Every time I analyze a statement in the press made by a Zambian public figure, I always factor in errors by the scribe. Any literally piece put out is laced with a high dose of subjectivity. Even when one tries to reproduce a statement word for word, the possibility that the scribe edited out some parts that they thought were irrelevant, or an idea not properly articulated, is high. In essence, any reported item is subject to "the power of the pen." This as true in Zambia as is in America.
The article below is the best example of the obvious distortion of information by the reporter. I have dissected Kombe Chimpinde's article to show how long he'd been out to lunch. Read on...
UPND has not run out of options to win in 2011 - Mweetwa
By Kombe Chimpinde
Fri 24 Sep. 2010, 17:50
THE UPND has said that it has not run out of options to win the 2011 elections.
And the UPND has complained that they have sacrificed enough including Namwala member of parliament major Robby Chizyuka because of their commitment to the Pact.
Speaking when he featured on 'People’s Last Say' programme on QFM radio last night UPND deputy spokesperson Cornelius Mweetwa accused its partner the Patriotic Front (PF) of not being committed to the Pact that has been on the agenda of Zambians.
The foregoing paragraph is reporter Chimpinde's take on what Mweetwa said. It is supposed to be very clear in its construction. But as any language teacher would observe, it is long, winding, and poorly punctuated. I am not a language expert myself but I am always a sucker for a well written article. The italicized part of Chimpinde's sentence is likely to lead a reader to thinking Mweetwa is an object or is the partner of PF. A rational thinker would, however, know that UPND deputy spokes person Cornelius Mweetwa is not an object. Therefore the use of the word its in the sentence is a distortion. It may not be intentional but the totality of the errors in the opening paragraph reflects possible thinking impairment in the writer.
“What is happening in the Pact is not actually indisciplined. I think its lack of commitment within the Pact. I am saying this because indiscipline is when someone in the political circles is contrary to the party's position. When you walk out alone and say as far as am concerned I stand for something that is contrary to the party's position then you are said to be indisciplined. This we did in UPND when we expelled Namwala MP Major Chizyuka because he was taking a stance that was contrary to the party's,” he said.
In the above paragraph, I am assuming Chimpinde is transcribing the voice of Mweetwa on some contraption of some sort. I understand Mweetwa may have said "indisciplined," in place of "indiscipline," may not have used proper syntax when making his comments, but I think Chimpinde had time to insert proper punctuations in the sentence. I mean when you quote someone quoting someone else, you need to use appropriate punctuations to mark the beginning and end of the second quote. On this one, Chimpinde had been out to lunch for too long!
Mweetwa said that UPND expelled Chizyuka just to demonstrate their commitment to the Pact.
It is not clear whether it was Chimpinde's idea to use the wordjust or it was actually Mweetwa's. The use of the word "just" projects the simplicity of thought of the UPND party as a collective. Whether this was intentional on the part of Chimpinde or it was indeed Mweetwa's best choice of words, I am not sure. However, reading it the way it is written, I am made to think that the UPND departed from principle when it expelled its member just to demonstrate its commitment to the Pact. Such an action, in my view, is irrational.
“We had to lose an MP because we knew we were concentrating on a bigger picture, the Pact, because that’s what the people of Zambia want. We had to expel a member of parliament on that score now when people say Gary Nkombo is indisciplined he is a member of parliament and chairperson for energy in the UPND,” he said.
Once again, Chimpinde did a poor job reporting a spoken word. Chimpinde could have cut the sentences short to elevate the degree of clarity. This is because the use of the word because in the same sentence is permissible in speech but not in written.
“He was speaking as a member of the working group and in this particular meeting that took place that sanctioned PF's stand in Mpulungu and Chilanga to be contested by UPND. Gary was the secretary who was taking minutes of what was discussed.”
Chimpinde! This is not acceptable! Lunch hour ended yesterday.
He said it was astonishing to learn that PF general secretary, Wynter Kabimba, who was a senior party official in PF could come out and contradict the agreement s made at the meeting.
“...its lack of commitment because from what the general secretary of PF has said he has gotten full coverage and backing of his President Mr Micheal Sata in The Post and on Joy FM this morning. He (Sata) has covered him 100 per cent. He has also insisted that he (Wynter) is the voice for the central committee of PF, he has also joined in saying the working group is a smaller body and the decisions of working group. So now a senior party official getting the coverage of the president.”
What did Mweetwa say? What did Kabimba say? What did Sata say? And what did you, Chimpinde, hear?
He said the only explanation to PF’s behaviour was that there was no commitment on their part.
“...today PF has changed the stance cause the stance cause in the post Wynter Kabimba has said HH should forget about been President for the pact and on the other side on the radio and in the paper Mr Sata is saying Wynter Kabimba is the voice of the PF Central Committee which they have portrayed as been sovereign and beyond reproach they are a supreme beyond the working group or any marriage with UPND.”
I am going to assume, Chimpinde is a student on internship from a local college of journalism. This is not the way to write! Working with my assumption, I am going to place blame on the editor (of whatever prefix fits the job of looking through articles of interns before they are published). My question to the editor is, What the heck happened? Look at this paragraph! You can't let such poor pieces be put through for publication.
He further accused the PF leaders of not being sincere by indicating that Sata was ready to work under Hichilema.
There goes Chimpinde again. By stating that Sata was ready to work under Hichilema contradicts the insincerity that you are claiming Mweetwa had accused Sata of. Is it possible that you are distorting what Mweetwa said?
“So his voice is sanctified, it is a pure position of PF. So for the PF to insist that the two leaders have agreed to work under each other is not true, only HH has said he is willing to work under Mr Sata, and I heard myself,” he said.
Editor, don't you find this confusing
“So it no longer applies that Mr Sata is willing to be a vice-president to HH. The wrangle has nothing to do with HH, it has something to do with the working group and the failure of organisational consistency,” he said.
It could have sounded better had you, Chimpinde, inserted the word "its" in place of "the," between the words "and" and "failure." I did not mean to confuse the reader further. But the last part of the sentence should have read, "...working group and its failure to maintain organizational consistency." I will let you off on this because it may very well be what Mweetwa had said. But based on what I have observed so far, I cannot be sure.
He said PF was defending people who thought that each time they went to a meeting they got a fresh mandate.
“They failed to send people to this group who have to talk about Chilanga. The wrangle is about Chilanga but look in The Post and how Kabimba has gone far to disparage HH saying that HH should not think he will just walk into the PF -UPND Pact and take over the presidency the same way he walked in and become president for UDA( United Democratic Alliance.”
All Chimpinde needed to do here is apply proper punctuation and the reader would follow with great ease.
He said people should learn to put certain things in the past.
“HH will become president of this country one day which I believe he will, it will not be as a result of the wishes of Wynter Kabimba, neither will it be a wish of Mr Micheal Sata. It will be the wish of the people of Zambia who vote,” he said.
“... and people in Zambia in 2006 had indicated that they were willing to vote for HH, so there is nothing wrong with thinking that come 2011 actually many people who had promised to vote for HH will.”
I give credit where credit is due. This is a teaching moment for me. That is how you quote somebody, Chimpinde. Good job!
Mweetwa, however, said that it was possible for the two parties to produce one presidential candidate if they remained committed to the Pact.
“It is possible to produce one presidential candidate under the umbrella of the Pact but for us UPND we have not yet run out of options and ideas of our future and it is clear and bright.We are willing to contribute positively to ensure we bring about change,” said Mweetwa.
Apply proper punctuations, Chimpinde!
And during the same programme, Munali PF member of parliament Mumbi Phiri called in and maintained that it was impossible for individual parties to remove the MMD government.
“I am speaking as Munali MP representing the people of Munali. I can assure you that the Pact is not going to break. Those in the Pact that think they can go and stand alone are joking,” she said.
Phiri said she was hopeful that the Pact was going to hold and that only an insane person could think that either parties could go it alone.
“Let us keep praying am a woman of faith who believes in prayer and you know in a marriage they say a marriage that is criticised in the beginning comes out to be strong. I believe the UPND -PF Pact is going to stand until 2011 and that’s my prayer and I will not stop kneeling until this Pact works so that we can liberate this country. People are sleeping hungry, women are being raped, people are being killed. Can you imagine now corruption has even entered the mortuary.question mark here would have been better Where are we going as a nation?” she asked.
There is something seriously wrong with the first two sentences in the above paragraph; it distorts what is being said, not because of what is being said or how it is said, but how it is reported
“This country is not going anywhere so those who are joking let us get serious. I don’t think any sensible person can want to break the Pact and go it alone unless you are insane.”
I have always argued that that words are symbols of our thoughts. One can use different symbols to represent one's thoughts as long as one understands what those symbols mean. The variation of symbols is synonymous with language. It is clear that Chimpinde's mastery of the language he is using to report what he heard, or lack of it, is introducing distortions into the report. It is easy for an irrational reader to get inaccurate information from an article characterized by so much errors. Whether it is intentional or not, the mountain of evidence against the reporter suggests that he may be a major contributing factor to misinformation.
Such a poor piece of literally work emanate from many sources but a rational thinker. I therefore confer upon Kombe Chimpinde the Irrational Thinker of the Week Award.
Saturday, September 25, 2010
Thursday, September 23, 2010
Lying: Intentional or Ignorance?
Stop using maths to hoodwink Zambians that economy is improving – Mambo
By Kombe Chimpinde
Fri 24 Sep. 2010, 04:01
FORMER Church of God overseer Bishop John Mambo yesterday told the MMD to stop playing with maths and figures to hoodwink the people of Zambia that the economy is improving.
And Bishop Mambo has predicted another constitution review after a change of government next year.
In an interview Bishop Mambo said that it was absurd for the MMD government to say the economy had greatly improved under the leadership of President Banda when poverty levels had still remained very high.
“Poverty levels in the country are still very high even if we are talking about our economy picking up. I have a foundation called Chikondi Rural Foundation and when you visit the area it is clear that the majority of our people in the rural areas only have one meal a day. You can't say that we are governing peacefully because of the fear of God. Governing people who cannot have a day’s meal?” Bishop Mambo questioned.
He has since challenged the young generation to mobilize and stand up for their rights.
“A hungry stomach will always be corrupt. The high levels of corruption are as result of rampant poverty, so we must fight corruption by first trying to fight poverty. And since we were bold enough to declare ourselves as a Christian nation why is government failing to put bread on people's tables, and you the young generation can't even put your act together and say enough is enough it is time we change,” he challenged.
“Zambia is a beautiful country but we are destroying it because these people (MMD government) who are currently there are not there to serve, you can even tell. It is just, ‘how much I will make' so if we are not going to remove this scenario of politics being for income, then we are in trouble.”
Bishop Mambo asked President Banda to take a leaf from the Libyan administration when claiming success. He cited Libya's economy stressing that the people of Libya were happy with the developments because there was a match in pronouncements of the governments and the reality on the ground.
“If you go to Libya people are happy that’s why (Colonel Muammar) Gaddafi has been there for a long time, you understand the growth that we are talking about. Not growth where the rich are becoming filthy rich and the poor, poorer. Here in Zambia we will not accept that the economy is improving when the amount of interest rates for you to borrow money to start a business is still very high,” he said
“I am not an economist but I know money. When the country is doing well, one can go to bank and borrow money at a low cost but the gap between the poor and rich continues to widen...I think we shouldn't play maths and that’s what they (MMD) are doing because in terms of the economy only when the majority have food on the table can we say there is economic growth. Until we say that voters in Kanyama, Mandevu and so forth eat, then we can say the economy is growing. This is why the Catholics are saying that people want a regime change. Us evangelicals, we say this is a Christian nation but Christians must fight for the poor and ensure that they have food on their tables which most churches are not doing.”
Bishop Mambo hailed the Catholic bishops for speaking out for the people and stated that they were talking about reality on the ground and that it was important that this government listens to them.
“If you are going to convince me that the economy is doing well there has to be a generation of decent employment for the graduate from university, don't talk about six per cent. What growth? It must be matched with what is going on the ground,” he said.
People must not be swayed to vote for the government when a road has been built in an area prior elections. This is the situation. We are going to see a lot of activity because we are heading to elections. Money is already flying around. This is why there is need to sensitize people because people don't know their rights. When the government builds roads prior to elections they (people) are saying we will vote for them because they have built us a road. But that’s their right. Thats the obligation of government.”
He said that there was need for Zambians to change their mindsets so as not to fall into traps meant to gunner support for the government.
“It’s important that we go back to 1991 when we stood and said; ‘Kaunda that’s enough, we want change’. Change must be there. However, it must be peaceful change. If the current President will continue showing us that he can’t serve the people of Zambia then we need change,” he said.
“They must listen to criticism. People are tired of this kind of leadership were people have made themselves kings that they cannot listen to people. Leadership is not about reacting to people.”
Commenting on President Banda’s silence on the National Constitutional Conference (NCC) in his speech to Parliament, Bishop Mambo said no president was going to rule with a clear mandate without having addressed the desperation of people expressed in the Mung'omba Constitutional Review process.
He observed that the desire by Zambians to have a Constitution before 2011 had been hijacked by the MMD government.
“It was the desire of many Zambians to go to the 2011 elections with a new constitution but I don't see it happening. They have applied brakes because they want the document to suit their desires. The President and his Cabinet know that the document that will come out will not be accepted by the majority of the people. Again this is what we call playing with time and money ,” he said.
Bishop Mambo observed that this was why those people who were supposed to be at the core of the process have been left out from the process.
“Whether we go for it or not we will still have, and am not a prophet, a change of government outside the MMD. We will go back go to the drawing board, the reason being that no President will rule with a clear mandate without having addressed the desperation of many people who submitted for fifty-plus one we know its costly but we don't want a minority president,” he said.
“…now this is not the start, we have had a number of documents that are gathering dust now a mountain from the late Mainza Chona, Mvunga, we went to the late Mwanakatwe who resisted to take up the position because he did not want lies to be told and finally Willa Mung'omba who for three years NCC was seating they never consulted him. So now, how smart is Chifumu Banda and his team?” he questioned.
Bishop Mambo has since charged that the process was not helping the country in any way.
The National Constitution Conference in August handed the draft constitution and report to the government although there has been no direction given on the future of the document.
There has, however, been repeated calls from Zambians to government on the need for a new constitution before the country goes to the polls next year.
The Post
By Kombe Chimpinde
Fri 24 Sep. 2010, 04:01
FORMER Church of God overseer Bishop John Mambo yesterday told the MMD to stop playing with maths and figures to hoodwink the people of Zambia that the economy is improving.
And Bishop Mambo has predicted another constitution review after a change of government next year.
In an interview Bishop Mambo said that it was absurd for the MMD government to say the economy had greatly improved under the leadership of President Banda when poverty levels had still remained very high.
“Poverty levels in the country are still very high even if we are talking about our economy picking up. I have a foundation called Chikondi Rural Foundation and when you visit the area it is clear that the majority of our people in the rural areas only have one meal a day. You can't say that we are governing peacefully because of the fear of God. Governing people who cannot have a day’s meal?” Bishop Mambo questioned.
He has since challenged the young generation to mobilize and stand up for their rights.
“A hungry stomach will always be corrupt. The high levels of corruption are as result of rampant poverty, so we must fight corruption by first trying to fight poverty. And since we were bold enough to declare ourselves as a Christian nation why is government failing to put bread on people's tables, and you the young generation can't even put your act together and say enough is enough it is time we change,” he challenged.
“Zambia is a beautiful country but we are destroying it because these people (MMD government) who are currently there are not there to serve, you can even tell. It is just, ‘how much I will make' so if we are not going to remove this scenario of politics being for income, then we are in trouble.”
Bishop Mambo asked President Banda to take a leaf from the Libyan administration when claiming success. He cited Libya's economy stressing that the people of Libya were happy with the developments because there was a match in pronouncements of the governments and the reality on the ground.
“If you go to Libya people are happy that’s why (Colonel Muammar) Gaddafi has been there for a long time, you understand the growth that we are talking about. Not growth where the rich are becoming filthy rich and the poor, poorer. Here in Zambia we will not accept that the economy is improving when the amount of interest rates for you to borrow money to start a business is still very high,” he said
“I am not an economist but I know money. When the country is doing well, one can go to bank and borrow money at a low cost but the gap between the poor and rich continues to widen...I think we shouldn't play maths and that’s what they (MMD) are doing because in terms of the economy only when the majority have food on the table can we say there is economic growth. Until we say that voters in Kanyama, Mandevu and so forth eat, then we can say the economy is growing. This is why the Catholics are saying that people want a regime change. Us evangelicals, we say this is a Christian nation but Christians must fight for the poor and ensure that they have food on their tables which most churches are not doing.”
Bishop Mambo hailed the Catholic bishops for speaking out for the people and stated that they were talking about reality on the ground and that it was important that this government listens to them.
“If you are going to convince me that the economy is doing well there has to be a generation of decent employment for the graduate from university, don't talk about six per cent. What growth? It must be matched with what is going on the ground,” he said.
People must not be swayed to vote for the government when a road has been built in an area prior elections. This is the situation. We are going to see a lot of activity because we are heading to elections. Money is already flying around. This is why there is need to sensitize people because people don't know their rights. When the government builds roads prior to elections they (people) are saying we will vote for them because they have built us a road. But that’s their right. Thats the obligation of government.”
He said that there was need for Zambians to change their mindsets so as not to fall into traps meant to gunner support for the government.
“It’s important that we go back to 1991 when we stood and said; ‘Kaunda that’s enough, we want change’. Change must be there. However, it must be peaceful change. If the current President will continue showing us that he can’t serve the people of Zambia then we need change,” he said.
“They must listen to criticism. People are tired of this kind of leadership were people have made themselves kings that they cannot listen to people. Leadership is not about reacting to people.”
Commenting on President Banda’s silence on the National Constitutional Conference (NCC) in his speech to Parliament, Bishop Mambo said no president was going to rule with a clear mandate without having addressed the desperation of people expressed in the Mung'omba Constitutional Review process.
He observed that the desire by Zambians to have a Constitution before 2011 had been hijacked by the MMD government.
“It was the desire of many Zambians to go to the 2011 elections with a new constitution but I don't see it happening. They have applied brakes because they want the document to suit their desires. The President and his Cabinet know that the document that will come out will not be accepted by the majority of the people. Again this is what we call playing with time and money ,” he said.
Bishop Mambo observed that this was why those people who were supposed to be at the core of the process have been left out from the process.
“Whether we go for it or not we will still have, and am not a prophet, a change of government outside the MMD. We will go back go to the drawing board, the reason being that no President will rule with a clear mandate without having addressed the desperation of many people who submitted for fifty-plus one we know its costly but we don't want a minority president,” he said.
“…now this is not the start, we have had a number of documents that are gathering dust now a mountain from the late Mainza Chona, Mvunga, we went to the late Mwanakatwe who resisted to take up the position because he did not want lies to be told and finally Willa Mung'omba who for three years NCC was seating they never consulted him. So now, how smart is Chifumu Banda and his team?” he questioned.
Bishop Mambo has since charged that the process was not helping the country in any way.
The National Constitution Conference in August handed the draft constitution and report to the government although there has been no direction given on the future of the document.
There has, however, been repeated calls from Zambians to government on the need for a new constitution before the country goes to the polls next year.
The Post
Tuesday, September 21, 2010
Does Zambia Have Mechanisms to Implement Fiscal and Monetary Policies?
The management of a structured economy depends, to a great extent, on the ability of both the administration and the central bank to formulate policies that affect unemployment, inflation, and and growth. In this short discussion, by unemployment I am referring to the proportion of the labor force that is unemployed. And for simplicity sake, inflation here means the increase in the general price level. As for growth, I have adopted the textbook definition of GDP which is the value of all finish products produced in a given year within an economy. I am not going to waste time discussing GNP for reason that will soon become apparent.
To influence the rate of unemployment which is normally caused by factors such as fluctuation of business cycle (cyclical), people changing jobs (frictional), pool of skilled manpower not keeping up with the demand for new skills in the labor market (structural)both the administration and the Central bank have to have mechanisms which only they can manipulate. For instance the administration can pour money into the economy through implementation of planned infrastructural development projects. The central bank would augment the administration's effort by lowering interest rates so business can borrow to purchase equipment, expand their production capacity. These two efforts if implemented in a measured and coordinated way, can create new jobs and lower the rate of unemployment.
Let's not forget that the secondary effects of these actions is the powerful undercurrent of the multiplier effect. They cause ripple effects as funds cycle through the markets creation of more money.
I have no doubt in my mind that the Zambian administration does pour huge funds into the infrastructural development projects. The question I have is, how does it measure the impact of its actions? How does it know that the rate of unemployment is being impacted by it actions and to what extent?
These are simple questions but they can be difficult to provide good responses to when the administration does not have a decent mechanism in place to associate facts together. The administration needs to know the baseline rate of unemployment first and then measure the change immediately the project has commenced.
To influence the rate of inflation, the administration can work together with the the central bank to reduce the volume of cash in circulation. This can be accomplished by selling financial instruments issued by the government. The central bank can do even more by increasing the interest rates. Both the selling of financial instruments and increasing premium rates give an incentive for people and businesses to put their money in the bank. However, such an approach would work well when the population has a culture of saving. Zambia has instead a consuming culture. In addition, the interest rates are always high. There may be a good reason for high loan rates and I intend to explore that in another piece. What is of interest at this time is to identify the mechanism the administration uses to influence inflation and how it measure the impact.
Again there is no doubt in my mind that the government sells bonds. The question is, to whom? Another pertinent question at this point would be, does the central bank have the power to increase or lower interest rates? If it does, how does it exercise that power?
Economic growth can benefit from all the above actions, assuming all the actions are done in a thoughtful, intentional and coordinated manner. However, institutional mechanisms have to be in place. The administration can augment the efforts by acting as a consumer in the products market. we all know that the government consumes just about anything one can think of. And once it does, it stimulates a chain of activities in the economy which has a positive effect on unemployment.
In view of the interdependence of the factors at the disposal of the central bank and the administration, measuring the effects of each action and predicting the extent of the impact on the fringes of the economy makes it look complex but in actual fact its very easy. The complexity is diminishes with the clear definition of and institutionalization of the mechanisms that the administration and the central bank can use.
When both the administration and the central bank begin to describe an increase in the production of raw copper and high corn harvest as increase in GDP, one wonders whether the country has the right set of eyes reading the economic indicators. I should not have to say it but copper cathodes and corn are intermediate products. In fact in the strictest of sense, they are raw materials. In their state, they should be excluded from GDP computation.
Excluding copper and corn from computation of GDP leaves us with absolutely no fundamentals to work with to determine the performance of the Zambian economy at any one given point. I think this is true because, as difficult as it is for the government to measure unemployment and the effects of its attempts to reduce the rate, it is even more difficult for the government to measure the incomes that were earned by households in the resource market. Assuming a close, two sector economy, the value incomes earned should give a suggestion of the value of all finished products produced in the Zambian economy in a given year which was bought by the Zambian consumers. Does Zambia have the mechanism in place to monitor retail sales? Who is capturing these data and how are they stored?
If it hard to compute GDP using such simplified approach, it is even harder to compute GNP. To start with, most of the manufacturing industries in Zambia are owned by foreigners. The proportion of what they produce has to be subtracted from the computation as we add the production of assets owned by Zambians abroad. I would be hard pressed to find Zambian nationals with assets worth writing home about reporting their earning to Zambia Revenue Authority on a regular basis. Or are there?
How then do we know the status and condition of the Zambian economy when there are no formal mechanisms in place to collect reliable data? Are these mechanism important? Howe difficult are they to set up?
Of course I am assuming that they are absent. If anyone knows better, please educate me.
To influence the rate of unemployment which is normally caused by factors such as fluctuation of business cycle (cyclical), people changing jobs (frictional), pool of skilled manpower not keeping up with the demand for new skills in the labor market (structural)both the administration and the Central bank have to have mechanisms which only they can manipulate. For instance the administration can pour money into the economy through implementation of planned infrastructural development projects. The central bank would augment the administration's effort by lowering interest rates so business can borrow to purchase equipment, expand their production capacity. These two efforts if implemented in a measured and coordinated way, can create new jobs and lower the rate of unemployment.
Let's not forget that the secondary effects of these actions is the powerful undercurrent of the multiplier effect. They cause ripple effects as funds cycle through the markets creation of more money.
I have no doubt in my mind that the Zambian administration does pour huge funds into the infrastructural development projects. The question I have is, how does it measure the impact of its actions? How does it know that the rate of unemployment is being impacted by it actions and to what extent?
These are simple questions but they can be difficult to provide good responses to when the administration does not have a decent mechanism in place to associate facts together. The administration needs to know the baseline rate of unemployment first and then measure the change immediately the project has commenced.
To influence the rate of inflation, the administration can work together with the the central bank to reduce the volume of cash in circulation. This can be accomplished by selling financial instruments issued by the government. The central bank can do even more by increasing the interest rates. Both the selling of financial instruments and increasing premium rates give an incentive for people and businesses to put their money in the bank. However, such an approach would work well when the population has a culture of saving. Zambia has instead a consuming culture. In addition, the interest rates are always high. There may be a good reason for high loan rates and I intend to explore that in another piece. What is of interest at this time is to identify the mechanism the administration uses to influence inflation and how it measure the impact.
Again there is no doubt in my mind that the government sells bonds. The question is, to whom? Another pertinent question at this point would be, does the central bank have the power to increase or lower interest rates? If it does, how does it exercise that power?
Economic growth can benefit from all the above actions, assuming all the actions are done in a thoughtful, intentional and coordinated manner. However, institutional mechanisms have to be in place. The administration can augment the efforts by acting as a consumer in the products market. we all know that the government consumes just about anything one can think of. And once it does, it stimulates a chain of activities in the economy which has a positive effect on unemployment.
In view of the interdependence of the factors at the disposal of the central bank and the administration, measuring the effects of each action and predicting the extent of the impact on the fringes of the economy makes it look complex but in actual fact its very easy. The complexity is diminishes with the clear definition of and institutionalization of the mechanisms that the administration and the central bank can use.
When both the administration and the central bank begin to describe an increase in the production of raw copper and high corn harvest as increase in GDP, one wonders whether the country has the right set of eyes reading the economic indicators. I should not have to say it but copper cathodes and corn are intermediate products. In fact in the strictest of sense, they are raw materials. In their state, they should be excluded from GDP computation.
Excluding copper and corn from computation of GDP leaves us with absolutely no fundamentals to work with to determine the performance of the Zambian economy at any one given point. I think this is true because, as difficult as it is for the government to measure unemployment and the effects of its attempts to reduce the rate, it is even more difficult for the government to measure the incomes that were earned by households in the resource market. Assuming a close, two sector economy, the value incomes earned should give a suggestion of the value of all finished products produced in the Zambian economy in a given year which was bought by the Zambian consumers. Does Zambia have the mechanism in place to monitor retail sales? Who is capturing these data and how are they stored?
If it hard to compute GDP using such simplified approach, it is even harder to compute GNP. To start with, most of the manufacturing industries in Zambia are owned by foreigners. The proportion of what they produce has to be subtracted from the computation as we add the production of assets owned by Zambians abroad. I would be hard pressed to find Zambian nationals with assets worth writing home about reporting their earning to Zambia Revenue Authority on a regular basis. Or are there?
How then do we know the status and condition of the Zambian economy when there are no formal mechanisms in place to collect reliable data? Are these mechanism important? Howe difficult are they to set up?
Of course I am assuming that they are absent. If anyone knows better, please educate me.
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