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Saturday, 21 August 2010

Quick notes

The 2010 State of the Union Africa report ssesses the continental performance of Member States against key governance and political policy standards / rights instruments over the period 2004-2009.

The Namibian Government,especially the Tender Board of Namibia, recently has come under fire on for their alleged bias for foreign companies over local ones.

The South African Government is refusing to allow South Africa's indigenous knowledge to be stolen and is taking measures to document the important information.

Mozambique's state fuel company has partnered with the private sector to invest US $19m in biofuel production. A minimum of 10,000 hectares will be cultivated at first, with possible expansion to 50,000 hectares later.

World Bank's Managing Director Ngozi Okonjo-Iweala makes the case for why sub-Saharan Africa is on the verge of joining the ranks of the BRICs.


  1. Hi Cho,

    The US has admitted that there are economic sanctions against Zimbabwe.

    Senator Jim Inhofe (R-Okla.) has introduced the Zimbabwe Sanctions Repeal Act of 2010.

    This act specifically intends to repeal the Zimbabwe Democracy and Economic Recovery Act of 2001, which froze the Zimbabwean government's lines of credit at international financial institutions, including the IMF. This is the event that precipitated hyperinflation in the very year ZDERA came into force - the year 2002.

    The Bush Administration in collaboration with the Blair government sought to extract punishment on the Zimbabwean government, for it's successful land reform program.

    If you look at Zimbabwe's economic indicators, you will see that land reform in 2000 did not collapse tobacco exports, and that in 2001, both tobacco exports and the trade surplus grew. It was only in the year 2002 that the rising trade surplus of previous years turned into an $18 million trade deficit.

    These economic sanctions against Zimbabwe were intended to make a successful land reform program impossible, and to collapse the Zimbabwean economy by collapsing the value of the Zimbabwean Dollar.

    This is how neocolonialism works. This was what Zambia had been threatened with if it would not enter multi-party elections in 1991, or privatize it's mines in 1999.

    This is how the theft of our resources works, and everyone needs to wake up to it.

  2. Here is the complete statement from Senator Inhofe's website:


    Contacts: Jared Young 202-224-5762
    Kathryn Junk 202-224-1282
    August 5, 2010

    WASHINGTON, D.C. – U.S. Sen. Jim Inhofe (R-Okla.), a member of the Senate Foreign Relations Committee, today introduced the Zimbabwe Sanctions Repeal Act of 2010. This new legislation will lift U.S. economic sanctions originally imposed on the African nation of Zimbabwe in 2001, and restore the country’s economy and aide in the nation’s transition to democracy.

    In 2001, economic sanctions were imposed against Zimbabwe as a result of President Robert Mugabe’s oppressive leadership and fiscally irresponsible programs that collapsed the economy.

    [Except that the economy did not collapse until the year 2002, months after ZDERA was introduced. - MrK]

    These sanctions specifically directed the U.S. to oppose and vote against any extension of loans, credit, or guarantees to the Government of Zimbabwe as well as any debt cancellation or reduction owed by the Government of Zimbabwe to the United States or any international financial institution.

    [A direct quote from Section 4C of the Zimbabwe Democracy and Economic Recovery Act of 2001 - Mrk]

    As a result of a 2008 power-sharing agreement engineered by the Southern African Development Community and the United States, Mugabe remains as President, but opposition leader Morgan Tsvangirai holds the post of Prime Minister. Under this new government, the Zimbabwe economy is starting to recover and democratic freedoms are reemerging. Repealing the 2001 sanctions will allow the Zimbabwe economy to recover fully and assist in its process of transition to democracy.

    “I am pleased that the African nation of Zimbabwe continues to recover under the new power-sharing leadership set by both the United States and the Southern African Development Community,” said Inhofe.

    “I commend the efforts of the power-sharing government there as they have reduced inflation and improved GDP and basic government services like medicine, education, and transportation. It is my hope that my legislation will help Zimbabwe return to being called the ‘Breadbasket of Africa’ and continue on the road to democracy.”


    Complete vindication. I have been saying for years that there are economic sanctions against Zimbabwe, and now a Republican senator introduces a bill with the word sanctions in the title, specifically to repeal ZDERA.

    The MDC have a lot of explaining to do, especially to the people of Zimbabwe, on how the economic sanctions against Zimbabwe which they have championed and drew up, were not 'targeted sanctions' and 'travel restrictions'.

    The MDC are liars. Everyone who bought into that party has been duped.

  3. Zambians agitated for a free and open society in 1990 on their own free will. It had nothing; completely nothing to do with the dictates of any outside forces. Please MK stop insulting the intelligence of Zambians. Zambians are mature enough to know when things are going wrong.

  4. Frank, please stop insulting my intelligence. :)

    In the very election year of 1991, the IMF stopped funding the government. Upto 1991, they had insisted on all kinds of conditionalities, that undid the achievements of Liberation, like universal healthcare and universal education.

    This is from Carol Graham, "Safety Nets, Politics and the Poor: Transitions to Market Economies", published by the rightwing Brookings Institution, and as such is of course blissfully blind to the electorally damaging effects of structural adjustment programs. In Zambia it led to a massive victory for the opposition, in Zimbabwe ESAP led to the foundation of the MDC.

    What she glosses over, is that these harsh policies weaken these governments, and not because of how they are carried out, in the eyes of their own people (SAP or ESAP is always hugely and predictably unpopular) and to see them overthrown by more pliant 'opposition' parties.

    May 1987 Kaunda announces suspension of IMF reform effort
    1988 Informal talks with the IMF and World Bank
    February 1990 Zambia reaches preliminary agreement with the IMF and World Bank
    September 1991 The IMF and World Bank suspend agreement in response to Zambia's failure to make payments in July

    (Sources: Joan M. Nelson, ed., "Economic Crisis and Policy Choice"; and Cherry Gertzel ed., "The Dynamics of One-Party State In Zambia."

    In July Zambia failed to make a US$20 million payment to the World Bank and the fund suspended scheduled disbursements in September 1991. At this point, even Zambia's most generous donors, the Scandinavians, were extremely reluctant to finance further operations. 30

    The Kaunda government was unable to stick to an adjustment program for a number of reasons. To begin with, UNIP's political base was eroding because opposition to the reforms was now building within the UNIP party and the government itself. Most UNIP members had little to gain from a program designed to eliminate a host of opportunities for rent-seeking. The privileges granted to nonpoor through generalized maize meal subsidies, housing subsidies, high civil service wages, and special prices on items such as maize and beer for the military certain unions gave several key interest groups a stake in the "system".

  5. The system also guaranteed universal free health care and education. 31 The perception that the program was being imposed from abroad and a lack of understanding of the measures within UNIP certainly helped to undermine the reform effort. The December 1986 riots, for example, strengthened the hand of the anti-IMF people in UNIP. This lack of understanding may explain why measures were often implemented at inopportune times, with little research into their short-term effects. To add to the problem, the government simply announced measures in the press as decrees, rather than explaining them to the public. The government's consistent failure to seek public consent for its policies also led to the considerable uncertainty within the private sector. 32

    This was the approach taken in the December 1986 maize price increases. The subsidy was removed from breakfast meal, the meal that the poorest buy. Yet the subsidies were still channeled through the millers after they had ground the maize. Since the millers had no confidence that they would be promptly reimbursed for the subsidized meal, they stopped production of roller meal and increased that of the more profitable breakfast meal. So almost overnight, no roller meal was available, and breakfast meal cost twice as much as before, a situation that was complicated by panic buying and shortages. 33

    Also contributing to the erosion of political and popular will, often called "adjustment fatigue", was the government lack of attention to poverty issues or to the equitable distribution of the burden of adjustment. 34

    The perception that the government is doing something to make the adjustment process less painful can generate important public support at a critical time, even if the public disapproves of the adjustment process per se. This was not the case in Zambia.35

    By the end of it's tenure, the UNIP regime was in such poor standing that no economic policy it implemented could inspire public confidence. "A key ingredient in the sustainability of reform is the government's credibility and the confidence that 'the economic policy makers know what they are doing.'"36 Nothing demonstrates the way UNIP had lost the public confidence as much as the 1991 elections.

    End quote.

    The year 1991, they moved onto Zimbabwe, where the same bad programs were tried out, with the same results. Resentment the imposition of ESAP from 1991 to 1996 led to the creation of the MDC. Check out: The Tragic Tale of the IMF in Zimbabwe
    by Antonia Juhasz, The Daily Mirror of Zimbabwe
    March 7th, 2004

  6. MK, It is the mismanaged countries that seek out the help of the IMF. Kaunda and his pseudo socialists went to the IMF; the IMF never invited themselves to help Kaunda. The UK was also badly mismanaged in the 1970s and had to accept the tutelage of the IMF. Today it is countries like Romania and Greece. My dear there is no conspiracy. What the IMF doesnt want is to lend to a country that continues to do the same things that put it into a hole in the first place!

    Mk you and the other pseudo pan Africanists and pseudo socialists should learn to take ownership of your own policies and actions and desist from placing blame on outsiders when things go wrong.
    The problem of Food subsidies was Kaunda's own making. Kenya, Tanzania Ghana, Malawi and Ivory Coast never subsidised their staple foods and they had no problems with it. They focused instead on both food and cash crop production without subsidising the consumer as a policy choice. What stopped Kaunda from following their example? The problem with Kaunda is that he premised the prosperity of Zambia on copper which was supposed to pay for everything including food. Alas the chickens came home to roost. In tandem with the mismanagement of the Agriculture sector Kaunda also mismanaged the goose (copper sector)that was supposed to lay the golden egg subsequently bankrupting the country. Honestly, people had had enough of him with or without the IMF! 27 years of Kaunda's incompetence is what convinced Zambians that it was time for change. MK it seems if you had a choice; Zambia should have been a 'socialist One Party' dictatorship alongside your beloved Zimbabwe!

  7. Frank,

    It is MrK, not MK, there is someone else using those initials at

    Secondly, end the name calling. They only highlight that you have no actual point to make.

    Without the liberation movements, there would not have been generations who have been educated by the state. Usually, it are the same people who now have the literary skills to denounce 'socialism'.

    When the MMD came to power in 1991, the Kwacha was 113 to the US dollar. Today, it is 6,000 to the US dollar.

    So much for socialist 'mismanagement'. You want to dismiss the influence of IMF conditionalities on the economic situation in Zambia or Zimbabwe. That's cowardice. Face up to the disastrous economic effects of Structural Adjustment, and we can have an honest discussion.

    The old canard that only 'countries in trouble' look toward help from the IMF is a truism. However, you need to own up the the disastrous nature of IMF conditionalities themselves, and the fact that there is no country where they resulted in a healthier economy.

    In fact, across South America, people are turning away from the IMF neoliberal economic ideology, and are using their natural resources to build their infrastructure and build social capital by providing universal healthcare and education.

    And they are not dumb enough to tell their own people that getting foreign corporations to do business in their country means 'development'.

    It isn't 'socialism' that has failed, it is neoliberalism that has failed, and fails over and over again.

    When the MMD and other neoliberals attract 'foreign investment', they are actually expatriating a multiple of what these companies 'bring'. So when they have nothing to show for it, in the form of higher revenues or even shared profits, they say 'well they bring jobs'. No one is supposed to notice that the fact that those jobs are way below not only minimum wage, but way below a living wage. That they are free to casualize to the maximum, and when even that is too expensive, they start importing foreign labour.

    It are only nationalists like UNIP and ZANU-PF that fight for the rights of their own people. Neoliberals have bought into the idea that you can have an economic elite that is divorced from the people of the country culturally, economically, even physically, and have a functioning and healthy economy. They do not believe that a function economy needs to include the people of the country.

    And they have failed, and will fail, because their ideology is selfserving garbage.

  8. Mk
    At what point do countries go to seek the help of the IMF? Isnt it at the point when they have run their own economies down? If you do not want IMF conditionalities dont screw your economy. Simple!
    My belief in liberalism does not denote support for the MMD. The MMD are reckless and incompetent economic managers.The privatisation process I believe should have been done differently within a liberal arrangement. It is possible to be 'nationalistic'within a liberal arrangement. For example the govt should have only sold 55% shareholding to foreign entities in the various divisions of ZCCM. The remainder 45% should have been split as follows ZCCM 20% and 25% offloaded on LUSE. The same formula should have been used for companies like Zambia Sugar and Chilanga cement. Compare Zambia Sugar and Sucoma (Malawi). Zambia sold 90% to Illovo and offloaded only 10% on Luse. Malawi sold 55% to Illovo and retained 45% to be traded within Malawi. You can also compare Lafarge shareholding in Zambia and Tanzania. In Malawi and Tanzania the govts acted in the best interests of their citizens within the context of a liberal formula. You can make liberalism work for your country. It is not a question of either liberalism or static socialism.

    It is the same with taxation. Countries like Chile and Australia are getting more tax from their mineral resources compare to Zambia. From an annual copper turnover of $4bn Chile gets back about a quarter ($1bn) of that amount in taxes and royalties while Zambia gets back a paltry $77m. It will be wrong to blame this on liberalism. The blame lies squarely with the daft and corrupt people running the govt. There is nothing better than economic liberalism. Even the Chinese understand stand this.


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