Tuesday, May 8, 2012

Devaluation Finally?

Malawi Economic Justice Network does not seem to know what happens to the ordinary person that uses public transport. Though it is this person they should have considered first other than the donors wishes who don't even live in Malawi.

Shall companies operating in Malawi make profit with such a huge percentage of devaluation? In my opinion, those that sell their products locally and make international transactions to enable them to do so, if they do not cut their international transaction costs, they may decide to raise the costs of their local sales to cover up because they are buying the dollar 49% expensively.

In short, companies whose Forex earnings are lower than their Forex expenditure, will operate at a loss unless they cut their Forex expenditure. If they do not cut their expenditure but decide to raise the prices, they contribute to the high inflation.

In my opinion, these companies are not of benefit to Malawi but are its economic drain into wastage.

The government will need to make sure they separate their donations so that, they cover expense requirements that will require importation of goods and services.

If they use this Forex for local expenditure, it should be first after covering all the importation costs requirements, it should do this transactions with the reserve bank not the local ordinary banks otherwise, this Forex will get in the hands of individuals and companies and make an appearance of Forex shortage.

For all its development contracts, the government should make sure it is using Kwachas for for transactions not external currency.

This is necessarily what will help the Kwacha to regain its value because of its usefulness in local transactions.

For all its Forex transactions, banks should not hold the Forex in their own reserves but should exchange it with our local currency to the central bank at the official rate.

If the banks decide to still hold their Forex within them and not exchange it, the government will keep on failing to make imports of public goods and services like fuel, medicines, machinery, etc.

I would then also consider that banks should stop keeping money in foreign currency but convert the foreign currency at the official exchange rate.

The expectation of maintaining value of the amount at point of deposit should motivate the desire to stabilize the exchange rate. So then, those who put foreign money in banks will not have to worry about their foreign money losing value but get it bank as they put it in.

This will also help our currency regain its value for its usefulness.

Other, things the government can consider and prioritize with the gained Forex is to buy machinery and vehicles to rebuild back PVHO.

It is most often difficult and expensive to maintain the condition of public infrastructure if the government does not have the required machinery. Furthermore, it is cheaper for consulting companies working on building or construction of public infrastructure to hire the equipment from PVHO, than to individually acquire some.

The amount paid to hire this equipment should be enough to cover costs of maintainance, to cover the salaries of the employees, to allow for acquisition of new equipment and also to contribute some to the central treasury.

The idea of a self-sustaining government should not be bad if we understand that government has employees, the civil servants who have to be paid at the end of the month. They have administrative costs which have to be covered on daily basis in order for it to accomplish the duties it has. For without these, a nation is ungoverned. It is then useless to have a government in place if it cannot settle disputes among its citizens, if it cannot protect its citizens, if it cannot feed, educate, cloth and provide good health to its citizens.

After all, these are the same things that donors wish to achieve at the end of the day. Yet, what then motivates their wish to govern us? For look, they do end up leaving us without our necessities when then they desire to.

It is better then to let our elect government govern us than have donors govern us leaving us hungry when they want to.

Only malawians can better take care of malawians. A European will someday remember his Europeaness and cease to care about Malawi. They will destroy our land at wish. But look, we malawians have no where else to go in the world but right here in Malawi. Allow us therefore to take care of our own home as we wish to. Allow us to protect our own home from those that destroy it. Allow us from our own homeland grow our own food. For if we do not grow our own food, no other land will grow food for us. For land should feed those who dwell on it. And each of those that dwell in that land will always have enough. But if some land is left uncultivated, then the world will have a food deficit.

Let priority for land ownership be to the natives. If possible a foreigner should only have temporary use of land and also of limited size maybe just enough to sustain him and his family in their time of stay in that land as a global citizen. Then we might never again have conflict like of Zimbabwe.

Let the owners of the land retain their right to regain it when they need for their own use.

For if there is such a right granted to the natives, the foreigners dwell with this expectation and when the owners require it back, a good amicable settlement is possible without inviting sanctions like Zimbabwe because the foreigners have to forcefully give up the land.

It is not good to get citizenship fraudulently for you necessarily infringe on the natives right to their land. If you do, get kicked out, forcefully, take it humbly.

This reminds me on the citizens of Burundi recently vandalised. Why hurting another human being is a crime, government should work on repatriating the Burundi people as there is now peace in their land. I believe international laws of repatriation of refugees should resolve every problem they may encounter as they get repatriated.

In the end, it is good when foreigners decide to settle down to start businesses, consider where they come from. After all, you require work permits or other permits to operate in America or Europe. It should not be different in Malawi for the same reasons.