambia think the MMD has been long, too long, in power, the same way they reasoned UNIP was too long in power. They want President Banda out and have been doing things behind the scenes, the same way I was shocked to learn of their similar shenanigans in Kikwete’s Tanzania.

Absolutely no problems with Jakaya Kikwete the person. None. But he happens to lead CCM which has been in power since the beginnings of Independence and to the West, that is culpable. And the reasoning is: if we like Kikwete, we cannot guarantee that CCM will give us another candidate we fancy, after Kikwete! That way you and me — our collective destiny — is decided on the altar of human chemistry, which becomes country chemistry. But the clue came from Americans whose "After Mugabe" report put it all too well: the time of party and leadership change provides maximum leverage for donor influence! That is what is at stake. I will leave Zambians to decide who shall govern them. It is none of my business.

The cradle of liberation movements

What is of interest to me is that country’s sense of ownership and entitlement, entitlement in the sense that the Indian Nobel laureate, Amartya Sen, would use the term. Fundamentally because Zambia is not just another Southern African state. Zambia is the citadel of Southern African anti-colonial, anti-imperialist struggles. MPLA, FRELIMO, ZANU, ZAPU, ANC, PAC, SWAPO, all these liberation movements came out of Zambia, or had something to do with it, Zambia under KK. What happens, or does not happen there, has immense implications for all of us, sons and daughters of that super-state we call Zambia. During my stay, I mingled with Zambians, great and small. I mingled with the beau-monde, the high world of diplomats during my short but eventful stay there. I ate lots of zvihuta or "quelea" birds for which Lusaka is renowned.

How Zambia loses the game

Two things emerged and I will risk recording them. Some western diplomat from a Nordic country, speaking in clear exasperation, says: "I repeatedly tell these people [Zambians] they must re-introduce windfall tax. This copper boom will not last. What will Zambia have for show? Mining dumps? Do you know that these companies are in fact selling copper to themselves, by way of their offshore makeshift subsidiaries which in turn take the copper to the London Metals Markets or its American equivalent? This internal sell can be as low as US$2 000 per tonne, well below the US$8 000 mark. Zambia has made tremendous concessions to these mining houses, including concessions on pre-productions expenses." I googled on Government website for the Ministry of Mines and Minerals Development. It is a site sponsored by the EU and it tells me an investor who brings in say US$100m, will enjoy a tax break until he recoups his initial capital, after which he begins to be taxed under a very generous tax regime.

Cheating multinationals

Zambia’s mining regime makes huge concessions, which is why there is this boom. But where a company cheats through transfer pricing – say disposing copper to an offshore makeshift subsidiary at US$2 000 - how many years will the company need to recoup its seed capital of US$100m? But that is a lighter question. The real hard one is what quantities of copper and copper ore will have been removed from Zambia before the US$100m is recovered, at no single kwacha to Zambians? And this is coming from a Western ambassador? Would the same advice be given here to Robert Mugabe, the President of Zimbabwe, a neighbour and a friend of Zambia – in fact Zambia’s political protégé from the liberation struggle? Why does resource exploitation by the West in Zambia inspire pity and fervent advice from westerners in that country, while opposition to it here invites sanctions, Zdera, MDC and regime change? It cannot be right until it drops – manna like – from the lips of the American ambassador, here or elsewhere? Or the West has to have engorged itself to fullness on our finite resources, before its conscience to begin to kick in? Three generations of leaders should have come and gone – all in grief - for the West’s conscience to be aroused and stirred? We have an American ambassador here. We have the IMF. We have the World Bank here. None of these players have asked for a desk in Kasukuwere’s ministry, to proffer advice on extracting benefits from these multinationals operating in the sector of non-renewables. None advised the Finance Minister to insert a major policy shift in mining. Or has the native here gone one step too far by asking for 51 percent ownership? He must just limit himself to, and eat crumbs falling by way of taxes?

Wisdom from Kamwala

The second point I got from an ordinary Zambian when I visited Kamwala market. I had provocatively asked why Zambians are huddled on the laced margins of their great city, leaving South African chain stores to luxuriate at the centre, leaving them right on the fontanel of Manda Hill, the hill of burial. "We Zambians have a poor sense of ownership," the Zambian market-man spoke, and in clear self-contempt. "Go to any of our townships – what you call high densities in Zimbabwe – and you find a Zambian lodger in a house owned by a Somali, a Congolese or a Nigerian!" I did not live long enough to test that allegation and someone may have to investigate that. True, we had it here under colonialism. Houses in townships like Mbare belonged to Malawian migrants. But that ended at Independence. And as I write, there is a great fight in the city, a fight over properties being rented out to Nigerians and Chinese by our new city fathers. There is a strong sense of ownership and control in Zimbabwe.

Rivalry of paupers

But I am almost inclined to believe my Zambian informant from Kamwala. Otherwise why would the belligerent Zambian Post limit itself to pressuring the Zambian Government on tax, and not on ownership? Why doesn’t Zambia make a case for the ownership of its non-renewable resources, the same way Zimbabwe is attempting to do? Then we will have that as a defining feature of the Southern African mining environment. Then we would be stronger as a region in our demands against miners from the West and East. Then the West would not divide us in order to misrule us. And the modern divide-and-rule comes by way of fomenting a petty sense of competition between African pauper states. We are ranked and we all compete on comparative badness, often getting drunk by fumes of false greatness, false progress described for us by the very people who rob from us. Once, Zimbabwe was touted as the better country. Today it is something else. But if you take a Zimbabwean and a Zambian, set them against a white man, you see no difference. We are all looking for a job from the same white man, our collective bwana mukuba! We the un-owning; we the owned ones, indeed a purchased people. And siblings afflicted by a false jealousy – received jealousy – can never sit down to plan together, work together for shared futures.

When the ides of March is come

My biggest worry is that the issue of ownership and empowerment comes to Zambia in an election season. As always happens, a real national agenda item gets trivialized. The mining giants are setting the pace of prices, and the once salubrious Lusaka is not that anymore. Things are just expensive, well beyond the reach of ordinary Zambians. I am not sure which customer South African retailers have in mind when they set their prices for goods they trade in that country. But what happened in South Africa itself, then followed by Mozambique not too far back this year, tells me of the two steps we in Southern Africa are fated to take, beyond the crossroad: empowerment or unrest triggered by exclusion. The debate on ownership cannot be deferred much longer, in the name of FDI and mere jobs.

Locating real Biti beneath rhetoric

Some useful statistics from Minister Biti’s budget. A measly US$5million was set aside for the empowerment programme and angry Supa Mandiwanzira tells me it cannot pay for the smallest mine in the country. Is that not great concession to a people seeking material benefits and a guaranteed future? Out of the two diamond sales we have had in the country (outside of the latest one), about US$85,2m was raised. Of that, about US$42 million came to the Government of Zimbabwe, slightly over US$19 million of which related to dividend payment. The Zimbabwean Government is part-owner of diamond mines. Put differently, we got more than half of what Zambia got from her annual sale of US$3bn copper under a different ownership regime.

Where Engels fear to tread

Within the country, it is interesting that while Biti gives us soaking details on what came from Marange, he is very sparse on River Ranch and Murowa, both of which produced 300 000 carats. How much did they post to the Exchequer, Mr. Minister? And he tells us about gold, nickel, asbestos, chrome and platinum. Platinum for instance accounted for 36 percent of total mineral production, with output up to October standing at 5 077kg, with end of year projections put at 8 500kg. I searched high and low, far and wide, for what that sector puller gave to Government. Or do we not have claim over this resource the same way we seek to hem in those doing diamonds at Marange? Are these operations in another country, another territory well beyond the minister’s jurisdiction? We are finicky about what we have conquered, reticent, even awed by what falls in the hands of the white man? And if Biti gets so much from the sale of two small parcels – all owing to 50-50 percent ownership arrangement between Government and foreign companies, what does this suggest to him in terms of his watchwords of "shared, fair economy and development"? Why is Murowa not shared? That is real Cabral, is it not?

Low-inflation traders

Two other little statistics from the Minister. The Zimbabwe economy has been picking a huge bill related to imports by way of finished goods, a huge import bill related to consumption in other words. Under the minister’s watch, the consumptive import bill swelled from US$3,2billion in 2009 to US$3,6 billion in 2010, and this at a time when food security has greatly improved through enhanced local agricultural output. We have imported more than we have supported the producer. In fact, agriculture-related imports declined by 2 percent from the previous year’s figures when hunger gnawed our insides. The culprit has been the retail sector, thanks to the Minister’s policy of opening our borders, while mercilessly depressing local producers. The Minister wants to stabilize prices to bring down inflation, his number one goal. Whether this comes at the price of turning us all into vendors, he does not quite worry. And in trying to propose a way out, he falls back on the quaint idea of "import substitution"? My foot! What import substitution? These were products we were producing here, which we have drowned through imports we have encouraged.

Investing in ideas and politics

Then something else happens. Our "cooperating partners" give "us" US$360million. This is the money the British, the Americans and other westerners are given to taunting us about, we native ingrates! Of that amount – all of which goes directly to their NGOs and related agencies – US$137,1million goes towards a consumption item the minister calls "social protection services". Next comes health which gets US$84million, followed by agriculture which gets US$54,5million. The fourth major, hard on the heels of agriculture and meriting almost US$35,5 million, is an item described in the language of Zdera, an item called "support to civil society". Add the US$7,3million for constitution-making, the US$7,1million and half a million dollars to Parliament, and then you realize our profoundly concerned donors generously set aside about US$50,5 million in our politics, well ahead of water and sanitation, trade promotion and national healing. That to me seems to suggest that unlike Amilcar Cabral and his latter-day convert, one Tendai Biti, people are "fighting for ideas, for things in someone’s head", well ahead of material benefits, quite ahead of their children’s futures.

When to have is better!

I close this one with a small story I borrow from Chinua Achebe, the Nigerian writer. "Once, Snake was riding his horse, curled up, as Was his fashion, in the saddle. As he passed the Toad, who was walking on the road, the Toad said: "Excuse me, sir, but that is not how to ride a horse." "It’s not?" asked the Snake. "Can you show me, then, how it is done?" "With pleasure," said the Toad. The Snake slid out of the saddle down the side of the horse to the groung. The Toad jumped into the saddle, sat bolt upright, and galloped most elegantly up and then down the road. "That’s how to ride a horse," he said. "Very good," said the Snake. "Very good indeed. Please descend." The Toad jumped down and the Snake slid up the side of the horse, back into the saddle, and coiled himself up as before. Then lowering his head and looking down at the Toad on the roadside, he said: "To know is very good, but to have is better. What good can superb horsemanship do a man without a horse?" And he rode away." I have always thought the horse belongs to Zimbabwe. Icho!

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