Find us on Google+

Thursday, 27 March 2008

Election Special - Zimbabweans flee for Botswana (CNN Report)

22 comments:

  1. And what is the cause the bad economy in Zimbabwe again?

    Perhaps it is time to lift sanctions? Of course, the MDC is calling for more sanctions, and even foreign invasion.

    ReplyDelete
  2. MDC must renounce Zimbabwe sanctions
    RECENT OPINION ARTICLES
    By Masiiwa T. Shwere Chisango
    Last updated: Fri, 06 Apr 2007 20:32:00 GMT

    NOTHING but the economic sanctions imposed on Zimbabwe by the Western world, with the complicity of the MDC, accounts for the economic decline that we have witnessed.

    As such, the MDC’s connivance with the West to ferment the economic collapse takes away their legitimacy as a Zimbabwean political party. The MDC may legitimately and credibly be against Zanu PF, but when they deliberately, or unwittingly courted Western sanctions that now render the living conditions of an ordinary Zimbabwe at Machipisa insufferable, they downgraded to a much lower and sinister plane where they can never claim any legal, political or moral right: being anti-Zimbabwe. Read more...

    http://www.newzimbabwe.com/pages/opinion258.16231.html

    Western sanctions source of Mugabe's demise
    RECENT OPINION ARTICLES
    By Jon’osi Sibanda
    Last updated: Tue, 20 Mar 2007 04:18:00 GMT

    THE United States and their European Union and Australian allies must be smiling.

    Finally, their plan to remove Robert Mugabe from power appears to be gaining momentum. The end of their arch nemesis' reign in southern Africa appears nigh.

    This is thanks to the erosion of Mugabe’s power as a result of the financial sanctions imposed against the country by the Western countries and Mugabe’s own obviously demented response to the ensuing economic, social and political crisis facing the country. Read more...

    If anyone is serious about helping the people of Zimbabwe, they could start with repealing the Zimbabwe Democracy and Economic Recovery Act of 2001, according to which:

    the Secretary of the Treasury shall instruct the United States executive director to each international financial institution to oppose and vote against--

    (1) any extension by the respective institution of any loan, credit, or guarantee to the Government of Zimbabwe; or

    (2) any cancellation or reduction of indebtedness owed by the Government of Zimbabwe to the United States or any international financial institution.


    What are these internatinoal financial institutions:

    IMF
    International Bank for Reconstruction and Development
    International Development Association
    International Finance Corporation
    Inter-American Development Bank
    Asian Development Bank
    Inter-American Investment Corporation
    African Development Bank
    African Development Fund
    European Bank for Reconstruction and Development
    Multilateral Investment Guaranty Agency

    ReplyDelete
  3. That's all ?

    The US telling its directors in multilateral and international orgs to oppose loaning money to Zimbabwe ? Remember that investment and trade with Cuba or Iran in general has been criminalized and they somehow managed to not collapse. Nothing stops Zimbabwe from seeking loans on the market except, well, Zimbabwe's policies and credit-worthiness.

    But beyond that, it is ironic to hear people complaining about the IMF or the US involvement and then argue that the lack of involvement is the sole cause of everything wrong.
    Sovereignity comes with responsibilities too.

    ReplyDelete
  4. Cuba or Iran

    Iran is still selling it's own oil. In fact, part of the reason for the hostilities against Iran, is that it is running an alternative to OPEC.

    You don't have to look far, to see what happens if 'donor aid' disappears from the budget overnight. In Zambia, that is 1/3 of the entire budget.

    The IMF played the same trick on Kenneth Kaunda back before 1991.

    ReplyDelete
  5. Mrk, I don't think you have fully addressed Random's very important second point : "But beyond that, it is ironic to hear people complaining about the IMF or the US involvement and then argue that the lack of involvement is the sole cause of everything wrong.
    Sovereignity comes with responsibilities too."


    For a long time I have seen analytical double standards applied to the USA. Often people ask the USA for economic support and general economic leadership. Even now they are hoping the USA can sort out its housing crisis. But when USA decides to use its military superiority to guarantee economic security, the world turns around and condemns them. You can't have it both ways.

    ReplyDelete
  6. Cho,

    For a long time I have seen analytical double standards applied to the USA. Often people ask the USA for economic support and general economic leadership.

    Do you mean internationally or domestically?

    It is completely legitimate to ask or create deals with the United States.

    The problem is that the IMF and World Bank are not the United States. Because of their lack of democracy an transparancy, there has been a 'gentleman's understanding' that the IMF's leader comes from the US, an World Bank's comes from the EU.

    That access has been abused to foist the theory of neoliberalism on the world, and too often, poor countries have not been in a position to say no to the IMF, and therefore say no to neoliberalism - unregulated international trade ('free trade'), reduction of the role of government, etc.

    Domestically, the housing crisis (which directly threatens the 2/3 of the US economy that depends on the US consumer) is the result of deregulation. Obviously, the answer is regulation, because obviously, the market cannot regulate itself, without creating massive economic damage. The kind of damage that had the political effect of giving rise to nazism and to communism (in the resulting occupation of all of Eastern Europe that followed nazism).

    None of that would have been possible without the Great Depression, which was also caused by conservative economic theory - 'let them all fail' and the economy will correct itself.

    And as a result, what would have been an ordinary recession turned into the Great Depression.

    For a long time I have seen analytical double standards applied to the USA. Often people ask the USA for economic support and general economic leadership. Even now they are hoping the USA can sort out its housing crisis. But when USA decides to use its military superiority to guarantee economic security, the world turns around and condemns them. You can't have it both ways.

    There are very few situations in which you can't have things both ways when we're talking about these economic theories.

    This US government is not securing it's ecnomic security with it's military - AT ALL.

    This US government is a government of criminals. Their list of crimes is nearly endless, and may take decades to unravel. They make Richard Nixon look like a boy scout.

    The invasion of Iraq was made under false pretenses. At Neuremberg, the invasion of Poland was seen as the original crime from which responsibility for all consequent crimes resulted. Abu ghraib, death squads, the use of mercenaries, the stealing of Iraqi oil - just to name a few, and all of those are crimes. Hundreds of thousands of dead Iraqi civilians.

    Domestically, there is electoral fraud (caging), political prosecution of opponents (former Alabama governer Don Siegelman, who has just been released on bond), illegal wiretapping, presidential signing statements, disseminating false information to the US public (fake color coded alerts)... The Vice President held on to 400,000 shares worth of options on his former company, Haliburton. He has personally benefited millions of dollars from the militarisation of US foreign policy, and specifically, the no-bid contracts the Pentagon gave to Haliburton. (Haliburton stock went from under $5,- in the last months of 2001, to over $40,- in 2006.) Usually, individuals elected to President or Vice President, put their equities in a special fund that cannot be touched as long as they are in office - not this bunch. Because they are criminals.

    Even now they are hoping the USA can sort out its housing crisis. But when USA decides to use its military superiority to guarantee economic security, the world turns around and condemns them. You can't have it both ways.

    If the United States does not sort out it's housing crisis, they will have another Great Depression. And have you noticed that the very first public money the neoliberal/neocons spent, was to bail out the mortgage banks (not the home owners) with taxpayer money?? Thinks bout that - all the money that was spent to bail out Bear Stearns, is evil taxpayer money - the money Dubya wants people to keep, through more tax cuts.

    So much for their true belief in free markets.

    Neoliberalism is socialism for the rich, and free market capitalism for the poor.

    And that is another thing. It costs the US or the IMF nothing to tell Zambia to reduce it's hospitals or schools. If 100,000 people in Zambia die because they can't get medical care on time, it means nothing to the IMF. They do not feel the pain of their own decisions. In the United States, because it is a democracy with checks and balances, that is completely different. They could never make such recommendations.

    If you want to talk about double standards, let's talk about the whole neocon/neoliberal philosophy.

    I think professor Ha-Joon Chang made the hypocrisy of demanding that developing countries develop without protectionism, very clear. No developed countries (with the exceptions of Holland and Switzerland) developed as the result of free trade.

    Were those the double standards you were talking about?

    ReplyDelete
  7. And here is another contradiction. The government say it believes in free markets. And yet, it continues to depend on 'donor aid' for much of it's development.

    Wouldn't the markets, miraculously, take care of infrastructure development?

    And that is the key achilles heel of neoliberal theory. They take infrastructure of all kinds for granted (economic, political, financial). Because they come from a society that is highly developed, they presume that things have just always been that way. They take for granted that people can just vote once every 4 years. They take for granted the dams and highways that were constructed with public money.

    ReplyDelete
  8. MrK,

    My point is actually very simple. African nations are very poor. They ask the USA for money often. The USA gives it to them, expecting a return of some sort. Down the line, the USA comes calling asking for favours and more or less the developing nations tend to refuse.

    My point is that it is silly. If you do deals with the devil, you should be suprised if he takes your life.

    If you accept that economic and military power are linked, then you have to accept that by entering in any economic relationship with anyone you risk your freedom down the line.

    This is the point I hope all Zambians should be aware of as we deal with China. China is not investing in Zambia for "free". It wont risk its long term economic security for anyone. Down the line if Zambians changed the tune and became unfriendly after China pours millions, things could get nasty.

    The same principle applies to any economic and military power...that was all I was saying.

    I still think you have not addressed Random's point. I accept that there are other contradictions eslewhere, but you have not addressed THAT contradiction. You can't simply ignore because the IMF has its own contradictions!

    ReplyDelete
  9. Cho,

    I sort of read over much of Random's post, because he refuses to be informed. I can't respect that.

    Now also, I don't understand which contradiction he was talking about. Perhaps if it was spelled out...

    I will try again. Random wrote:

    But beyond that, it is ironic to hear people complaining about the IMF or the US involvement and then argue that the lack of involvement is the sole cause of everything wrong.

    I think (because it wasn't spelled out which writer - there are two in the articles I cited) he was commenting on.

    If Random characterises the overnight withdrawal of 1/3 of the national budget as 'a lack of involvement by the IMF' (let alone the international whispering campaign to starve Zimbabwe of foreign exchange), then that is a disengenuous argument, which I don't want to accuse him of.

    It is armtwisting and interference in domestic policy. The same tactics forced Zambia into multi-party elections, when it's institutions were not ready for it back in 1991. The resulting massive theft of natural resources and public resources is a matter of record.

    As we also have seen, the IMF and World Bank will take no responsibility whatsoever for forcing the government of the day to privatise (they never do, anywhere in the world, although it was their policy), and for forcing the government of the day to hand over the mines to western corporations - based on their bogus advice (copper prices will not rise in the minister's lifetime) - and if you don't believe us, we will suspend all donor aid, as in Zimbabwe.

    This has nothing to do with not taking responsibility, which is an easy copout to explain the whole failure of the neoliberal enterprise.

    And this is the ultimate not taking of responsibility, as Ha-Joon Chang pointed out in his lecture. The basic presumptions of neoliberalism are never wrong. Because they are never wrong, they are never revised, even though they end in dismal failure (Indonesia, Chile, Argentina, Russia, Zimbabwe, Zambia, etc. which last until they are reversed by more nationalist elements like Vladimir Putin or the Leftwing presidents in South America) - the list is endless, and it is endless, because the IMF never learns from it's mistakes. And they don't learn, because they and neoliberalism ('free trade', 'privatisation', austerity, less government) can never be wrong. In fact, they think of the chaos they create as one of the desired outcomes ('creative destruction'). In fact, the more destruction they wreak, the more successful they think they are. So how can they fail?

    In fact, people (including Random?) are bashing Zimbabwe - but Zimbabwe did just that - take responsibility, and say a loud NO to the IMF, after complying to some of their austerity measures, and seeing the dire results on it's population. In a a way, Zimbabwe (and Chile, and the Asian meltdown) is what happens when you say no to the IMF. Remember that for most of his rule, Robert Mugabe was praised by the West, the IMF - until he said no to them. Now people are talking in an accusatory way about the Gukurahundi issue of the very early 1980s, but for the 17 years leading up to 1997, this was never a problem. But today it is?

    Zimbabwe also took responsibility for it's land reform program. When Britain unilaterally sidestepped their responsibility to fund land acquisition in Zimbabwe, Robert Mugabe did not give up on the land reform, and switched from the failing 'willing buyer, willing seller' to the 'fast track' land reform program. Now I think that land reform should have been taken care of in the 1960s, let alone in 1980, Africa would not be in the state it is in today.

    But no one is talking about the British government's responsibility in this issue.

    Zimbabwe: The Spark ... Claire Short's letter of November 1997
    by Baffour Ankomah
    March 31, 2003

    ...I should make it clear that we do not accept that Britain has a special responsibility to meet the costs of land purchase in Zimbabwe. We are a new Government from diverse backgrounds without links to former colonial interests. My own origins are Irish and as you know we were colonised not colonisers.

    With that letter, the new British government effectively scrapped the Lancaster House Agreement and the British government's obligation to fund land reform in Zimbabwe.

    However, you will not read that in the media. In fact, you will read very little criticism of Britain's role in the events that followed 1997 in Zimbabwe. Talk about not taking responsibility.

    ReplyDelete
  10. That's frigging great !
    The government of Zimbabwe is taking responsibility by arguing that some loose, timid and narrow sanctions are the sole cause of Zimbabwe's economic collapse !

    That's some brilliant logic reversal ! And of course the fact that Cuba and Iran who are under more rigid santions are better off doesn't tell something. And of course, nobody asks why the hell Zimbabwe depended on donor assistance anyway. Of course, no one should ask how donor aid makes maize grow.



    That's just irrational.

    ReplyDelete
  11. Is the Zimbabwean government the only government that relies on 'donor aid'? Including the 'free market', 'laissez faire', 'government is bad', neoliberal governments?

    I mean, what are the neoliberals doing, taking taxpayer money from donor countries?

    Perhaps if they really depended on the free markets to take care of everything, their economies would collapse?

    ReplyDelete
  12. Huh ?

    Stop arguing with a fragment of your imagination and read what I said.

    ReplyDelete
  13. Random,

    If I haven't replied 'to what you said', it is because you do not say very much that I can get a handle on.

    Whatever you do say, is open to multiple interpretations.

    Then, you have the gall to choose not be fully informed, but somehow demand that I take whatever you say seriously. This discussion will have to take a little effort.

    It would also help your credibility, if you didn't start your posts off with exclamations and other monosyllabic punctiations. They feel like the tactics of very insecure persons. Most people just make their point and move on.

    Now you keep imploring me to read what you said, but you are apparently too insecure to actually watch a simple documentary on the highly destructive effects of the neoliberal policies you support. How can you then demand that I read what you have written?

    Now, I will attempt to decypher what you have said. Unfortunately, I don't have a PhD in psychology, so by necessity, some of it will have to approximate what you meant.

    That's frigging great !

    I'll have to infer what that means.

    The government of Zimbabwe is taking responsibility by arguing that some loose, timid and narrow sanctions

    Where is the evidence that the denial of credit from international sources is 'loose, timid and narrow'? Please provide some evidence for that, rather than proffering your personal opinion. Thank you.

    From what do you infer that it is 'the government of Zimbabwe' which says so?

    I have just referred you to a website (govtrack.us) that lists the laws passed by the US government (the House of Representatives and the Senate). How are they connected to the government of Zimbabwe?

    are the sole cause of Zimbabwe's economic collapse !

    Who said this is 'the sole cause of Zimbabwe's economic collapse (exclamation mark)?

    I haven't. But if we are to examine world record inflation, then it is very odd that the one thing that would cause inflation - the absence of foreign currency, and it's effect on the price of imported goods - would be completely absent from any discussion.

    That's some brilliant logic reversal !

    I have no idea what you mean by that.

    And of course the fact that Cuba and Iran who are under more rigid santions

    Is that 'a fact'? Perhaps you would like to compare the sanctions all three countries are under, so we can compare them?

    are better off doesn't tell something.

    I don't know what that is supposed to tell me. That communist countries are worse off? But then Cuba is a communist country. That secular countries are worse off than theocracies?

    What exactly is your stated opinion supposed to tell me?

    And of course, nobody asks why the hell Zimbabwe depended on donor assistance anyway.

    Well that is a good question, but it is not a question that can be uniquely posed to Zimbabwe. In 2004, the Zambian government's budget of $1700mn (US) was partly made up of $600mn in donor aid.

    How does a neoliberal explain the presence of donor aid in Zambia's budget, when markets and the private sector are supposed to take care of everything, and the donor aid that is received comes from taxes raised in other countries?

    Of course, no one should ask how donor aid makes maize grow. That's just irrational.

    I have no clue what that means? How does donor aid make maize grow? Or not grow?

    ReplyDelete
  14. And of course the fact that Cuba and Iran who are under more rigid santions

    Is that 'a fact'? Perhaps you would like to compare the sanctions all three countries are under, so we can compare them?

    are better off doesn't tell something.

    I don't know what that is supposed to tell me. That communist countries are worse off? But then Cuba is a communist country. That secular countries are worse off than theocracies?

    Of course, Random, one thing that 'it could tell me', is that neither Iran's nor Cuba's economies are foreign owned.

    That neither Cuba's nor Iran's economy is owned by white farmers, white corporations, and that neither gave in to the IMF 'suggestion', that they open up their economies to 'foreign direct investment', as Zimbabew did.

    You could conclude that the fact that their economies are domestically owned, is their greatest source of economic stability.

    No Cubans or Iranians will pick up their business or capital and move to Mexico. No foreign companies are exploiting Iran's oil.

    ReplyDelete
  15. First of all, "the highly destructive effects of the neoliberal policies I support" ? Once again and I hope it will be the last time. i don't "support" ideologies. I don't care much about the neo-liberal package and I don't care about the "alter-liberal" package. I think policies designed with ideological goals and not sound economics are bad. And yes that includes "lower the tarrifs" as much as "protect your local companies".



    Denial of a line of credit with international and multilateral organization is on the timid side of sanctions. Countries are denied credit by the IMF and the WB quite often and they don't collapse. They may suffer but they don't collapse. And there's quite a number of places that refuse that money and the strings attached to it and actually do quite well.

    As far as a comparison of the sanctions, go here:
    http://www.treas.gov/offices/enforcement/ofac/programs/index.shtml

    Cuba includes:
    a ban on exporting to Cuba
    a ban on importing from Cuba
    a ban on dealing with Cuba related goods, service, propriety
    a ban on trading with Cubans residing in Cuba
    a total freeze on Cuban asset, private and government.
    limits on travelling to Cuba
    a limit on sending gifts to Cuba
    a limit on money family members can send to Cuba

    And all that with the possibility of the US banning non-US companies that circumvene the embargo from doing business in the US.

    For Iran:
    Imports from Iran are limited to information, carpets, small gifts and food.
    A ban on exports or re-export to Iran
    A ban on dealing with financial institutions owned and controlled by the government
    A ban on dealing with Iranian petroleum assets.

    For Zimbabwe:
    A series of trade, travel, financial restriction for a list of Zimbabwe specially designated nationals. And I guess the WB/IMF/IDB thing.


    What this is supposed to tell you is that Zimbabwe must have been doing something very wrong independently of any sanctions for such collapse to happen.
    And Iran and Cuba both saw some of their citizen pick up their businesses and capital and move (to Miami, to LA, to Paris) and didn't collapse the way Zimbabwe did.


    You didn't type out that the sanctions were the sole cause but this is the first sentence of the first article you posted: NOTHING but the economic sanctions imposed on Zimbabwe by the Western world, with the complicity of the MDC, accounts for the economic decline that we have witnessed. If you disagree with it, then my bad. But still, the drying up of foreign aid is not supposed to cause drying up of foreign currency. Falling production, falling exports and liberal use of the printing presses are the single cause for the inflation.


    How does a neoliberal explain the presence of donor aid in Zambia's budget, when markets and the private sector are supposed to take care of everything, and the donor aid that is received comes from taxes raised in other countries?

    From my experience, they would say that it means the Zambian budget is too big and more cuts should be made.
    What I would say however, is that it does make sense to provide aid during a structural adjustment program. Especially one that consists of removing a bunch of distorting tarrifs, licenses, indirect taxes that are in our countries the only efficient form of taxation.


    And yes, how did donor aid make maize grow ?

    ReplyDelete
  16. More reaction later today/tomorrow, but for now, here is a description of the sanctions that exist against Zimbabwe.

    On the nature of Financial Sanctions, which are the main sanctions against Zimbabwe. This is a report that was published before the imposition of ZDERA in 2001. There is as frank admission that it is difficult to distinguish between financial sanctions and trade sanctions:

    The Adverse Consequences of Economic Sanctions on the Enjoyment of Human Rights
    Review of Further Developments in Fields with Which the Subcommission Has Been or May Be Concerned
    The Bossuyt Report
    Economic and Social Council
    E/CN.4/Sub.2/2000/33

    June 21, 2000

    Working paper prepared by Mr. Marc Bossuyt

    (b) Financial sanctions

    13. Financial sanctions address monetary issues. They can include, as has been addressed at the Interlaken Conferences,(5) blocking government assets held abroad, limiting access to financial markets and restricting loans and credits, restricting international transfer payments and restricting the sale and trade of property abroad. The freezing of development aid also falls into this category. Obviously, there is substantial overlap between financial and trade sanctions, especially when applied comprehensively, since with their foreign assets frozen and access to new funds blocked, Governments will be unable to pay for imports, and trade will suffer.



    This is a description of the renewal of financial sanctions against Zimbabwe:
    President Robert Mugabe and more than a hundred ministers and officials are included in the travel bans and freezing of assets.

    Of course, these financial sanctions are also trade sanctions, to the degree that official businesses are connected to any of these over 100 individuals. I don't know what percentage of Zimbabwean businesses are owned by people connected to ZANU-PF, but those businesses are definitely covered under these sanctions, making financial sanctions trade sanctions as well.

    From the Voice Of America, in November 2005:

    The United States is tightening financial sanctions against the government of Zimbabwe. President George W. Bush issued an executive order that will increase the number of individuals under sanctions, make it easier to target companies connected to government leaders; and give U.S. authorities the power to impose sanctions on the spouses and children of top Zimbabwean officials.

    ReplyDelete
  17. How does a neoliberal explain the presence of donor aid in Zambia's budget, when markets and the private sector are supposed to take care of everything, and the donor aid that is received comes from taxes raised in other countries?

    From my experience, they would say that it means the Zambian budget is too big and more cuts should be made.

    Although no one is addressing the real cause of both the size of the budget and the government, which is that there are

    1) Too many ministries (about 29)
    2) Too many political positions and overlap of ministerial functions
    3) Too much emphasis on central government over local government (which does not necessarily have to do with the size of the budget, but adds to waste at the ministerial level)

    What I would say however, is that it does make sense to provide aid during a structural adjustment program. Especially one that consists of removing a bunch of distorting tarrifs, licenses, indirect taxes that are in our countries the only efficient form of taxation.

    Aid has been going up, and not just during 'structural adjustment'. (And I'll leave the distorting effect of free trade zones and special treatment for foreign business on domestic businesses alone for this post.)

    However, that is sidestepping the main issue, which is this: how can a neoliberal, on ideological grounds, justify the presence of donor aid, 1/3 of the entire budget, when their professed ideology is that the markets and the private sector will take care of everything? Let alone justify, on ideological grounds, that this money is made up from taxpayer money, mainly taxes on business, from developed countries? Most donor aid is used for development, something the private sector would be financing in a free market. This is a real ideological slight of hand.

    And this goes to the heart of the matter. Neoliberals take infrastructure of all kinds for granted. And yet, they cannot run a government or a nation by leaving infrastructure creation or maintenance up to the private sector, because where it does, the country's infrastructure will completely collapse, and all commerce will end.

    ReplyDelete
  18. Although no one is addressing the real cause of both the size of the budget and the government, which is that there are 

1) Too many ministries (about 29) 
2) Too many political positions and overlap of ministerial functions
3) Too much emphasis on central government over local government (which does not necessarily have to do with the size of the budget, but adds to waste at the ministerial level)

    Oh but they do.. From Milton Friedman to Andrew Mwenda and Nicolas Sarkozy, they all complain about useless ministries and stuff.

    However, that is sidestepping the main issue, which is this: how can a neoliberal, on ideological grounds, justify the presence of donor aid, 1/3 of the entire budget, when their professed ideology is that the markets and the private sector will take care of everything? Let alone justify, on ideological grounds, that this money is made up from taxpayer money, mainly taxes on business, from developed countries?

    You should ask one !

    And this goes to the heart of the matter. Neoliberals take infrastructure of all kinds for granted. And yet, they cannot run a government or a nation by leaving infrastructure creation or maintenance up to the private sector, because where it does, the country's infrastructure will completely collapse, and all commerce will end.

    Hmmm.. In Africa, most of the infrastructure was built and for the most part mantain by the private sector. And actually, in many other parts of the world too before the Great Depression. Commerce didn't end, quite the contrary, but it wasn't pretty and ended up in the Great Depression.
    There's all sorts of alternative worlds one can imagine in which this or that is handled by this kind of entities or not. But what matters is the incentives and the decision-making.


    Of course, these financial sanctions are also trade sanctions, to the degree that official businesses are connected to any of these over 100 individuals. I don't know what percentage of Zimbabwean businesses are owned by people connected to ZANU-PF, but those businesses are definitely covered under these sanctions, making financial sanctions trade sanctions as well.

    And you are concerned about equality ? Lol.
    Isn't there something disturbing about a list of 100 people connected to a regime apparently owning a big chunk of the Zimbabwean economy ?


    As far as the current sanctions, the personnal assets of those 100 people are frozen. I fail to see how it translates into Zimbabwe's assets being frozen the way the assets of the government of Cuba and of ANY Cuban are frozen.
    Like I said before, Cuba and Iran have much tougher sanctions imposed on them. A ban on dealing with a 100 people and the companies they own is lighter than a ban on trading, investing, buying from a whole country and its inhabitants.

    ReplyDelete
  19. Hmmm.. In Africa, most of the infrastructure was built and for the most part mantain by the private sector.

    I am a little of two minds on the issue.

    The robber barons of the US did build railways, but they did so with to a great degree, government money and massive government support. And often as an extention of their government roles. :)

    Cecil Rhodes built railways and was head of the BSAC, but at the same time, he was able to do so because he was the governor of Capetown.

    So is that state or private? Certainly in his official capacity as governor, he was able to push his own business interests, and gather money by promising concessions in the conquered territories.

    Cornelius Vanderbilt, one of the original robber barons, was the director of the Long Island Railroad, which was purchased by the Pennsylvania Railroad, which was chartered by the Commonwealth of Pennsylvania as part of it's main line of public works. So there too, is a private individual, whose fortune has it's origins in a state initiative.

    However, I still have to see a public project that was built from strictly private money, for profit only (no concessions, no road tax, no government involvement at all). Just the legal side (if laws are observed at all) needs massive government input and goodwill. The state always has an interest in these major infrastructure projects.

    And, the private sector can only do these major projects in the presence of an already developed economy. If they are financed by issuing bonds, there has to be someone with enough capital to buy those bonds. There has to be a market with enough liquidity to trade those bonds. For instance, if someone wanted to create a $7 billion infrastructure project in Zambia, where would they get the money domestically, when the entire economy has a GDP of about $10 billion.

    Remember that America developed from agriculture, before it industrialized. The expansion into the west was based around agriculture and homesteaders as well as mining, although that was made possible to a great extent by the creation of railways.

    So you are sort of right that these individuals could be seen as private, but they had very strong ties to the government and the states of their day. And of course they are infamous for their disregard of the law. Rhodes used the army to conquer much of Africa (how many privately owned corporations can do that), and the robber barons rode roughshot over small time land owners, which made the acquisition of land for their railroads much easier, even possible. So their version of 'capitalism' would be illegal today. Also, many constitutions make it clear that it is the state, which can seize land for the purpose of railways and roads, so state cooperation is essential.

    Private or public - it's a tough call.

    And of course, state infrastructure projects are legion. The Hoover Dam, the

    Isn't there something disturbing about a list of 100 people connected to a regime apparently owning a big chunk of the Zimbabwean economy ?

    Yes there is - just as it is that so many politicians in Zambia own farms. And businesses.

    However, my point is that when most or just many established businesses are linked to government officials, these financial sanctions are in fact trade sanctions as well. The point made in the pre-2001 article I cited as well.

    Although no one is addressing the real cause of both the size of the budget and the government, which is that there are ??1) Too many ministries (about 29) ?2) Too many political positions and overlap of ministerial functions?3) Too much emphasis on central government over local government (which does not necessarily have to do with the size of the budget, but adds to waste at the ministerial level)

    Oh but they do.. From Milton Friedman to Andrew Mwenda and Nicolas Sarkozy, they all complain about useless ministries and stuff.


    But Friedman wants to see no government - I want to see efficient government and a prominent place for local government over central government.

    I think one reason the central government is so bloated, because it has taken on the role of local government, while seeing no fiscal transfer to local government (infamously, the ministry of local government receives more state funding that all local governments combined).

    I would like to see a fiscal transfer of at least 50% of national revenues to local government, and a reduction of the number of ministries from 29 to 10-12.

    ReplyDelete
  20. Just the legal side (if laws are observed at all) needs massive government input and goodwill. The state always has an interest in these major infrastructure projects.

    You're right on that.
    But the state has an interest in everything, really. Government input and goodwill are present through regulation and the provision of a general legal status (and subsidies/taxation), with the difference being that it's not done on a personnal basis.

    And, the private sector can only do these major projects in the presence of an already developed economy. If they are financed by issuing bonds, there has to be someone with enough capital to buy those bonds. There has to be a market with enough liquidity to trade those bonds. For instance, if someone wanted to create a $7 billion infrastructure project in Zambia, where would they get the money domestically, when the entire economy has a GDP of about $10 billion.

    Sure but that's why people think FDI is important. After all, much of the capital in America's industrialisation came from England and later by the mobilization of savings. And the "small market, no liquidity" issue is why government took out loans from outside with the consequences we know.

    But you know, it is interesting that you think that Zambia is not develloped enough to have private financing of infrastructure projects but think it's develloped enough to go on hi-tech or capital intensive indusrial ventures.

    Remember that America developed from agriculture, before it industrialized. The expansion into the west was based around agriculture and homesteaders as well as mining, although that was made possible to a great extent by the creation of railways.

    Oh I do. And I should add that the creation of railways was encouraged by agriculture and mining. Actually, mining and agriculture were the source as ocean shipping, canal construction, river shipping and everything around it were already well-develloped businesses.


    I think one reason the central government is so bloated, because it has taken on the role of local government, while seeing no fiscal transfer to local government (infamously, the ministry of local government receives more state funding that all local governments combined). 


    I still don't get what would be more inherently efficient about local governments. The only benefit is better responsiveness to local interests but that would mean less responsiveness to national interests, so there's no win. And as far as the rest, I can't see what would change by just transfering powers.

    The other bizzare thing is that you seem to imply that reducing the number of ministries and making transfers would save money. That I don't get at all. Transfering ressources and responsibilities to local governments would largelly offset the economies of scale possibly achieved by reducing the size of ministries. And that's assuming that the reduction of the number of ministries would really generate economies of scale.

    ReplyDelete
  21. I have to add:

    Private or public - it's a tough call.

    It's really a wrong call. I mean, the debate should not be about whether private or public entities should build or operate those but rather what set of incentives should be put in place.

    Think about how the rubber barons functionned. A government thinks that it would be a good thing to have a railway between 2 cities and in democraties, governments are very good at spoting such needs. But because governments aren't the most informed about technology, pricing, production methods and because governments don't have the same set of incentives they just charter a company, guarantee some eminent domain support or even some partial financing but that's it.
    The private people are there to make money. Not only they'll find money to finance their railroad but they'll keep trying to make money by buying new equipment, improving productivity, changing work tehcniques, hiring the best workers.

    At the end, the government did get a railway without having to micromanage it and get into the various issues most state-entreprises get into (political hiring, public service unions, bad pricing policy etc..)

    Of course it is possible to do all that and retain total public ownership but few governments have the strength to do so. Though there are historical examples.

    ReplyDelete

All contributors should follow the basic principles of a productive dialogue: communicate their perspective, ask, comment, respond,and share information and knowledge, but do all this with a positive approach.

This is a friendly website. However, if you feel compelled to comment 'anonymously', you are strongly encouraged to state your location / adopt a unique nick name so that other commentators/readers do not confuse your comments with other individuals also commenting anonymously.