Why Zambia Needed the SI 89

One of the most fascinating things in the world is to watch how intellectuals — those whose work consists purely of spreading their ideas through the pen — always feel that they are intellectually and morally superior to everyone else, and can therefore tell anyone how to do their jobs. Even when the intellectual has no idea what that job really involves, and has no experience whatsoever in practically doing such a difficult job, they always feel they would be better at it because of their superior moral and intellectual capacity.

For example, just last month when some federal police agents in the US shot an uncontrollable woman who was trying to drive into the White House, journalists everywhere rose up to immediately condemn these security agents for shooting the woman “instead of just shooting into the tyres of her car.” These are people who have likely never held a gun in their lives, but because they are “intellectuals” they feel they are able to tell everyone else how to do their jobs. And everyone who does not agree with them is just immoral or has been bought by someone!

This is what we have in the case of this editorial that is morally condemning the people who actually worked on the SI 89 bill that granted the mines some tax relief on their exported copper concentrate, the ones who actually spent a long time looking at the facts and figures before coming up with a judgment of what to do in their complicated negotiations with these mining investors. The intellectual in this editorial simply believes that these people have to be corrupt for them to come up with a decision that is so different from what he can “clearly” see from his office, even without seeing any figures. He leaves no room for the possibility that he could be the one who is wrong, and that they might have had more information, and even more experience, when they made their decisions. No, it can only be that they are morally inferior beings who need to be instructed on how to be “incorruptible” by someone who was not privy to their information!

Of course this is not to say that such government workers are always competent. But as a reporter one still has to investigate why they made their decisions instead of just assuming that they are immoral fools who must have been paid by these “evil investors” to make their decision! The editor also uses a common logical fallacy, the argumentum ad hominem, to paint any Zambian who disagrees with him (not just these government officials) as obviously having been paid by the same mines to express his or her opinion. Why can’t you just let people express their opinions freely and then defeat their arguments logically instead of cynically trying to impugn their integrity first? Do newspapers who accept some money from international human rights bodies also lose their credibility to speak on human rights just because they’ve been “paid”?

There is a whole background to the SI 89 that the Ministry of Finance decided to introduce before the president mocked them publicly for such a “foolish” decision. If everyone could simply ask the people who were involved to explain how they came up with their decisions — without condemning them as immoral before they can even open their mouths to speak — we could possibly learn something from the difficult situation they were faced with. No one can be so smart that they can know everyone’s job without even stepping into their shoes or at least finding out why they made their decisions.

According to the people who were actually involved with this issue, both the government and the mining companies have always wanted the copper concentrate to be processed locally. But there has been very little capacity to do this locally, which is why First Quantum has been building its own smelter, except that this won’t be ready until a year from now, as the Minister of Finance explained.

So, in order to keep producing without worrying about the surplus concentrate that can not yet be processed locally, FQM and other mining companies decided to export the concentrate. In response to this the government introduced a 10 per cent levy on concentrate exports to discourage such exporting. This indeed had the intended effect of reducing concentrate exported but because of limited local capacity, this concentrate was now just getting stockpiled. Since there was so much concentrate stockpiled, these mines were forced to reduce their operations (including laying off some workers) until the stockpiled concentrate could be processed. In these circumstances it made sense for the export levy to be suspended, and the government officials understood this when they studied the situation. From a distance it looks like a silly move, but not when one considers the alternatives.

Zambian Finance Minister Alexander Chikwanda

Zambian Finance Minister Alexander Chikwanda

Knowing all this information and proving for themselves that the mining operations had indeed been greatly hindered and many people’s jobs were threatened, the concerned government officials decided that it was in the best interest of the country to suspend this export levy in order to save jobs, at least until there is enough local capacity to deal with all that surplus concentrate that was just piling up. By ordering the Minister of Finance to rescind his well-informed sober judgment, the president will find himself facing worse social consequences than what he imagines he has heroically prevented.

The intellectual who wrote this editorial obviously does not know what kinds of difficult decision these officials had to make when they saw the situation on the ground. When you are just working with your pen, it is easy to think that every decision in the real world is easy to make. To him, any “smart” negotiator from the government should always come out with the best of both worlds: collect huge money for the government through high taxes and also save all the jobs for our people. To him this is so easy that whoever fails to achieve this ideal result has just been corrupted and he needs to be replaced with people who have “incorruptible spirits.”

It is exactly like those journalists who have never held a gun telling people who have always worked in such dangerous, unpredictable circumstances how to shoot accurately under any situation. “Just go for the tyres, you fool!” they scream from their safe offices where the only “weapon” they have ever held is their pen. If the poor officers miss the tyres or shoot the driver instead, it can only be because they are racists or they hate women or they have some other sinister motive, since it is “so easy” to just shoot at the tyres of a fast moving vehicle!

The lesson for all of us is to cool down and be very careful before condemning other people until we thoroughly know what realities they had to deal with. Even the mines themselves should not just always be excoriated as “greedy evil scavengers” who always just want profits at the expense of everything else. Yes, they want to make profits because that’s what all businesses do. And no, they don’t like high taxes just like all businesses don’t, including newspapers.

It’s easy to condemn them for not liking high taxes until you find yourself in similar shoes. Indeed when the government tried to introduce some higher taxes on these same newspapers that claim to support high taxation for the public good, we all remember how sharply they protested. They somehow believe that everyone else deserves to be taxed high, but not themselves — because their job is too “special,” their product too “important” — no matter how misinformed.

Similarly, they want the government to have strict regulations in national interest for everyone doing business, but when the government tried to also regulate them “in national interest” by proposing some strict rules on accreditation of reporters, reporting standards, etc, they were furious: “no, not us; we are too smart for you to regulate us, and we are too moral for you to guide us; we will regulate ourselves! Just regulate everyone else because they are too greedy, unlike our special incorruptible spirits.”