'No Romance without Finance...
You need a J.O.B if you wanna get with ME'
Some interesting words from one of the world's famous oldies song. So can this be a good thing to start stating the obvious that Valentines and romance in particular has been commercialized? Gone are the days that you could link romance with such things as the river, sunsets, star-gazing, etc. Nowadays, believe this formula has an interesting truth
Romance + $$$ = Love
Can it really?
Lusaka woke up on an interesting note today. I saw alot of Red - shirts, dresses, gift boxes, wrappers, etc. Some one even exclaimed "How romantic!!!" This got me thinking...
How possible is it to think of love without a link to finances. I couldn't find a simple path to such bliss. Most things love included has been commercialized and really now depends on exchange rates, bank account balances, liquidity, currency, buying rates, etc! Love and romance are in a financial economy! You need so many things to conduct romantic activities, from movies, to romantic outings!
Looking at the way, moneys seems to be running all aspects of our lives, I believe the cyber space is one which makes money be a little out of the picture. Only cost is the connection charges and sometimes thats not much when u browse on mobile devices for blogs. So if money matters that much, in cyber space it should be that much. So how do we link the financial aspects of the cyber space and romance? We need to geek out a solution - as geeks are the noble citizens of the cyber space.
To my suprise, googling Valentines for geeks was an interesting result. I found many presents with interesting price tags, from a few dollars to hundreds of dollars! Geeks spend money on valentines. So what would be the financial returns in the cyber space valentine's day? How can we measure the magnitude of 'geek love'? If cyber space can link with normal world in romantic values of every day life and presents, we need to find a way to value this and tax it!
I miss the days I would go online to shut myself from everyday life and troubles and just be. Now, I have to watch out for adverts, phishing sites, malware, spy-ware, etc. I believe the economists must come up with a way to value such elements and give chance to the tax man to collect some Kwacha.
Anyway, thats a comic way of enjoying valentines day. I think you can have a laugh at some of these geek links:
http://www.mb.com.ph/articles/304260/a-geeky-valentine
http://www.thinkgeek.com/interests/valentines/
http://walyou.com/gift-ideas-for-him-her-valentines-day-2011/
http://www.geeksaresexy.net/2009/02/07/the-geek-guide-to-valentines-day-gifts/
http://www.coolest-gadgets.com/20090209/11-geeky-or-gadgety-valentine-gifts/
Monday, February 14, 2011
Thursday, February 3, 2011
Zambia-China Relation
There has been alot of debate on Chinese investments in Zambia and the negative/ positive results this will achieve. I have not had a good time to look at alot of these investments and loans that Zambia gets from China. So I will reserve my comments on the topics for now. I would have done a good service to myself had I taken my reading on China - Zambia relation and come up with a good academic paper on the issue, I may look at that and see how it goes in the near future.
Anyway, this appeared like good reading. I came across it as I searched for that elusive bi-lateral agreement between Zambia and China of 2003! I copied and paste, then informed the author, not good, but better late than never right???
--------------------------------------------------------
Zambia: From the World Bank to China and Back
By Peter Bosshard*
African governments have often praised Chinese investment as the panacea for their infrastructure sectors. Zambia’s experience demonstrates that it is not. A Chinese hydropower project on the Kafue River has brought up the whole conundrum of financial problems, environmental impacts, hydro dependency and delays that is typical for large dams. Mining is the mainstay of Zambia’s formal economy, and consumes a lot of energy. When the copper sector started booming in 2002, finding new sources of energy became a necessity.
Since the mid-1990s, the Zambian government had tried to attract funding from the World Bank and private investors for the Lower Kafue Gorge Dam, a 750 megawatt hydropower project on a tributary of the Zambezi River. In December 2003, the government signed a Memorandum of Understanding to build the dam project with Sinohydro, a large Chinese hydropower developer. China Exim Bank was supposed to provide 85 percent of the funding. “After the World Bank dragged its feet on the project for years, we reached an MoU with the Chinese within three weeks”, Israel Phiri, a Zambian government official, announced triumphantly in 2004. Lower Kafue Gorge seemed to become a symbol for the fast pace of Chinese dam building around the world.
Or so Zambia’s government hoped. During the next few years, it repeatedly issued promising statements about the progress of the project. First, construction was supposed to begin in 2004. Later, construction was supposed to start in 2006. In January 2007, the country’s energy and water minister announced again that Lower Kafue Gorge was “coming through very well”, and that Zambia would negotiate a construction contract for the project very soon. The government also kept signing agreements for other hydropower projects left and right. Yet on the ground, nothing happened.
The reasons for the delays seem to lie in the problems of Zambia’s electricity sector. According to a recent report by the International Monetary Fund (IMF), the country’s state-owned electricity utility is “a troubled company, beset by inefficiencies and high costs”. One third of all customers are unmetered, and staffing costs and distribution losses are very high. Tariffs are low by regional standards, but at $500-600, connection fees are unrealistically high for the large majority of the population. The IMF report proposes to steeply increase electricity tariffs for all consumers. The government in turn argues that the World Bank’s push for privatizing the electricity sector was unrealistic, and the main cause for the electricity shortage.
Unlike the IMF, China officially attaches no strings to its loans and grants. Yet in February 2007, a senior OECD official observed that China Exim Bank “does not hesitate to discuss changes in project-related governance to ensure loan repayment (e.g., pressure to raise electricity tariffs to finance hydropower projects), while claiming that it does not specify firm conditions”. China may be dragging its feet over Lower Kafue Gorge for the same reasons as the World Bank five years earlier.
Sinohydro also interfered with the environmental impact assessment for the project. The dam would have serious impacts on the Kafue Flats, a wetland of international importance with two national parks. Anabela Lemos and Daniel Ribeiro, two experts on the Zambezi, report that Zambia’s power utility chose the project site after a balanced assessment of economic, social and environment factors. However, Sinohydro told the utility that this was not how they did things in China and that they wanted the site to be assessed only according to economic factors. In the end, the original site was selected, but, Lemos and Ribeiro say, “the role of the Chinese dam builders in trying to focus only on the economics of the project does not bode well”.
On February 26, a representative of Zambia’s power company announced that her utility was now discussing a $600 million financing package to boost power generation with financiers from Japan, India and western countries. The first priority was on the Lower Kafue Gorge Project. The World Bank’s International Finance Corporation was undertaking a feasibility study for the project. The IMF estimates that completing the dam would take six to eight years, with mobilization of finance as “a central challenge”. Five years after Zambia turned from the World Bank to Sinohydro, Lower Kafue Gorge seems to be back to square one.
While the government chases its dream of multiple new dam projects, the country’s existing power infrastructure is falling into disrepair. According to the IMF, more than a quarter of Zambia’s power plant capacity is currently being repaired because of neglected maintenance. In mid-February, the failure of a generator caused widespread power outages. Maintaining infrastructure is just as important as building new projects, but less prestigious and often neglected.
Meanwhile, the country’s power sector strategy with its focus on large projects has left poor people in the dark. A full 98 percent of rural people and 60 percent of urban dwellers don’t have access to electricity. In July 2007, the power utility began to ration electricity supply to residential consumers in order to service the growing mining industry. And the proposed new hydropower projects will not be used to expand power supply to rural areas, but to serve the mining companies and export power to other countries.
I am not an expert on Zambia’s power sector, but supporting mining companies through large dams seems to be a highly questionable development strategy. If the copper boom fades away in another five or ten years, Zambia will be straddled with an overcapacity of expensive power plants. If Zambia guarantees the mining sector a secure supply of power from additional hydropower projects but climate change reduces the stream flow in the Zambezi Basin, the government will have to cut out residential consumers from power supply altogether in order to fulfill its guarantees to the mining companies.
It seems to me that mining companies could take care of their own power supply by developing their own projects (as long as they follow the state’s social and environmental guidelines), or by negotiating power purchase agreements with foreign suppliers. Rather than taking on huge risks for a few private companies, the state and international financial institutions should concentrate their resources on expanding access to electricity in poor areas, particularly in the countryside. This will not require risky and potentially destructive dam projects, but support for decentralized, renewable energy technologies.
*Peter Bosshard is the policy director of International Rivers. His blog appears at www.internationalrivers.org/en/blog/peter-bosshard
Anyway, this appeared like good reading. I came across it as I searched for that elusive bi-lateral agreement between Zambia and China of 2003! I copied and paste, then informed the author, not good, but better late than never right???
--------------------------------------------------------
Zambia: From the World Bank to China and Back
By Peter Bosshard*
African governments have often praised Chinese investment as the panacea for their infrastructure sectors. Zambia’s experience demonstrates that it is not. A Chinese hydropower project on the Kafue River has brought up the whole conundrum of financial problems, environmental impacts, hydro dependency and delays that is typical for large dams. Mining is the mainstay of Zambia’s formal economy, and consumes a lot of energy. When the copper sector started booming in 2002, finding new sources of energy became a necessity.
Since the mid-1990s, the Zambian government had tried to attract funding from the World Bank and private investors for the Lower Kafue Gorge Dam, a 750 megawatt hydropower project on a tributary of the Zambezi River. In December 2003, the government signed a Memorandum of Understanding to build the dam project with Sinohydro, a large Chinese hydropower developer. China Exim Bank was supposed to provide 85 percent of the funding. “After the World Bank dragged its feet on the project for years, we reached an MoU with the Chinese within three weeks”, Israel Phiri, a Zambian government official, announced triumphantly in 2004. Lower Kafue Gorge seemed to become a symbol for the fast pace of Chinese dam building around the world.
Or so Zambia’s government hoped. During the next few years, it repeatedly issued promising statements about the progress of the project. First, construction was supposed to begin in 2004. Later, construction was supposed to start in 2006. In January 2007, the country’s energy and water minister announced again that Lower Kafue Gorge was “coming through very well”, and that Zambia would negotiate a construction contract for the project very soon. The government also kept signing agreements for other hydropower projects left and right. Yet on the ground, nothing happened.
The reasons for the delays seem to lie in the problems of Zambia’s electricity sector. According to a recent report by the International Monetary Fund (IMF), the country’s state-owned electricity utility is “a troubled company, beset by inefficiencies and high costs”. One third of all customers are unmetered, and staffing costs and distribution losses are very high. Tariffs are low by regional standards, but at $500-600, connection fees are unrealistically high for the large majority of the population. The IMF report proposes to steeply increase electricity tariffs for all consumers. The government in turn argues that the World Bank’s push for privatizing the electricity sector was unrealistic, and the main cause for the electricity shortage.
Unlike the IMF, China officially attaches no strings to its loans and grants. Yet in February 2007, a senior OECD official observed that China Exim Bank “does not hesitate to discuss changes in project-related governance to ensure loan repayment (e.g., pressure to raise electricity tariffs to finance hydropower projects), while claiming that it does not specify firm conditions”. China may be dragging its feet over Lower Kafue Gorge for the same reasons as the World Bank five years earlier.
Sinohydro also interfered with the environmental impact assessment for the project. The dam would have serious impacts on the Kafue Flats, a wetland of international importance with two national parks. Anabela Lemos and Daniel Ribeiro, two experts on the Zambezi, report that Zambia’s power utility chose the project site after a balanced assessment of economic, social and environment factors. However, Sinohydro told the utility that this was not how they did things in China and that they wanted the site to be assessed only according to economic factors. In the end, the original site was selected, but, Lemos and Ribeiro say, “the role of the Chinese dam builders in trying to focus only on the economics of the project does not bode well”.
On February 26, a representative of Zambia’s power company announced that her utility was now discussing a $600 million financing package to boost power generation with financiers from Japan, India and western countries. The first priority was on the Lower Kafue Gorge Project. The World Bank’s International Finance Corporation was undertaking a feasibility study for the project. The IMF estimates that completing the dam would take six to eight years, with mobilization of finance as “a central challenge”. Five years after Zambia turned from the World Bank to Sinohydro, Lower Kafue Gorge seems to be back to square one.
While the government chases its dream of multiple new dam projects, the country’s existing power infrastructure is falling into disrepair. According to the IMF, more than a quarter of Zambia’s power plant capacity is currently being repaired because of neglected maintenance. In mid-February, the failure of a generator caused widespread power outages. Maintaining infrastructure is just as important as building new projects, but less prestigious and often neglected.
Meanwhile, the country’s power sector strategy with its focus on large projects has left poor people in the dark. A full 98 percent of rural people and 60 percent of urban dwellers don’t have access to electricity. In July 2007, the power utility began to ration electricity supply to residential consumers in order to service the growing mining industry. And the proposed new hydropower projects will not be used to expand power supply to rural areas, but to serve the mining companies and export power to other countries.
I am not an expert on Zambia’s power sector, but supporting mining companies through large dams seems to be a highly questionable development strategy. If the copper boom fades away in another five or ten years, Zambia will be straddled with an overcapacity of expensive power plants. If Zambia guarantees the mining sector a secure supply of power from additional hydropower projects but climate change reduces the stream flow in the Zambezi Basin, the government will have to cut out residential consumers from power supply altogether in order to fulfill its guarantees to the mining companies.
It seems to me that mining companies could take care of their own power supply by developing their own projects (as long as they follow the state’s social and environmental guidelines), or by negotiating power purchase agreements with foreign suppliers. Rather than taking on huge risks for a few private companies, the state and international financial institutions should concentrate their resources on expanding access to electricity in poor areas, particularly in the countryside. This will not require risky and potentially destructive dam projects, but support for decentralized, renewable energy technologies.
*Peter Bosshard is the policy director of International Rivers. His blog appears at www.internationalrivers.org/en/blog/peter-bosshard
Wednesday, February 2, 2011
Economic Inequality in Zambia
I have been told that almost all our problems in Zambian economics (from a maximum of 3 possible problems that I wanted narrowed down) are Inequality, Duality and Non-diversification. I will try and address these issues and see where we stand in Zambia on these aspects.
I will start with Inequality as I believe it is not only vital, but an aspect of Zambia's economy which has received a fair share of screams in the political arena. So a look at this will have a much more needed avenue to the problems of Zambia.
Economic Inequality
Defined as: Wealth and Income differences. This is differences in the distribution of economic assets or resources among the people (mainly between the rich and the poor). Street-wise definition would present a better understanding as it simply says "the gap between the rich and the poor".
Of course we can't call for an absolute equality in economic status, where all citizens are economically equal, as that is not only impossible but the mere existence of such a situation would present difficulties in running the economy itself. But a situation of a smaller gap between the rich and poor, would present a good economy as it will mean, resources are at least equitably distributed - under those cirmstances. The bigger the gap between the rich and the poor however, the more the resources are unequally distributed. As dramatically put "no citizen shall be rich enough to buy another and none so poor as to be forced to sell himself." (Rousseau?)
I have noticed (with sadness) that most Zambian politicians are always taken by ideas of Economic growth. What will this translate into? How will they define Economic growth?
This has little to do with the inequalities that face its people. It is in its crudest possible sense, mere politiking. I would appreciate a look and addressing issues of economic inequalities before we address issues of economic growth. As this will create a situation where the benefits of economic growth will be equitably distributed among the people. Under the existing structures, the more Zambia's economy grows, the wider the gap between the poor and the rich grows (unless specific measures are taken). I think it will make sense to aim at reducing inequalities in the economy also as it will translate into better living, if it's accompanied by meaningful changes in income distribution. No sense in having a growing economy with more than 70% of the people in absolute poverty. Or having a very rich elite benefiting from the economy and the majority of the people in absolute poverty. So we should aim at having a growth, with specific distributional policies aimed at making the gap between the rich and poor smaller and ensuring everyone benefits from the endorements of the country. Any other direction will result in bad and non-benefitial growth - if that is even achieved.
Ideas of empowering citizens will produce better results, if there is political will to achieve equitable distribution of resources in the country. Such sad statictics make me think we need to re-visit the planning aspects of our economy:
"80 percent of the population in terms of earnings were reported to have acquired only 31.3 percent of the total income, while the top 20 percent of the population claimed 68.67 percent of the total income" (April 2008, CSO monthly).
A good economic idea, would be to have policies which will encourage and move the poorest of the poor, to a more meaningful economic standing. This would greatly improve the living standards of the people, encourage them to aim higher, educate their children, and live a moderate life. Under the prevailing situation, the poor are seriously trapped in the poverty trap. Where movement to any meaningful economic life is not only limited, but in some cases even impossible. And so they end up taking their children out of school, abuse them through child labour, prostitution and early marriages. Their children will either go through the same path or even worse.
On the other hand, the rich keep getting richer. Corruption is the order of the day. It gets so bad that you even expect all government workers to be corrupt in one or the other. If there are policies which would get some of this money enjoyed by the rich and ploughed into education and health, we will have a better people living a better life.
Where Do We Start From?
This is easy. Leave it to the economist to design, you will produce a good product. Add politicians to the equation, eveything is a mess! And yet, its the politicians who ultimately decide what to do. I believe having a very honest political team, could even do better than the economist. Unfortunately, politics in Zambia is all about getting rich and not providing a service! Every project has to be looked at with 'benefits for me' or 'blocking X's party or X himself from enjoying this'. The politics of the belly as one once coined the phrase!
The African Problem
Africa would move fast than most places on this planet. It has the resources to do it. From oil to Uranium. It can ultimately live with no worries about tomorrow as its endorements have whatever the African people need. However, Africa is always hurt and destroyed by it people. The selfish politician running the country, and the people close to him. Sometimes you wonder if we got our independence to early before people could understand the true meaning of a 'States Man' or maybe the colonial masters trained the wrong people to start with. Our freedom fighters had a vision of the continent. They sacrificed alot to achieve what we have achieved now.
But the worse group came after these left. In some cases, the ideas they had before independence died with the new found power of being a President of such a country! Corruption, brutality, rigging, self-enriching method of governance has spread in all corners of Africa. Inequality came like wild fires.
So maybe to rid this continet of inequality is to start with leadership. We need to put in motion a system that will favour systems and governements that strive to address inequalities of the people. Then we can set in motion, economics which addresses these problems. Its not a one country problem, its an African problem.
Solutions!
Besides the mere fact of changing the politics of any one country, the solution of inequality is to put in place 'Pro-Poor' Economic pathways. An economy must recognise the problems of the poor, find simplest possible ways of addressing these problems, setup mechanisms which will address these and any problems which will result from the elimination efforts.
Over the next blogs, I will look at the remaining problems and address possible 'Pro-Poor' solutions.
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