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Wednesday, 10 November 2010

How the copper mines won, 4th Edition

click to enlarge
We continue the bi-monthly copper price check. The general upward trend towards the magic 10 continues. Readers are reminded that we have of course long breached the copper price level at which President Mwanawasa introduced the windfall tax (in January 2008). The windfall tax was designed to match rises in the price of copper: it was set at 25 % while copper sold for $2.50 per pound, 50 % for the next 50 cents and increased to 75 % when copper fetched above $3.50 per pound. You will see that throughout the last six months prices have remained consistently above $2.50 per pound and since September consistently above $3.50 - in short no more thresholds to break. It goes without saying, we would be laughing all the way to swifter poverty reduction had stuck at it. 


  1. Perhaps dr. Musokotwane can explain how we're better off now. Of course he did say that poverty would not significantly decrease for another 30 years.

  2. Yes, I saw his comments. He does not seem to realise that economics has moved on. I do hope people take his advice and go and look facts for themselves. They will find :

    1. The washington consensus failed as championed by MMD.

    2. The literature on FDI has moved on. We have presented paper after paper shocking that spillovers must be harnessed proactively, and that taxation is not a determinant for how FDI is located.

    3. Countries globally increasing taxation - plenty of evidence.

    4. They will read that on the importance of transforming the productive side of the economy - they will stumble on people like Chang, Rodrik and many others who see the strong role for government in the industrialisation process.

    5. They will hear about the importance of correcting externalities through passing on the costs to mining companies. They will learn that other governments are doing that.

    Many more lessons....

  3. Cho,

    2. The literature on FDI has moved on. We have presented paper after paper shocking that spillovers must be harnessed proactively, and that taxation is not a determinant for how FDI is located.

    I agree completely - in business you have to fight for every penny. The government isn't doing that in their privatisation process, or the way they approach FDI.

    However, even so, the economies of East Asia did not grow on spillover from FDI. They owned their own businesses.

    In fact, I think Zimbabwe today, with it's indigenisation process is a lot closer to how the Asian countries developed than Zambian government is. The nationalist leadership there insist on 51% local ownership of foreign enterprises, and they have the guts to stick with that, where these neoliberals don't even stick with the windfall tax.

    That puts the Zimbabwean development model a lot closer to Taiwan, Malaysia, let alone Japan, South Korea and China than the MMD is. The MMD is basically busy repackaging colonialism in the terminology of the Washington Consensus - 'Foreign Direct Investment' (meaning 100% foreign ownership of the economy), low inflation (meaning - no upward pressure from demand, in fact no increased demand for goods and services because of widespread and increasing poverty, even as the population grows), unlimited expatriation of capital and profits, and starving the government of wages.

    It is disappointing to see 51% ownership at all, but it is an obviously better alternative to privatisation.

    I saw a BBC interview with minister Kasukuwere, in which the female bbc 'reporter' had the gall to ask him - but who in Zimbabwe has the money to buy 51% of shares other than ZANU-PF? Obviously she never minded who would have the money to buy 100% of these businesses in Zimbabwe. She just assumed that the natural state of affairs in Africa is that whites would own everything.

  4. Also, the 51% indigenous ownership demand is in no way keeping foreign businesses away from Zimbabwe (another reason why Zimbabwe is such a dangerous example to the Washington Consensus).

    S/Korean firms seek investment opportunities in Zim
    By Kingsley Kaswende in Harare, Zimbabwe
    Fri 05 Nov. 2010, 04:00 CAT

    This is with the MMD defending any giveaway with the notion that we have to do this otherwise we will chase away investment.

  5. Hi Cho,

    Yes, I saw his comments.

    On a counterweight to neoliberalism and corporate globalisation, you are reading Roderik, but you should also take a look at Michael Parenti (Democracy For The Few). He is not an economist, but he has a pretty good take on what is wrong with the global economy and corporatism.

    Lies, War, and Empire - Part I
    Lies, War, and Empire - Part II

    From Amazon: Biography

    Michael Parenti (Berkeley, CA) is the acclaimed author of more than twenty books, including, most recently, Contrary Notions: The Michael Parenti Reader; The Assassination of Julius Caesar; and The Culture Struggle. The New York Times Book Review, the Washington Post, the New York Review of Books, Harper's, The Nation, and Antioch Review, are among the countless publications that have praised Parenti's work. For further information, visit his Web site:


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