"It should be emphasised that Lesotho’s politics tends to be marked by zero-sum nature of engagement of politicians across and within parties. This is explicable, in part, by reference to the country’s poor resource endowment. A small, landlocked and impoverished Lesotho has always been mired by conflict-ridden politics, in part, because the political elite perceive politics (through parties and the legislature) as a license to access state resources. Given bleak prospects for accumulation in the private sector, the state becomes a major avenue for accumulation and that explains why contestation for state power among the elite becomes so fierce and has generated protracted violent conflicts in the past. This helps us pose even a bigger or complex problem: what exactly are prospects for building and sustaining representative democracy in poor countriesOn my first reading of this statement I was aghast, I know Matlosa! He is a son of the soil, we have shared lots of laughs, had a few beers, discussed serious issues, agreed and differed, how dare he? Who is he to assert that we are probably doomed to and endless zero-sum game?
without a sound economic base like Lesotho?"
In fairness, by the time I got to the part I have quoted I had already read and agreed with a large part of his analysis and had started reflecting on the discussion I had had with one of my very smart lawyer friends the previous evening. The purpose of my blog today is to provide examples that prove Matlosa and Shale's point while also highlighting some of the anomalies in my beloved mountain kingdom.
Sometime in the not too distant past parliament approved salary increases and benefits for parliamentarians, there was some disquiet about the revisions but the debate did not take on the intensity of the Merc issue. The salient points to recall from these are:
- MPs supposedly awarded themselves an 84% salary increase
- MPs supposedly also approved a scheme where each of them was entitled to an interest free loan of M500,000.00
My research has revealed the following:
- assuming 24 Merc E280 @ M445,000 are bought for cash we would spend M10,680,000.00
- if each of the Mercs was depreciated at 20% year, the car would have a value of M227,840.00 at the end of the three years.
- If these Mercs were then disposed as they were this year the lost to the taxpayer would be M227,480 * 24 = M5,468,160.00
Now, lets analyse the loans, for simplicity I am going to assume that the Senator's are not entitled to the privileges that the parliamentarians enjoy. So my figures will be based on 120 MPs.
- if each MP were to avail themself of the interest free loan in the first three months of their appointment then we as tax payer would fork out M 500,000 * 120 = M60,000,000.00
- If was assume that the current rate of interest is 11% with a term of 5 years (expected stay in parliament) then the MP saves M152,272.69 in interest. The formula to calculate this is very simple in excel =(pmt(.11/12,60,500000) *60+500000),explanation offered on request.
- For 120 parliamentarians this figure is 152,272.69 * 120 = M18,272,723.06 this is already way over the cost of the Mercs.
- To make matters more interesting assume that each MP took the money and invested it on the stock market with a 10% annual return and did not touch the money for five years then you get the following picture:
- Value of investment end Year 1: M500,000*1.1 = M550,000.00
- End of Year 2 = M550,000*1.1 = M605,000.00
- By end Year 5 we have = M732,050* 1.1= M805,255.00
- At this juncture the member can repay the loan at one go a keep a profit of M805,255.00 - M500,000 = M305,255.00. Imagine if you were an MP for two consecutive terms!
- Now if all 120 MP were really smart they would then put their earnings together M305,255.00*120 = M36,630,600.00 and use this war chest to prosecute really heavy BEE deals in both Lesotho and South Africa. And they can claim, factually, never to have used public money!
If any of them are astute, which some are, what they will most likely do is use the loan to set-up businesses that will compete with us, the tax payers. They will use our taxes to ensure theirs and their kids advantage. If Lesotho were to put the M60,000,000.00 into Bedco so many lives could be changed, so many families impacted, so many more than 120.
So, if it were you, what would you do? Would you vote against the interest free loan? Would you strengthen Bedco, or would you feather your nest? Remember, you only live once!
Lest I forget the quotation above is from http://www.eisa.org.za/PDF/les2006floorcross.pdf
5 comments:
Fascinating - why do we not see this in the public eye? What happened to Bedco?
Interested Outsider
I am sure that the public eye will eventually get to such stories they probably did when the issues were still topical they are not anymore.
I have not suggested that anything has happened to Bedco, but rather that if it had a cash injection of M60,000,000.00 and used it to discharge its mandate much more could be achieved than by setting aside the money for tax free loans for the legislature.
Ntate
Very interesting. If Lesotho’s small private sector makes politicians more likely to feather their nests, could the argument be made that lesotho needs more democracy, rather than being less suitable for it?
Elections allow us to remove politicians that don’t produce results. All around the world, politicians feather their nests, often openly. In a democratic system, the verdict of the population is listened to – from what ive seen, democracy is simply a process that allows us to continually remove politicians who have become corrupt. It is an imperfect process – corruption and failure rarely seems to lead to instand dismissal, and perhaps the world is too complicated a place for snap judgements to be made. In the case of the UK and the US for example, the populations of both countries rate the Iraq war as probably he most important political issue, and both have been slow to remove the leaders who were responsible for that issue from power.
However, both leaders, despite all that power and political skill (in the case of Blair, anyway), are no under very severe threat – MPs are moving away from them and in fact attempting to obstruct them, and neither will survive the next cycle of elections.
Even if we assume that ALL politicians in both countries are purely self-interested and intent on remaining in power, in a democratic system, this makes sense: self-interested politicians are forced to obey the will of the public (more so than in any other system) so, to hang on to revenue they receive in all kinds of ways from being in power, they must submit to some degree of public will and pressure, or risk losing that revenue, which, as self-interested politicians, they will reluctant to do.
If the public doesn’t want a failed war to continue, it will (slowly) become increasingly impossible to do so. If the public wants its pensioners to have more than M150 a month, then, as election cycles continue, this will change. There wouldn’t have been a pension increase in Lesotho without the elections, in my opinion.
The system can only work with a relatively free press though. Others argue that education is an issue as well – personally I don’t trust such arguments.
The ABC made huge strides in a very short time – they now have five years to make their case across Lesotho – although it is difficult to campaign in the mountains, in five years it can be done. Evidence like that in your article should make the job easier.
These issues go right to the heart of culture and politics in Lesotho, so, more than ever, I must emphasise that I am an outsider voicing my opinion – as always, I am very keen to have it challenged and rubbished!.....
Interested outsider
Morena,
Given the fact that the opposition Leader is not happy with the fact that some of his MP's have taken the interest free loans, what do you think are the chances of those MP's crossing the floor to join LCD ?
A chance of floor crossing exists, but I perceive it to be minimal. I think defectors would "lynched" by the public. The discontent about the current governement is at an all time high.
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