C’mon, subsidies removal won’t increase poverty levels…


“Advice is overrated. Before you learn what others know, you need to learn what YOU know.”

— Harriet Rubin

Last Sunday afternoon, I went to Radisson Blue Hotel to pick up a parcel sent through a family friend who had just come in Saturday from my daughter who lives in the USA – like most Zambians he was running late, and the place was full with no place to seat- but was lucky, an old young friend from the Munies days beckoned me to an empty seat next to him while I waited.

Sunday was a hot day and it looked like it would rain. I ordered a lemonade beer shandy which I had to mix on my own; I then asked the old young friend and his friends what they were drinking.

Since elections, politics has taken over prime discussion time in Zambia. Every Zambian wanting to look well connected with top leadership and intelligent wants to discuss political issues. These young men were deeply dissecting Lungu’s mini Cabinet with one young man confidently saying- Lungu should have nominated an economist such as former BOZ governor Caleb Fundanga as Minister of Finance while the other young man said Industry, Trade and Commerce is too big for one young married lady to manage especially now if the industrialization program is to take centre stage. Professor Clive Chirwa, an engineer, should have been nominated Minister of Industry to show case his industrialization ideas then Lungu could have created another standalone Ministry of Trade and Commerce by scraping the already contentious Ministry of Religion-with Margret Mwanakatwe as its Minister.

These old young men are all CEO’s of private Multinationals and have a deep understanding of political issues. They also suggested that the present crop of Permanent secretaries and line Ministry Directors including the Bank of Zambia and their statuary Boards- ZESCO management, ERB board and its useless management, etc –not leaving out the diplomatic service -all -must weed out of members of the Cartel that held President Sata hostage. They’ll make it very difficult for Lungu to execute his development programs. But they showed low depth when they tried to discuss the issue of subsidies – they all agreed to the suggestion from their other friend who said:

“I think President Edgar Lungu should not agree to a wholesale removal of subsidies on petroleum, electricity, FISP fertilizers and maize meal, it’ll increase poverty levels.”   My inner self asked…but how?  This analysis wasn’t telling the truth but he was at the same time right when he said “the opposition especially Kabimba’s Rainbow Party are already making an issue of the imminent subsidies removal.” This is true.

It cannot be denied that the opposition will hoodwink the masses into believing that subsidy removals by an unkind PF government will lead to increased poverty levels. So unless the PF has reasonable explanations at hand about what causes poverty levels to increase, the masses are likely to agree with the opposition stand point.

But quickly—why is poverty higher today? I think two reasons. One is that economic growth has been abysmally low over the last half decade. And second: a smaller share of Zambian adults is actually working. Getting a quality job and a salary is usually a good way to move out of poverty, but we now have a near-record number of adults who are unemployed until all the industrialization programs positively take off.

Or could it be that the poverty we all talk about is a lie or is someone conveniently hiding it in statistics? For example, why is it that what is considered a poverty level income in a developed country – the USA (US$24,500 per year or K257, 740 per year) is an average income for middle class in third world countries like Zambia?

Why I ask this? Zambians in general are confused about poverty—many Zambians and economists define poverty differently. People who call themselves “poor” desire socialism and are perennially voting for their favourite Marxists and complain endlessly how unjust and rigged the system is, how fellow Men keep them down and how there is no equality and social justice. “Nobody brings up personal responsibility, being equipped with a good education and hard work ethics into the mix of poverty,” in this country.

But also the government can double the amount of money it spends on FISP or triple the amount it spends on Maize Meal and petrol subsidies, and it will mean very little if the next generation of young Zambians goes out into the world as adults without a decent education.

To say that poverty induced by socialist dictatorships is hard to shake would be an understatement. Ask any Zambian who lived through the UNIP era one party state and its offshoots of Humanism parts I, II & III, or ask Zimbabweans who lived through Ian Smiths era upto1978 and Mugabe’s thereafter, especially life and the economy after white farm invasions from 2000 and if you want a more recent example check out the Venezuelans what it is like to live in the workers’ paradise that Chavez forced upon his people while he stashed away billions from crude oil sales.

Lately, as the social justice, income disparity, income inequality, economic justice rhetoric intensifies both local and global NGOs crawl out of the woodwork to confuse, agitate, and inflame the low information Zambian voters.

When almost 70 percent of the Zambian public does not work and relies on some form of government subsidy (FISP, Maize meal subsidies, Petrol and Electricity subsidies), paid for by the 30 percent of the working population, it is perplexing when the former PF Secretary General and Minister of Justice Wynter Kabimba states that “Zambians must brace themselves for even harder times in the next five years under president Edgar Lungu’s leadership.” And you start to wonder why there has been only silence from usually loud PF officials.

Yet these PF officials know very soon Zambians will start to ask the same questions because the IMF loan agreement will demand a staged down withdrawal of subsidies on electricity and petroleum products- perhaps it may eventually demand for a scaled down FISP program too. These are things we should be prepared to simplify and explain to Zambians.

It seems to me that the 30 percent of Zambians who are already working have become unwilling servants to the other 70 percent Zambians on subsidies and other welfare freebies whose main job is to vote the same politicians who promise to deliver additional unearned income tax and entitlements by taxing the rich even more.

It’s galling to hear people who pay no taxes, work, produce and sale their newspapers and get paid cash under the radar of the ZRA, receive welfare in form of subsidies on maize meal, petrol and electricity and are then paid by foreign interest groups to show up and protest people who work for a living, yet screech that the rich are not paying their fair share.

But seriously, who’s victimizing these people who consider themselves poor and downtrodden? If you ask them and their political representatives who became rich in office, their MPs who vote in parliament and implement policies that keeps their constituents poor, it is the rich who are at fault. Personal responsibility and a good education, which has been free since 1965, in their bad choices are never mentioned.

In addition it would appear Zambia is a playground for donors- else how do we allow anyone say stuff like: “I consider income inequality the most dangerous part of what’s going on in Zambia?” This is madness. Where did these chaps get the multi-dimensional poverty analysis comparison data from? After all, it’s written: Matthew 26:10-11: But Jesus, aware of this, replied, “….you will always have the poor among you, but you will not always have me.”

But it’d still be interesting to evaluate such statements now when Zambia has been plagued by low copper prices, low energy generation capacity, huge unemployment, billions of dollars of new debt, anaemic GDP growth, weak job creation, disastrous economic policies, out of control spending, devaluation of the kwacha through what we could call constant reverse quantitative easing’s, heavy corporate taxation which causes our parliament enabled overseas exodus of capital, government rules and nuisance regulations from institutions such as the ERB that increase petroleum and energy costs, destroy jobs and prevent the creation of new ones, and healthcare system encompassing a huge portion of the economy and wasting billions of kwacha in the process of destroying probably what could have been one of the best health care system in the region.

Zambians especially the opposition Rainbow Party must realize that in order to promote class envy and discontent, Saul Alinsky recommended class warfare, the division of people into wealthy and poor in order to make it easier to tax the wealthy with the support of the poor. Increasing the debt to unsustainable levels allows the government to increase taxes on the middle class, thus producing more poor people who are easier to control.

Mr Wynter Kabimba must be told that Zambians are already the most generous nation with their time, money, expertise, food, medicine, and education for those less fortunate.

We don’t need the government to step in and confiscate in a Stalinist fashion our hard work in the name of the ill-conceived and unjust Marxist brand of “social justice.”

People should not want someone else’s wealth or welfare on a constant basis, they should look for the opportunity to work for a better life, not expect crumbs from a Rainbow Party tyrannical communist government or from a government beholden to crony capitalist corporatist interests.

The generous “government” subsidies and welfare in any form to those 70 percent low information voters who are elated with the current status quo does not come just from the rich who pay taxes, but also from people who often work long hours every day, two or three jobs and their wives and children are on the streets selling stuff to make ends meet, and sometimes cannot afford to buy the very things these subsidy recipients purchase with someone else’s hard work. Additionally, what the government gives so liberally with other people’s money, it can certainly take away.

This administration will be creating a Zambia of two people, one that works and one that does not work but votes for entitlements they have not earned. The plan is to reduce income inequality by debasing and punishing the successful through the forced redistribution of their wealth and income.

That is not to say that there are no Zambians who do not genuinely need temporary or permanent help but have fallen through the cracks of welfare. It is people who know how to milk the system (such as the ZNFU Board, civil servants on FISP, millers of subsidized Maize meal, taxi drivers and owners on Petrol subsidies and Electricity subsidies that go to profit industries etc) who benefit the most from the welfare largesse.

Being on subsidies in any form is not just the result of lack of a good education, bad choices in life, unwillingness to work, of a culture of entitlement (it is free and the government owes it to us), it is also a function of bad luck, personal injury, illness, and hard times during cyclical economic downturns.

Since Kaunda declared a war on Poverty, Ignorance and Diseases, “many Zambians are less capable of self-sufficiency today than when this War began.” And everyone knows the only gateway to self-sufficiency is hard work. But since this war some ±43 years ago, approximately ±US$1.0 billion every year totalling ±US$43 billion on all forms of subsidies and welfare programs have been spent with nothing to show for it.

Eradicating poverty should be more than just streamlining subsidies– it should be about fighting the real causes of subsidies and dependency in any form: the breakdown of families, rejection of faith, truancy, dropping out of school, having babies outside of marriage, drug use, crime, and lack of personal pride, responsibility, and accountability for one’s actions.

Spreading the wealth, the socialist goal, is a dystopia that will further enslave people into perennial poverty. The Bible is instructive on many issues, in Proverbs 19:15, it says: Laziness brings on deep sleep and the shiftless go hungry and in 20:13. Do not love sleep, or you will become poor, Open your eyes, and you will be satisfied with food.

Just a thought,

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