In my earlier contribution to D. Punabantu’s analysis on monetary policy, which came out in your esteemed paper – I had alluded to a bi-partisan ‘think –tank’.
Messages and feedback seeking further clarification on the issue now inundate me. This barrage of responses, is probably prompted by president L.Mwanawasa’s proposal for the Zambian International Investments Advisory Council (ZIIAC), which has been called for Friday, September 6, 2003, in Livingstone. I have to clarify that I am not one of the framers of ZIIAC.
The idea I had in mind – when I talked about ‘think-tank’, is to put together, in the interim, a group of eminent Zambian professionals and technocrats, whose duty would be to provide guidance and advisory counsel to government. This group would be responsible for such matters as making decisions on economic policy, for instance. And would convene from time to time, to thrash out possible solutions to problems facing the nation. A crisis such as the current civil service strike, would be a good example. But national security matters would be outside its confluence.
In the long run, this ‘think-tank’ concept would develop into either, a full-fledged Institute or Foundation – much like Frazer Institute of Canada or Howe Foundation in U.S.A. Provided that such an organization is guided into a bi-partisan and impartial socio-economic body. A body which should survive the change of presidents.
Since, the principle function for such a ‘think-tank’ would be to advise government – technical reports based on sound professional analysis and research could be produced. These would be used as the main beacons for national decisions. As opposed to, as is now, relying on crisis management, which is quite often influenced by emotion, political slang, mimicry, personal ego or guess work. Quite clearly, this model is a major departure from the ZIIAC idea – which is purely a meetings-type.
President Mwanawasa’s ZIIAC, is probably a good idea, in an emergency, although at this point in time, nobody knows for sure its terms of reference; its existence duration; and composition. A quick random draw of participants, as it appears, particularly if a lot of those members are non-Zambian, wouldn’t in my view, produce the desired (people-centered) blue print. For usually, businessmen (especially foreigners)put their interests ahead of everyone else’s.
At face value, it (ZIIAC) sounds similar to KK’s inconsequential Presidential Council, which was just a cover up for President Kaunda’s one-person decisions. [Which was dictatorial in nature – namely, he chose the ideas which appealed to him, regardless]. There was no fuss, because at the time, Zambians were solidly united. And apparently, ZIIAC is a one-issue agenda Council – to promote investments. Not a bad idea – but what happens to other vexatious issues?
The role and mode of investments in Zambia are important – but I am not sure if one needs a “debating club” for that.
Decisions regarding investments are pretty clear and, for the most part, depend mostly on the economic policy a country adopts. We ought to be reminded here, that private capital – does not necessarily discriminate, and knows no boundaries. It flows to where it can earn an acceptable yield (in the eye of an investor) – even though at times, powerful Western governments attempt to influence its natural rate of drift. In other words, it is not shared at convened meetings. [So, unless those invited to Livingstone have personal fortunes to invest, it is highly doubtful if they can pose any major influence on private capital flows from their respective countries].
This means that – only ‘sexy-policies’, to use a popular jargon, are the ones, which can attract more private investments. Leadership personalities or styles may have some play – but very little. The premise being that, unless you’ve convincing investment strategies, no amount of advice can trigger positive capital flows to an African country.
Short of mini-Marshall plans, free distribution of investment capital from the West, cannot be expected – if investment strategies are blunt. Bi-lateral or multi-lateral allocations, are determined by pre-planned schemes or schedules. One explanation being that – politicians in rich countries, are now increasingly under pressure to balance their own budgets.
That’s why it becomes imperative for us (in Africa), to as often as possible, balance ours. We no longer have the two-super power rivalries to exploit. Therefore, after its deliberations, it is almost certain that ZIIAC will not come up with any new surprises – which suggests that its outcomes or usefulness could be limited. [Unless of course, the president’s intention is to use it for mediation purposes. In which case, its size and composition, is prohibitive]. I also suspect that, some of the conclusions expected, are given (or probably already known to BoZ or Min of Finance). Therefore then, why take a longer route?
We can predict with certainty that, ZIIAC will confirm – that in order to attract private investments to Zambia, or another developing country for that matter, the following conditions have to be met (basically items, which ought to be in party Manifestos):
First and foremost, a country has to have a well-articulated economic policy. One which must be congruent with vision, national goals, and strategic plans. A country needs to define investment incentives – which are usually: – tax holidays, easy and quick paper processing, Kwacha convertibility and exportability. Availability of cheap and/or semi to skilled workers. And, an environment of business-friendly regulations and laws – plus of course, the enforceability of them. [Here is where you need incorruptible & efficient civil servants and private sector workers. The focus of the New Deal government. Unless these major conditions are met (which I am sure the ZIIAC will also endorse), other suggestions would be just tinkering with the problem. Corollary, if they exist, then what’s happening? Is it then a question of implementation? We’ve to sort these things out before we embark on another roller coaster.
Examining the situation we are facing – our government needs to be reminded, that a National Strategic Plan is required because – first, the development resources available are, not only limited, but also are being controlled by non-Zambians.
Secondly, our economy is split into two segments. A wealth-creating part – which creates tradable goods, commodities, and services – that must compete in the world market place. For example, mineral production must be cost-effective. A Zambian software engineer has to be comparable to his Indian or Chinese counterpart. A finance analyst or banker must allocate loans, which are recoverable. Or that a Zambian peasant farmer must produce as much food as a Kenyan one – etc., etc. It is the responsibility of government to ensure that these conditions prevail.
Then you have – the consumption segment, which forms the rest of the economy. This is the largest part, which affects the majority of our people. It is also equally important because it generates demand for say, cars, housing, bicycles, retails sales (especially food), textiles, and public services such as health & education.
But this consumption sector is only useful – if someone is supplying it with disposable income (such as for ex. wages, housing allowances, welfare, pension, etc.). Indicating the importance of fair income distribution. [Hopefully, the anti-corruption agenda has this in mind].
But whenever you have an economy, which is not generating much wealth (the present state of affairs), then everything would have to depend on government handouts. Posing more responsibility for the government. The creativity in promoting economic growth (hence, wealth creation), and then balancing of the two segments – separates effective political parties (hence, governments) from unsuccessful ones.
This is the crux of the matter. We can’t afford to scuttle around it. We’ve to hold the bull by its horns.
Consequently, figuring out what and how economic activities should be conducted in each of the two segments, should be the main question before ZIIAC (or shall we say government). This is assuming that president Mwanawasa has now completely lost confidence in relying on advice coming from MMD functionaries.
Therefore, if president Mwanawasa’s Investment Council is to be useful at all – I repeat, it must configure, sort out, and plan what needs to be done for getting Zambia out of the economic quagmire. Otherwise, it would be a waste of time and money involving newcomer members of ZIIAC.
What matters most then, is for ZIIAC, or any other advisor for that matter – to have the ability to convince the New Deal government that: – it needs innovative ideas for the creation of wealth. Which in turn can generate jobs – rather than concentrating on a passion for hunting for stolen money, even though this is also an important priority.
The crusade to fight against corruption, important as it might be, should not be the preoccupation of the entire government machinery. Government must recognize that, there are other things to worry about – such as, combating HIV/AIDS or getting the country ready to face the knowledge-based economies of the world, and many others.
That change of attitude, on the part of the New Deal government, is part of the key for moving the economy forward. As these issues get increasingly complex and intertwined – that is why I’ve been suggesting, that we set up a Zambian controlled ‘think-tank’. Something, that the government can have at its disposal as a tool for tackling complicated national matters. This is just a synopsis, on my part; many other details could be explored later. As a patriot, this is a cost-free advice I am sharing with the public. God bless Zambia!