Chinese fortunes

Anver Versi

China is Zambia’s biggest investor, but when locals accused Chinese employers of underpaying them, and even using violence towards them, new President Michael Sata had to act 

As the results of the 2011 general and presidential elections were being announced, Hedges Mwaba, an operator at the Chinese-owned Chambishi copper mine was delighted to receive two pay cheques, one for around US$600 and the other for $1,000. He explained his good fortune by saying that the company had run out two separate cheques – the lower one in case the incumbent, Rupiah Banda, won the election and the higher one if the challenger, Michael Sata, leader of the Patriotic Front, emerged victorious. Obviously a mistake had been made and both cheques had been sent out. But this incident underlined the trepidation that Sata, known as King Cobra in a country where almost anyone in authority acquires a nickname, had aroused among the Chinese and his opponents. 

The veteran politician, now in his 70s, gained this fearsome reputation from his refusal to back down in an argument, his scalding wit and his long memory of every slight aimed in his direction. The watchwords had been ‘don’t provoke King Cobra’ or be prepared to face dire consequences. 

The Chinese, the largest investors in the country – particularly in mining – had provoked him by their astonishingly cavalier attitude to local staff. Workers were underpaid, bullied and sometimes beaten. The almost total lack of safety standards made the work dangerous and the frequent protests were met with lock-downs and threats. In 2005, Chinese managers shot and wounded five protesting miners at Chambishi and in 2010 two managers shot and wounded 12 miners protesting against salary delays at the Chinese-run Collum coal mine. But charges of attempted murder in both cases were dropped by the Multi Party Democracy (MMD) administration. 

Sata accused the MMD, which had been in power for 20 years, of being in cahoots with the Chinese and completely oblivious to the needs of the people. The administration was riddled with corruption and Rupiah Banda, who had succeeded Levy Mwanawasa as President following a narrow election victory over Sata, seemed to spend more time attending conferences abroad than tending to his duties. The country was more than ready for change and its citizens chose Sata as their champion in the 2011 elections. 

In the run up to the elections, Sata’s ferocious attack on the Chinese so unsettled Beijing that the Chinese threatened to pull out all their investments if he became president. Sata dug in his heels and said they were welcome to do so if they so chose. But as soon as Sata was declared the winner, the Chinese made an abrupt volta face and the new Chinese ambassador to Zambia, Zhou Yuxiao, was among the first to congratulate Sata, extending an invitation from the former Chinese President Hu Jintao to visit Beijing. 

Zhou pledged to crack the whip and bring the Chinese companies to order. “The Chinese policy is that all Chinese nationals working in other countries respect local labour laws,” he said. “They must observe the laws of the land anywhere in the world.” Sata countered: “When your countrymen adhere to local laws, there will be no need to point fingers at each other,” signalling a thaw in the fraught bilateral relations. 

Under intense pressure from Beijing, and the threat of the King Cobra poised to strike, Chinese companies began to clean up their act and raised pay scales. But it was too late for the atrociously run Collum coal mine and in early 2013 the government revoked the license over safety concerns and took over the running of the mine “until a suitable new investor is found”. Having made his point, Sata brought Zambia’s first President, the often emotional Kenneth Kaunda, out of the political cold and sent him as an envoy to arrange a state visit to China in April last year. He was given a rousing welcome by President Xi Jingping who signed several agreements, including the acceleration of economic zones in Chambishi and the capital, Lusaka, and support for Zambian SMEs. 

Sata, in turn, thanked the Chinese for their contribution to infrastructure development in his country and recalled that “even when the Western countries didn’t want to work with us because we didn’t have money, the Chinese came and helped us build Tazara”. In December, China pledged $221 million to upgrade the creaking railway (see page 61). 

Having kissed and made up with the Chinese, Sata seems to have set his sights on dragging the country’s still backward agricultural sector into the modern era and creating much-needed jobs. While with an average annual growth of around seven per cent, Zambia is one of the continent’s star performers, the majority of people are still poor. Foreign companies dominate the commercial space. Mining provides 80 per cent of foreign exchange revenues, but it is not a particularly prolific creator of jobs and its contribution to tax income is meagre. 

In addition, Zambia has a long history of leaking capital, prompting Finance Minister Alexander Chikwanda to enact a law authorising the central bank to monitor cross-border capital movements. He said the aim was not to impose capital controls, an anathema to investors, but to get a handle on the flow of capital into and out of the country. 

This is an appropriate measure, as long as it does not get bogged down in bureaucracy, as the other major battle facing Sata is the culture of corruption that was endemic for over two decades. It had become so rampant during the presidency of Frederick Chiluba (1991-2001) that Vice-President Levy Mwanawasa (who was to succeed Chiluba) resigned his post saying: “I can no longer be part of a government that is cheating our dear people. I find it hard to discharge my duties in my position as Vice-President when the entire rank and file of the government structure is filthy with corruption. Corruption has become so entrenched.” 

After losing power, Chiluba was charged with several counts of corruption but eventually cleared. However, the High Court in Britain found him guilty of conspiring to rob Zambia of $46 million. Chiluba died in 2011. Former President Rupiah Banda, and some of the ministers of his administration, are currently charged with abuse of power while in office – or corruption. Even Justice Minister Wynter Kabimba was investigated over a tender deal with a petroleum company before the Anti-Corruption Commission cleared him of suspicion. 

With a slender majority in parliament, Sata has followed Mwanawasa’s example of appointing some of the opposition to ministerial positions to enable the government to move on with legislation. But critics worry that the imperious Sata is using the colonial era Public Order Act to harass opponents and some accuse him of wanting to set up a single-party state. 

Earlier this year, opposition MP Frank Bwalya was arrested and charged with defamation when he described Sata as Chumbu mushololwa, which in the Bemba language translates into a sweet potato that breaks when it is bent, suggesting that Sata is inflexible and unwilling to listen to advice. 

There is no doubt that Michael Sata is very much his own man and makes it plain that he does not suffer fools gladly, but his handling of the Chinese issue and, thus far, the opposition in parliament demonstrate a subtlety that few believed he possessed. In addition to its venom, the king cobra is also one of the most flexible creatures in the world. In the snake-pit that has passed for Zambian politics for so long, perhaps only King Cobra can bring the order the country needs.

About the author:

Anver Versi is Editor of London-based African Business and African Banker magazines


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