Showing posts with label devaluation. Show all posts
Showing posts with label devaluation. Show all posts

Friday, August 5, 2016

Zambian Election Issues

It is always interesting to get into an election and evaluate the various issues of importance to voters. Well, if at all there are issues that are being offered. This year's elections have the same things that leave a bad taste in my mouth and I thought I should bring out what I consider to be issues for me to make a good elections for a country among the "longest period of democratic elections in Africa" - Zambia!

There elections come with the bad elements of name calling, ego promoting, terrible coverage of candidates, "busitele" campaign songs (if only our musicians produced such songs for the night clubs - we would groove for sure, and this year something worse was added - violence! We cry for issue based politics, so maybe we have different definitions of issues so I thought I could bring this out as I expect the issues to touch on economy, human development, achievement of national goals, etc. Here are my "issues" which I think would have made me enjoy the campaigns.

Human Rights
This covers all areas of human rights that us as a people should solidify and ensure are protected. They cover not only the rights that are supposed to be given to me through the Bill of Rights in the constitution, but should have all aspects of human development perspective and what the candidates will do to ensure we have these, or not have them. This is more so, with the fact that without knowing who is backing them, and the element of "donors" to impose what they consider should be the rights of Zambians, we need them to spell and commit to what they will do on this angle. It is critical. I don't want to wake up and be given rights that the western world consider rights. We as a people must ensure we decide what these rights are. So what is the stand on this issue is a basis for my vote.

What will be the position on gender based violence, equal employment on basis of gender? What will be the policy for the disabled? What initiatives will be used to achieve equality among citizens of different gender, race or tribe? How can we see you achieve this for us to follow your progress? What policy are you going to employ to achieve this?

This being the case, what is your stand on the referendum - in particular the Bill of Right. What is your message on the referendum vote and why? What rights do you hold as priority and why?

Education
What education should be given as compulsory to all children of this country. What is the plan that is setup to ensure this is attainable. Again, I don't want to wake and be told my children who are English speaking at home will have to learn in a language they don't know because someone at the Ministry of education misinterpreted a report on "familiar language" as a base for education or instruction and replaced it with "local language of the area". So imagine what a Child born of two different tribes and leaving in a different area will get when the child brings homework in that area's language! Such policies which did not even attempt to ask parents has to be enforced as policy. Worse still when the world (including China) is aiming at teaching the children English as a critical language for development, we are teaching them local languages and in local languages! What is the use of the child learning a language they will never use at home or in their life? Is this the type of policy that will continue? So what happens to the right for the children to be educated in a universally accepted language or official language? This is an issue I expected to be addressed for early childhood learners - none of the candidates has brought it up. Not a single one!

The introduction of computer and IT education is commendable. We also have had a policy that allows importation of Computers, Phones, Network items, etc without the payment of duty. This is a policy which shows a good planning behind it. We should however expect an improvement and encouraging of IT development skills on a very serious level as it would ensure a great competitive advantage in the world. We can't claim to have a large labour force to compete in the world with the likes of China, but if we educate our children well in IT and ensure competitiveness, we already have an advantage of English to be able to easily enter the world (assuming they this wont be destroyed by the language policy mentioned above). We could have software engineers and software developers which could well do as good and hope it goes into circuit board development - we have the copper! This is the greatest form of employment with the purpose of entering the world. But which candidate or party has such ideas? Who has even taken a leaf on what the world development challenges is the country facing regarding education in IT? We are a small population which can't compete in labour and cheap labour with the likes of Asian countries, however, we can use our highly educated people in IT to take over the bigger portion of the money in IT developement - just research on how much China gets for each iPhone (which is labeled "made in China" compared to the countries that make the software for it). So what is wrong with thinking of sending the hardware to China but developing the software here?

Developing of bursary loans has been on the lips of many for university students. We try to find a way to fund the public institutions and prevent student riots, yet we can't see the importance of such a loan will do. Which student will riot when they know they will be paying very soon for the loan they obtained? Ever wonder why the only ones who complain after a closure of an institution are self-sponsored students? In addition, the loan scheme would also enable the universities meet its obligations of paying lecturers on time and avoid the strikes. It is easy to look in the region of the most successful universities and see what policy has done to ensure they offer the best education and best conditions for its lecturers. We are not an island and we can learn easily.

Media
The time Chanda Chimba and ZNBC went on to create a program on one Micheal Chilufya Sata (MHSRIP), some people where so happy and rejoiced on this. They were happy that they will ensure he won't be voted into power. I don't think this worked, it might have even enhanced his chances of going into being the president of the nation. All the possible "evils" he did were so to speak "exposed", but he got the vote. The problem then, which still is, is that people did not fight to end this. There is no program now (hopefully wont be), but the issues of the "national broadcaster" being a propaganda tool for the government has continued. Now we have people complaining because they are now facing the same thing that Sata faced through Chanda Chimba's program. Should we leave it as that - a tool to be used by any government that comes into power? Has anyone addressed this?

I don't want to address the issue of the Post Newspapers as to me this issue has two wrongs and we can't take one and leave the other. I have said it before in many forums that, if you owe government in any way, you have to make good or something will follow you regardless of how it comes. I have also asked the question, if the Post paid the "owing" would they be in this position today. The law allows one to pay and then seek legal means on the so called "debt". That is an issue for another day.

Apart from hearing the issues of what the law provides for and how one candidate will address the two issues above, I think I have only heard a promise of re-opening the Post - what will be the stand on the debt? Was a law broken in the closure? These are issues we need to hear. I for one would love to hear one look at the issue of protecting government revenue and handling issues of how companies should handle they issues pertaining to government debt and payment of taxes.

Most critical, Zambia was one of the first countries to hand television, we have nothing to show for it. We are constantly being exploited by foreign companies in pay-tv since the death of CASAT. Does any of them even thing of promoting such business? Why for instance should Zambia which pays a lot on football channels not have a local company to provide the football leagues? We can't even watch our own league on our channels. Yet we wonder why we constantly come out losers in competitions? There is need to promote media and Zambia's own content, not only for adults, but children as well. Our children are being exposed to "pornographic" forms of children programs or ones filled with gay themes. We as parents even pay for this. We read "Tona" cartoon some time back or Kalulu what policy is being taken to bring this back? Imagine having a Maliogo's adventures as a series (I know Banja and such are being produced but I'm talking about free programs for our children with Zambian cultures being exposed to them). I don't think Nickelodeon has any Zambian theme for the children, why should I not ask for Zambian content?

Further, what is the stance on piracy? I know of a song for one party which was "pirated" by another one. I expected this to ignite the debate on what it means to piracy in Zambia. Are our musicians getting their pay for their creation? This is a presidential campaign level that a song is copied and it dies just like that? Really? I serious wanted a stand, we even have musicians standing as MPs, they should be addressing these issues. Every campaign creates an unforgettable song, what happens to the artist after the elections? They will only be remembered when another election comes along? To some, this is a life and only source of living, we need to do something. Why shouldn't Zambian music be exported? We are a small population which can benefit from exporting and making our music "international", we need policy to ensure that. Most importantly I want a party that thinks in that line. 

Foreign Policy
What is the stand on foreign policy (SADC, COMESA, AU and the world)? What is the stand on trade with outside world as a country and not a trading bloc? What are we benefiting from the trade blocs we are in? Are we even gaining anything in SADC apart from being an open market for SADC goods? What is the gain of having the China LDCs PTA for Zambia? What are we doing or plan to do to ensure we benefit from this? What should be our priority? What is the stand on Double taxation agreements or taxation of foreign entities and in that, the expected stand on tax evasion and tax avoidance for foreign companies?

These are issues the presidential candidates are supposed to answer. I see more "South African malls" than local ones. Are we a dumping ground for their "potatoes" for instance? Are they paying the right taxes and declaring profits? We have very little in form of contribution from our own enterprises in consumer goods and media. We seem to be a market for one country than our own companies. It is sad enough we don't own the mines, but what exactly do we own as a country. Even creations made in Zambia are now owned by some Dutch companies who we must pay for use, yet we wonder why we don't make any returns on the companies in this country.

Realistic Perspective
Sadly, following the debates around, I would add "rainfall" under foreign policy as it suits politicians to ignore what is happening and use the opportunity to blame others for low water levels - after months of rejecting and refusing that we had low water in our dams. They still blame the copper and closing of mines on this. I dislike that idea with a passion - it implies they think of me as being so dull that I can't read and analyse the global economy. When issues are so obvious, they say you should have planned for the rainfall and load-shedding! Yes, so should have been all of us when we left the country for 50 years with no improvement on power, mining, roads, rail, infrastructure in general, etc. If you need to blame, pick something within the term of the person. The moment you become unreasonable, I don't think you can help the country much. This is what is leading to what someone calls "over-procurement", there has been nothing, you bring it in the shortest possible time - Kwacha falls and people still want you to bring in other things immediately while this should not affect your current account balance! We should know what will happen when we correct one thing. This will entail a certain reaction in the economy - we need to hear what you would have done differently - that is a basis for a vote. If it was a mistake - explain where/why it was a mistake and what would have been done differently. A mere statement of no planning is what caused this, without an accompanying method of what your plans would be, is bad enough as it indicates you have no idea what you would have done. I don't even know what is worse - knowing the mistake but having no way around it. It may as well mean, you would have done nothing in the first place. Further, if a mistake is made and people point it out to you, you either give us alternative plans you had of which you chose one, or what you would do to ensure this is not repeated through your plans. That way, we know the issues are being addressed with plans you provide to us as voters.

Overall, we need to take stock of what we have, what we don't have and we choose a leader on the basis on what they will bring in. Expecting of miracles should be left for the pulpit. We need people with details of plans of addressing our plight as a people. What I have heard are unrealistic goals which contradict economics which cannot fall in one action - lower taxes, better infrastructure, no borrowing, introduction of incentives. This is not only impossible - its unrealistically not attainable in any economy on this planet. Better infrastructure is only attainable through higher taxes or borrowing. A reduction of expenditure (for infrastructure development) is contraction fiscal policy which would reduce economic activity, but a reduction of taxation is expansionary - so what will be the net result of these activities? How will you bring about better infrastructure development with the combination of lower taxes and no borrowing for example? I have heard of reduction in "unnecessary expenditure", a definition would be good of what is unnecessary and the amounts saved for infrastructure - these are issues, I look for in the statements. What will be my PAYE over your term in net basis?

The problem is that none of these is provided which lead me to believe we are in the same situation of having the exactly the same methods with different people leading the methods - at their benefits. So should we vote on the basis on having different people benefiting with no clear idea of what they will do or how they will do it?

Each candidate should give us the realistic plan and how it will be achieved. This would be a better place to gauge the outcome of who we pick. A realistic perspective is critical to assessment on my part.

Agriculture
The iron law of development says as the economy develops, people involved in agriculture reduces as they enter the secondary and tertiary sectors. So what is the stance on agriculture as it will spell the position of secondary and/or tertiary sectors. 

Africa has been said to have missed the green revolution. What is your stance to ensure Zambia passed it and got the benefits? Are we utilizing the land to the fullest possible gain for output? What is the stand on GMO - in so doing, what is the stand on organic farming we have. Have we taken advantage of this? Do we know the demand for organic agricultural output? Can we gain from exporting and promoting of organic output to the world. Stopping GMO but not fully gaining from such a move is a loss on our part as we can gain from this. What are we doing?

Marijuana has been legalized in some countries and one presidential candidate has clearly indicated out advantage in growing it. So what is your stand? Will you address the issue and aim at legalizing it, or exporting it while it is still banned in the country? Will you just continue with current policy?

These are issues that stand to be addressed in agriculture. They need to be spelled out and explained to the voters so we know what to expect from you and judge you on that basis for the vote.

Industry
What is the stand on industry. Are we aiming at still being an agriculture focused country? Are we aiming at looking at the secondary or tertiary sectors? What will be priority on each of these sectors and where do you see Zambia after your term? 

What is your stand on tax incentive and role of ZDA in industrialization. What will be of the State companies through industrial cooperation? Especially that this institution is under the presidency. We need to know what you will do. Should we expect an economy pushed and directed through state companies? What role will state companies if any, would plan in knowledge acquisition and meeting social obligations?

Employment
How will you ensure employment for the youths? What policies do you have which will bring about employment?

Which areas are more related to employing youths in Zambia. How will you help the youths in employment. Is there any promotion of self-employment? Are they tax incentives for companies or individuals who bring about employment? What are the thresholds for these incentives if they are part of your plans? Is there a direct policy of employing youths by government? What of social security system if any? 

What is your policy on statistical data for such plans on employment? How will you track the unemployed and employed? What is the policy on street vending and revenue for government considering that shops that pay taxes have to compete with street vendors both for space and customers. In this line, what of cleanness of the cities with street vendors. What plans have been put in place?

Taxation
Much as it has been mentioned above, what is the overall direction of the taxation policy in the country. Local or international taxation. What will be tax incentive and what will motivate that "incentive". What gains should we expect from compliance or the penalties from non-compliance? How will non-profit organisation be treated for tax purposes? What of those organisation that are under non-profit but are merely abusing the system?

What will be my PAYE before, during and after your term. Are you realistically implying a reduction in your promise?

Social
What is your plan on social security, Health, and all issues that relate to social elements? What are your plans on citizen empower programs? How will you ensure you will avoid policy that promotes tribalism, nepotism, etc?

What is your plan for political cadres and violence that is related to it? What will you do on the existence of political party cadres? How can we track your progress on this?

Overall, how will you unit all these policies to ensure there is a linkage and no contraction of policy? How will they work together to achieve your objectives as a political direction of the country.

As you ask for my vote as an employee, you need to prove your worthy to that office and how you will deliver what you have promised. If I feel you fail to achieve some of these or I see your plans failing short of proving you can do it, why should I vote for that particular candidate? 

These are issues I expected to hear and read about. Not words which mean nothing on how one will govern. I need to be convinced, not entertained on the basis on what happens on the street today and you change your mind on it tomorrow. Or worse, giving me a list of what this one promised without your list of promises and how you will ensure they are delivered. 

My interest is economics - your plan should make economic sense and practically achievable. 

Wednesday, January 25, 2012

Rebirth of Economic Reason ...

I have been been delighted with the sudden introduction of reasoning in our approach to economic matters of the country. For once we look at issues in the media and hear people talk using the best possible aspect of reason and economic understanding as possible. Talk is now based on issues and not tissues!

Look at how the issues of Zamtel, Debasing or the Kwacha, Corruption fight. We have as a country looked at these issues professionally and people who didn't know about them, have been educated. That's how we should handle matters that we face each day.

I hate the political talk that was all over Facebook with no logic on the matters at hand but behaving like total cadres. I think we could have done better with economic issues. We could have addressed the issues of weak tax revenues. Lack of employment and what can be done by those in authority to bring down the unemployment rate. Inflation rate (or has that now been pushed to the day we change to the debased currency?).

Infrastructure Development
What do we need to work on? I hate going to the airport which looks like its not the biggest airport in the country. Shouldn't we be thinking about building or upgrading our airports? Why not 3 terminals - at the least!

We badly need roads and this will boast our production and exports. Which roads should be first and why? We all know its expensive to maintain roads, so why not introduce toll-gates on roads to be constructed. Would actually encourage private sector to be involved in infrastructure development, especially when we eliminate the "public-ness" of some infrastructure like roads through introduction of toll chargers which will handle the issue of excludability even if there is still a non-rivalry element - all things equal of course :)!

Budgeting??
How come we have supplementary budgets all the time? Is it a failure to plan the budget? Are things being included with no budget line all the time? What has the constitution said about all this? Where are the laws and rules related to budgeting? I have not heard a soul talk about that. And I believe even the parliament over-sight on monies of the country should be strengthened further! Have we forgotten how money was used to construct and maintain roads which parliament was not told about? Is it such a short time that these issues have disappeared? We need a check on political hand in cash of the country, let them be involved in political direction. I really need to hear this as it will help our Kwacha economics in its movement and being!

Kwacha Backed
I know this issue is a thorn to some people but we need to address the kwacha. Not the political aspects as I never wish to divert to politics on this blog! But the economics of the kwacha. I believe this is the only thing that is important - to me anyway! If we work on making our Kwacha economics better, we will focus our attention on demand stimulating of kwacha backed goods (my attempt at making Zambian production a kwacha issue). The country will aim at being better in production, consumption of kwacha backed goods, getting a fair share of the mineral worth, etc. This is a way of addressing the weaknesses in our approach to economic issues and will make sure we put in place policies, infrastructure, rules and ideas to work for and produce kwacha backed goods! Proudly Zambia - that's Kwacha backing!

We need this rebirth of reason to be channelled to and focus on kwacha backed ideas, goods, services, policies, etc

Monday, January 23, 2012

Debasing the Kwacha ...

Kwacha Economics has really taken an interesting twist this week. We are now thinking about debasing and the merits or demerits associated with it.

So let me add my voice to the debate. Clearly to correct what I have read and is out of line.

I feel good when i read about people talk about economic issues which make my daily life these days (can't believe I felt the same joy about Computers and IT a couple of years back!).

Rebasing on the Zambian kwacha should be viewed from an Economist point of view! I have been shocked by mis-leading statements about this and people will in the end be lost totally. We need to understand the fundamentals that control this in straight line and not assume the economics that is being dreamt about.

Rebasing the currency is redenomination which is different from devaluation. Wikipedia would simplify it better:
"Revaluation means a rise of a price of goods or products. This term is specially used as revaluation of a currency, where it means a rise of currency to the relation with a foreign currency in a fixed exchange rate. In floating exchange rate correct term would be appreciation. The antonym of revaluation is devaluation. Altering the face value of a currency without changing its foreign exchange rate is a redenomination, not a revaluation."

(I have read sites which have confused the two! Here)

On our case, only the face has been changed by deleting the extra three (3) zeros such that K5,000.00 will become K5.00 - simple! If you look at our currency now, K5000 is written as 5ooo (small zeros). Could be design or not, but assume the zeros are eliminated. So the new currency which will be printed will trade at the different rates. Such that, your K50,000.00 will be equal to K50.00. Hard to understand? Think of it this way, K5,000.00 is equal to $1.00, right? Assume now Kwacha2 is such that K5.00 is equal to $1.00. It simply means Kwacha2 K5.00 will be equal to K5,000.00 of the old kwacha (which we are using now). Put even simpler, its like changing kwacha to MaKwacha which is 1000 times more than the old kwacha.

There is no change in value. Just change in the face of the currency. if you go get a bag of mealie meal for K25,000.00 and you have K50,000.00, the store man will either give you K25,000.00 of the old currency or K25.00 of the new currency!

Bacause of the value being the same, it has no effect on imports or exports (all things equal as we love to say!). This is a redenomination and not a devaluation. It should be easier for people who transact across borders. You can either go buy a car in dollars or rands in durban! The vehicle worth K25 million will be the same if you buy it in Rands or Dollars. Your money simply changes faces (I know the differences in exchange rates will lead to some profit or loss, that's the exchange rate issue). All in all if you carry a stable currency like Euro and Pound, that element of loss or gain in exchanging them will be no more!

So why do countries redenomination? Simple, take our case in point. We have over the years been around the exchange rate of K5,000.00 to $1.00 if may fluctuate to K5,200.00 or K4,700.00 once in a while but we are stable in that region! So a redenomination will simplify our currency (like someone said, reduce the wheelbarrow to carry the money to pay for a car!). Will now only need K5.00 for $1.00! And can even bring back coins which are irreplaceable in some transactions like parking or toll-gates! Ever wonder why we have to buy tokens to play pool? In other countries you use your money in coins! So coinage will be part of the transaction!

There is also the issue of the buried K2.1 billions! People with buried money will either dig it up (so they exchange it for the new "currency" or lose the loot as it will only be worth to light the fire with! So it will rejuvenate transactions as there will be money which has been buried being dug up. And I hope some more people will be arrested for hiding the loot!

That is a simple explanation of what we will expect with this redenomination!!!