President Michael Sata tries to balance Chinese investors’ interests and his populist policies

The former scourge of Chinese investors, President Michael Chilufya Sata, has reshuffled his Patriotic Front government to placate Asian and other investors and to streamline economic policy. On 3 February, he moved the outspoken Labour Minister, Chishimba Kambwili, who had lambasted Chinese and Indian economic interests and upset the Chinese Ambassador among others, to the Sports Ministry. Ambassador Zhou Yuxiao publicly lamented that there was only one political party in Africa that had made China a domestic political issue. The Labour portfolio is now the responsibility of the Information Ministry. The reshuffle is an attempt by Sata to preserve Chishimba Kambwili, one of his most trustworthy PF party stalwarts. ‘We told him [Kambwili] that he was fighting a losing battle, as the Chinese would have the last laugh,’ a senior government official said.

President Sata’s election campaign focused on pro-poor policies and whipped up anti-Chinese sentiment, but ‘King Cobra’ has since apparently changed his tune and Beijing is reciprocating with generous gestures. A delivery is expected this month of 30 ‘donated’ buses and 30 luxury cars, including a limousine for the Lusaka government.

Chinese companies operating in Zambia hired an aeroplane to fly supporters to cheer the Zambian team on to victory against the Elephants of Côte d’Ivoire on 12 February in the Africa Cup of Nations final in Gabon. During the lunch held in honour of the victorious Chipolopolo on 15 February at State House, Sata quipped, ‘The Chinese of [former President] Rupiah Banda are different to the Chinese of Michael Sata.’ In December, Vice-President Guy Scott was in Beijing to discuss the establishment of formal relations between the PF and the ruling Communist Party of China. However, perhaps off-message, Sata’s ministers have continued to criticise the Asian investors.

Copper miners were among the first to express their concern after Mines Minister Wylbur Simuusa warned on 9 February that the government would have to reconsider reinstating the windfall tax if copper prices continued to rise. Simuusa’s hardline attitude on salary negotiations (see 'Wild cats and King Cobra', AAC Vol 5 No 1) had yielded results the day before, when Barrick Gold, China Nonferrous Metals Mining Group and Glencore International agreed to offer pay rises of 16-18% to their Zambian workforces.

Kambwili’s departure
Kambwili was Foreign Affairs Minister in Sata’s inaugural cabinet but he only lasted four months. On 12 January, following complaints from diplomats about his crude language and lack of diplomatic etiquette, Kambwili was transferred to the newly-created Ministry of Labour, Sports, Youth and Child Development. There, the employment practices of mining and other companies, some of which have attracted a raft of negative publicity on labour, health and safety issues (see 'Underground and under threat', AAC Vol 5 No 1), fell under his remit.

On 11 December, there was an explosion at a steel plant belonging to Trade Kings Universal Steel and Mining, which is run by Indian-Zambian businessmen, and eleven people were injured. Workers at the plant went on strike on 30 January in protest at unsafe working conditions and poor wages. On 24 January, Labour Minister Kambwili made a surprise visit to Chambishi Copper Smelter and told company executives that Zambian engineers should be paid better salaries, that the amount of Chinese labour used at the plant should be reduced and that Chinese workers should be replaced by trained Zambians.

Kambwili ordered inspections of factories on the Copperbelt, paying special attention to Chinese-owned operations. He claimed to have reports of Zambian labourers ‘being treated worse than animals in their own country by Chinese’. He quickly developed a combative relationship with the Chinese Embassy and the staff at the Sinozam Friendship Hospital. The hospital once belonged to Zambia Consolidated Copper Mines, but it was sold in 1999 at the height of the privatisation boom.

Hospital employees complain of poor working conditions and some say that they receive just 700,000 kwacha (US$140) as basic pay per month. On 29 January, Kambwili revoked a work permit for Sinozam Friendship Hospital’s Chief Medical Officer Qin Xisheng, whom he accused of being rude. On a surprise visit the previous day, the Minister had pointed his finger at Qin and told him that the governing PF was not like its predecessors and would not allow Zambian workers to be paid low salaries.

Kambwili says that Qin complained about the remark to Ambassador Zhou and that Zhou then phoned Acting President Alexander Chikwanda. (President Sata was in Uganda attending the International Conference on the Great Lakes and Vice-President Scott was in China.) Zhou said that Kambwili was intimidating Chinese investors and threatening Qin about workers’ conditions of service.

Sata reins in his cohorts
When Sata returned from the African Union summit in Addis Ababa, Ethiopia, in early February, he removed the labour portfolio from Kambwili and warned his cabinet against making alarming statements that might scare investors and incite the public. He said that the government would not strengthen the economy ‘through threats and being loudmouthed’. Kambwili later said that he had met Zhou and Qin and that they had reconciled.

Kambwili’s rhetoric and style is similar to that of Sata’s in opposition. He has the ability to mobilise the PF grassroots, the poorly paid workers who form the bedrock of the party’s support. Amidst references to his similarity to Jesus Christ and boasts about his ability to act without President Sata’s say-so, Kambwili identified the political dangers for the PF: ‘MMD didn’t lose power overnight. They started by losing popularity along the line of rail [copper mining areas and industrialised regions], especially on the Copperbelt... PF cannot risk to follow that same path.’

Throughout the disputes, the Federation of Free Trade Unions of Zambia and the Miners Union Of Zambia have backed the Labour Minister’s tough stance on Chinese investors. One trade union official told Africa Confidential: ‘I do not regard the Chinese nationals as investors. What have they invested in so far? Shops in Kamwala, selling fake products and construction companies, which money they send back to China? I won’t be surprised to find a Chinese garden boy because these people have just taken this country by storm...What’s wrong with Kambwili’s style of leadership? Do you honestly think that a Chinese minister can tolerate such stupidity in their country?’

Kambwili’s departure may not achieve the calm climate that the President now desires for investors. Labour is now the responsibility of the Information Ministry, which is headed by another veteran trade unionist, Fackson Shamenda.

Meanwhile, Bob Sichinga, the Commerce Minister, is in the eye of another China-related political storm, which he has so far survived. Sichinga accuses the formerly ruling Movement for Multiparty Democracy of dispensing largesse in the form of billions of fake kwacha printed in China ahead of September’s elections. On 3 February, he wondered aloud to a group of businessmen in Kitwe about the K3.1 trillion in counterfeit currency found by banks in the financial system – along with a cache of fake money found in the ground. In November 2011, billions of kwacha were discovered buried at the farm of former MMD Labour Minister Austin Liato.

Sinchinga said the story was just a rumour, but the MMD has launched a libel suit against him. Finance Minister Chikwanda and the Bank of Zambia have disavowed his claims. The Chinese Embassy has demanded that Sichinga provide proof but he has since refused to comment, saying only that the case was still under investigation by the government.

Source: Asia-Africa Confidential