POLITICS OF AUSTERITY AND HANDBAG ECONOMICS

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THIRD World politics are characterised by austerity, and “handbag economics.” Austerity is a state of economic condition involving; strict, severe, and stern measures due to economic crisis, to try and forego, certain comforts, and adornments, which you would normally enjoy. Handbag economics descriptively entails, an economic state of a country, where like a household, management of an economy, is from the handbag, lacking effective fiscal and monetary policy planning. Zambia must come out of politics of austerity, and handbag economics.

The only answer, to this chronic condition, is a First world advanced Presidency, which Movement for National Transformation (MNT) is advocating. We need an advanced economic industrialisation agenda.

Sadly, the Politics of Zambia, since 1964, under the Kaunda Administration, have exactly been politics of austerity and handbag economics, working against the citizenry sacrificing, while politicians develop themselves.

In the Kaunda Presidency, Zambians suffered with relative development, while their government was busy liberating other countries at their expense. Zambians paid a heavy price under coupons, and a failed economy, under heavy austerity measures.

Furthermore, in the Second Republic that started from 1991, and subsisted until 2011, under the (MMD) Presidency, again the Zambian people had a promise of privatisation and a liberal market economy, which failed lamentably to generate wealth for the common man.

The only people who enjoyed the benefits of the republic, where those who worked close to the powers that be, and those who were involved in the privatisation process.

The Zambians were sacrificed under heavy economic corruption scandals, with debilitating austerity measures that still affect us today. In 2011, the Zambian People, democratically elected the Patriotic Front (PF) with an economy that had a (GDP) growing at almost seven percent. The national debt as, a Highly Indebted Poor Country Status (HIPC) reversed. Zambians had a relatively improved human development of sorts.

However, under the (PF) in 2011, with all due respects, to the Robust Infrastructure Developments (RIDs), the country has performed poorly economically under; sever, strict, and stern austerity measures against the general populace.  The un-spirited Fight Against Corruption (FAC) is faintly and dimly, not inspiring. The Lungu Presidency, remains at large, and on the defence, in so far as various corruption allegations are concerned.

This can be substantiated by the; Parliamentary Accounting Committee (PAC), Financial Intelligence Center (FIC) Reports, Auditor General’s Reports, consistently with relative improvements consequently, showing; mis-applied, mis-appropriated, mis-used finances in the Public Sector. Other scandals, like Mukula, have been defended in all kinds of propaganda without a clear spirit to deal with these matters by Law Enforcement Agencies (LEA). This has caused a lot of; mis-trust, dis-content, pain and anxiety among the Citizenry, and Populace. Defending corruption, is not enough! It must be fought by a zero tolerance policy which (MNT) proposed since April, 2017. Others have joined in this Chorus now, agreeing with us ideologically.

 Moreover, under the (PF), Since 2011, the immediate removal of fuel-subsidies, high-levels of taxation, public debt for local contractors, foreign debt, plus Euro-bonds, have created an economic crisis that is “clouding” the fortunes of infrastructure developments of government.

The Human Development Index, remains still low. The people are under the strain of a high cost of doing business, and high cost of living, without a corresponding increase in their earning capacity. That is bad fiscal and monetary policy for a ountry. Macro-economics, is everything for politics.

The (PF) must go beyond politics of austerity, to generate “real growth” in the economy.  Herein, is patriotic advice, for those who mean well for the economy of the country, to come out of the “doldrums of politics of austerity.”

Advice can be ignored, or taken, for the good of the majority. Adversarial politics, create a barrier to sound economic and political engagements by suspicion. This alternative advice, would include such solutions as:

1.          Public Debt Management (PDM) urgently. How democracy is funded, is important for the economic development of a country. When too many lobbyists with vested interests, careless deals are made by government with both Multinational Corporations, and multilateral contracts are entered into, without a formidable plan for public debt ceiling management, and Sustainability for social justice, a nation can be economically destroyed.

Borrowing is not a problem. What is the challenge, is borrowing for consumptive debt, which must be sparingly, with a clear plan for repayments. Borrowing must incentivise the productive sectors, to stimulate exports, and the manufacturing profile of the country.

The exchange rate must be responsive to the productive value. All retirees, and local contractors must be paid, for government with a human face. Human development, must be the centre of economic policy, not just election focus sadly.

2.         The Policy on Trade, Finance, and Development (TFD) must be changed urgently. The Ministries of; National Development and Planning, with their counterparts in the Ministry of Commerce and Industry, must develop strategic initiatives, for the industrialisation of the economy.

They must create advanced competitive and comparative advantages, for growth of the economy.

Austerity measures are only remedial and short-term, but they are not a sustainable method of creating real growth of the economy. Balance of trade, is vital for stimulating the domestic economy to thrive. Without proper prioritisation in trade and financing, development suffers.

The current trade and financing policy, is very weak to boost economic growth.

3.         Review Taxation Policy (RTP) urgently. A government must be run, so that citizens benefit, and taxpayers do not go crazy. Government must create an environment for businesses to thrive, not muzzle Small Medium Enterprises (SMEs) before they even bud by high-taxes.

We know that under an economic crisis, the scarcity of cash compels the government to widen the tax base for more money to come in. The Minister of Finance, must be; visionary, innovative, and transformative, as a Sole – Corporate, to find monetary and fiscal solutions that become a win-win situation for Government, the private sector, and the ordinary worker.

These patriotic facts can help, if government listens. Zambia does not need Third World politics of austerity and “handbag economics.” of crisis management.

We need visionary first world; transformative politics, and economic leadership in 2021 and beyond, not austerity politics, and handbag economics. Economic Intelligence, is the key going forward and visionary leadership, which is lacking currently. Economic transformation is now, not the backward politics of power!

Written by:

Dr Daniel Mvula Shimunza

Founding President

Movement for National Transformation (MNT)

For First World Zambia Ideology

And 2021 Presidential Candidate.

Phone Contact: +260977806560

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