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Friday, 15 July 2011

What is wrong with Sanyikosa's answer?

5 comments:

  1. I don't think the Minister made a mistake.

    However, clearly the GDP/citizen ('the country's income') has nothing to do with personal income/citizen.

    However, it is good that reporters have caught on to the conceit of confusing 'the country's income' with 'the people's income', especially now so much of the mining sector is foreign owned, and is not forced to pay taxes or share profits through dividend payments on company shares.

    Correct collection of taxes and dividends would put $1.3 billion a year into the economy.

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  2. I.P.A. Manning (chosanganga)16 July 2011 at 08:47

    The estimates I have seen are $2.5 - 3 billion. Then to this you should add the cost to the nation, its environment and the health and livelihoods of its people - a simply staggering amount. Mining is a curse for Zambia as currently conducted - something unlikely to change without massive corrective measures.

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  3. IPA Manning,

    The estimates I have seen are $2.5 - 3 billion.

    I think that are profits, and total turnover according to the minister is $6.7 billion. Collecting 1.3 billion in revenues from 3 billion in profits is about right - although of course not as good as when the mines were still state owned.

    Then to this you should add the cost to the nation, its environment and the health and livelihoods of its people - a simply staggering amount.

    Absolutely. There is a massive externalisation of costs by the mining companies, from environmental pollution (destruction of the Commons), to infrastructure damage, to health damage and underpaying workers.

    Mining is a curse for Zambia as currently conducted - something unlikely to change without massive corrective measures.

    I agree. I don't like it when reporters say that mineral XYZ is 'a curse', because it always takes the attention away from the perpetrators.

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  4. If I have $100,000 and 99 other people have nothing, we have an average of $1000 each. I will be happy and the other 99 will be extremely unhappy. Especially if they are aware of how big the disparity is. Elections (if properly run) are done on the majority vote though, so a politician should be much more concerned about the median income (what a bigger number have) than the mean income (average).

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  5. R.Henson said,

    If I have $100,000 and 99 other people have nothing, we have an average of $1000 each. I will be happy and the other 99 will be extremely unhappy.

    According to the wonderful world of neoliberal economics, it 'doesn't matter' who owns the money, as long as someone does.

    Especially if they are aware of how big the disparity is. Elections (if properly run) are done on the majority vote though, so a politician should be much more concerned about the median income (what a bigger number have) than the mean income (average).

    The problem comes when the politician gets his or her money from somewhere far away, like donor aid, and doesn't want to levy taxes on GDP. You see as long as GDP is growing, 'the economy' is growing.

    The Zambian state is receiving donor aid instead of tax revenues, which means they pay attention to the donors, not the electorate. Except once every 5 years, of course.

    It is an old story - who pays the piper calls the tune. The same with campaign financing, which should be from public money. That way, when the politicians pay attention to those who are paying their salaries, they will pay attention to the people, not donors or the mines.

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