TALK TO CHINA
…we’re misguided to follow IMF – Dodia
By Fanny Kalonda
ECONOMIST Yusuf Dodia says the country needs to be careful with who it is getting advice from on resuscitating the economy.
In an interview, Dodia said Zambia should approach economies that were doing well and had been in the same situation before.
“If we look at the consultants who are coming from Europe, they are coming from economies which are bankrupt. Economies which are in recession. I don’t understand why we keep running to Europe for support or advice when countries like China, Thailand, Indonesia, Malaysia that are doing so well,” he said. “And yet we don’t see any value in talking to those economies for them to assist us. To give us advice. To give us support on developing our own economies. So, to me, that doesn’t make sense. I think that as a nation, we should be looking at successful nations who are role models of the world saying that how did you manage to come out of poverty and take your country into being prosperous nations? What lessons can we learn from you?”
Dodia said Zambia had little to learn from the West in economic matters.
“We have a lot to learn from countries like China, Indonesia, Malaysia and Thailand. These are countries that have had terrible pasts. History of poverty, and today they are amongst the world’s top producers. There is something we should be able to learn from them,” he said.
And Dodia has urged the UPND government to explore other alternatives apart from the International Monetary Fund. He said the Fund was not giving Zambia advice in the country’s best interests.
Dodia said the IMF package and the whole support programme was not very meaningful to Zambia.
He said the IMF should instead be pushing Zambia to start harnessing the potential from the country’s export earnings.
“I think government should be looking to other alternatives apart from the IMF because the IMF are not really giving Zambia advice in Zambia’s best interest. Clearly, it does not make sense for the IMF to be coming to Zambia offering us a $1.3 billion special drawing rights facility and then a $1.4 billion staff level facility to help us finance our budget, to help us meet some of our commitments,” he said. “And I say it’s unreasonable for them to do that. What they ought to be doing as an organisation that is supposed to be assisting Zambia to restructure the economy, they should really be pushing us as Zambia to start harnessing the potential from our export earnings. Zambia is exporting $40 million a day of copper, $1.2 billion a month. Why should we be borrowing from the IMF $1.3 billion when we are producing as a nation $1.2 billion?”
He called for a law that could improve the country’s earnings from copper exports.
“Now, this money may not belong to the Zambian government but belongs to the mining industry. But if a regulation is put in place, and a law put in place, that when the copper is exported to the tune of $1.2 billion, that export earning comes into Zambian banks,” he suggested. “Once it’s in Zambian banks, it can be used by the people of Zambia. Can be used by the government of Zambia while sitting in Zambian banks. But unfortunately, this money is not coming to Zambia. It is going in foreign banks. But we are borrowing from institutions who are also borrowing the same money that would have been in Zambian bank accounts.”
Dodia insisted that Zambia should be talking to China and not to the IMF.
“And if Zambia is talking to the IMF, they should be inviting China to the discussion table to come up with a solution. So, I think the IMF package and the whole IMF support programme is not very meaningful to Zambia. And it is very clear because we have seen that even the Chinese government who are our biggest creditors are saying why is Zambia discussing with the IMF on debt challenges when China is a significant player in this,” said Dodia. “So clearly, we are misguided to follow the IMF than to look at programmes with more resources like copper mining resources that are being exported from the country. Meaning we don’t have access that comes with … export sales. So, in my view, I think that this is something we ought to be thinking about – harnessing export earnings by bringing those export earnings in Zambian banks and allowing Zambians to have access to those earnings to be able to grow the domestic economy.”