issue 312 - May 1999
Labourers in Zambia and traders on Londons Metal Exchange have one thing in common
their livelihood depends on the international trade in metals. But thats where the similarity ends.
Chris Holt reports on whos really paying for the falling price of copper on world markets.
Lefkata Jere spends his days breaking big rocks into little ones in Misisi Compound on the outskirts of Lusaka, Zambia. With one hand he wields a four-pound hammer, with the other he steadies chunks of limestone on a rock anvil. Grey dust covers every stretch of his long, stooped limbs. Hes 58 years old.
Its nearly two years since Lefkata lost his job and with it his dignity as an electrician in one of Zambias state-owned industries. Now his wife sells homemade fritters, his son goes from door to door recharging batteries and Lefkata breaks rocks. The familys only regular income is his daughter Patricias: she brings in $27 a month as a pre-school teacher. We worry about hunger, he says. Were suffering a lot here.
There is stiff competition between stone breakers. Life in Misisi Compound is accompanied by the musical chip-chip-chip of metal on limestone. Those who cant afford hammers crack rock with rock. A weeks work may produce a knee-high pile of gravel that can be sold to a contractor for about $8. Sometimes the men with dump-trucks want dirt or sand, which are also sold in mounds at the roadside usually by someone rich enough to own a wheelbarrow and a shovel. Almost everyone in Misisi is trying to sell something: a pile of tomatoes, a mound of onions, a tiny bottle of cooking oil.
It hasnt always been like this. At independence from Britain in 1964, Zambia was one of the most prosperous nations in sub-Saharan Africa, with fertile soils and abundant natural resources. The jewel in the crown was its vast copper mines, which provide two-thirds of the countrys export earnings. Flush with this wealth, the socialist Government of President Kenneth Kaunda nationalized industries, built schools, hospitals and roads, and subsidized healthcare, higher education and food. Jobs and the state bureaucracy boomed.
The bubble burst when the price of copper plummeted in 1975. Hoping that it would soon rise again, the Zambian Government borrowed money from abroad. But the copper price never recovered and Zambias external debt spiralled from $3.2 billion in 1980 to $7.2 billion in 1990 by which time it had become one of the most heavily indebted countries in the world.
Since 1992, restructuring policies have been pursued with gusto by the Government of President Frederick Chiluba. They have followed a familiar pattern: cut public spending, liberalize trade and financial markets, remove subsidies and privatize state-owned industries. Thats why Lefkata Jere lost his job.
There is still an expectation that if Africa continues on its current path its economies can grow, says Mulima Kufekisa Akapelwa, co-ordinator of the Catholic Churchs poverty-monitoring project. Last year Akapelwa travelled to Birmingham in the UK to lobby world leaders about debt at the G7/8 summit.
For six years Zambians have been asked to do without, Akapelwa explains. To tighten our belts and wait for the economic miracle. But what sort of economic justice is it when those who can afford the least are expected to give to those who already have the most?
Its a question that doesnt perplex one of the traders on the London Metal Exchange (LME). Zambia doesnt have any alternative, he shrugs. If they want to survive they have to export copper. They need the revenue. The tragedy is, the more they produce, the lower prices fall and the deeper they sink. But if they dont produce at all, death comes much faster.
One of the last commodity markets to retain open-outcry dealing, where traders meet face-to-face within a ring, the LME is considered a gentlemans exchange. There are strict rules about dress and behaviour dark suits, no getting up from the red-leather benches, no gum.
More than 90 per cent of the worlds trade in copper takes place here in the heart of Britains financial district. A digital clock flips to 12:30, a bell rings and a frantic five minutes of trading between City brokers begins. The price agreed between 14 men at the moment the clock turns 12:35 will affect the lives of thousands of people in copper-producing countries around the world, from Zambia to Chile and China. As the seconds click past, the traders hand signals become more urgent, the buzz of dealing rises to a roar, the clock flips over and red lights flash overhead. The display board show that todays price is the lowest in 60 years.
Thats good news for rich countries telecommunications companies, power generators and countless other industries and their customers will benefit from cheaper copper. But its more bad news for Zambia and for stone breakers like Lefkata at the farthest end of the economic chain.
Chris Holt is a freelance journalist and senior writer-editor at the Catholic Fund for Overseas Development (CAFOD) in London.
Zambia Jubilee 2000.
Contact: Peter J Henriot, SJ, Jubilee 2000 Zambia Campaign,
c/o Jesuit Centre for Theological Reflection, PO Box 37774, 10101 Lusaka, Zambia.
e-mail: [email protected].