Big loot in small packets

The President promises civil servants a pay rise: the Prime Minister and the Minister of Finance say government doesn't have the money. As power struggles become more open, issues like this come to the fore.

Our country has rich resources, but the ruling elite for years pocketed so much of it that government couldn't support schools and hospitals and we ordinary citizens can't pay our electricity and water bills. As that group's grip on power slips, they are trying more desperately to hold on to the wealth.

The easiest things to steal are small things of high value. We know some of the story about diamonds. Some of us had been wondering what we were exporting to the United Emirates that earned double the cost of the oil we imported from them ($276,645,797 against $139,792,713)?

Now we know most of the answer. The UAE wants to release $160 million worth of our diamonds to the Indian jewellers, who, being sharp businessmen, know that blood diamonds come cheaper because they can't be sold openly everywhere.

So our kleptocrats are reduced to selling at a discount because some people have noticed the stink they carry from the murky depths of the underworld. Not to worry; the kleptocrats just steal more to make up their loss. They are still selling at a loss, but they're making a killing in more ways than one.

For example, where does our gold go? Gold production has been rising since hitting a low in 2008 of 3.07 tonnes, reaching 4.97t in 2009 and 9.6t in 2010. If that 9.6t is all that was marketable, there is a problem; producers get the best prices on the London Bullion Exchange, but to be a member you must be exporting at least 10 tonnes/year.

We used to export about 20t, but lost our membership when our exports dropped below 10t two years running. Our biggest export last year was Customs category “unused postage, revenue stamps; stamp-impressed paper;

cheque forms” which reached $1million in 1999, zero some years later, over $200million in 2009 and $521,877,202 in 2010.

Fancy paper is an unlikely item, but the likeliest producer is Fidelity Printers, the printing wing of the Reserve Bank, who held the gold license. We can only hope that Tendai Biti knows what is going on.

If he does, he might be wisely keeping his mouth shut, but we should expect production to exceed the 10 tonne limit in 2011 and then there should no need for honest men to keep secrets.

Curiously, although platinum production has been rising (4.56t in 2005; 5.19t in 2006, 5.30t in 2007, 5.50t in 2008 and 6.86t in 2009), the official foreign trade statistics record no export of platinum or platinum ore in 2010.

Has some kleptocrat got his sticky fingers on that also? However, there may be other explanations there. The miners might be manoeuvring to secure their position in the face of threatened expropriation/indigenisation. We can only ask, maybe guess, and wait to see how things develop.

Platinum production

2005 – 4,56t

2006 – 5,19t

2007 – 5,30t

2008 – 5,50t

2009 – 6,86t

2010 – 0 t

Post published in: Opinions & Analysis

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