Friday, 4 November 2016

Work, work, work, work

This wont be an analysis of the lyrical stylings of Riri, but unless you are lucky enough to have access to capital most adults earn money selling their labour, ideas or experience. Unless you are fortunate enough to have a world class talent and live in a country where that talent could earn you a living the prospects for most of us are increasingly looking grim.

The economist Tyler Cowen analyses labour as existing in six dimensions:
  • backs - human mechanical strength lifting, pushing, pulling
  • Fingers - intricate mechanical tasks requiring dexterity printing, weaving, knitting, butchery, 
  • Humans controlling machines doing routine  tasks drilling, driving 
  • Smiles - humans giving other humans pleasure service sector jobs
  • Creative ideas - writing, art, entertainment 
The first dimension of labour reduced in importance due to the domestication of the horse and cow and the first industrial revolution 
Reduced the requirement of human labour for the second. Historically Prof Cowen says the fourth, fifth and sixth increased in value as capital was deployed  to accomplish the first, second and third dimensions of labour. 
The development of robots and artificial intelligence means that the third and fourth dimensions of labour are more effectively performed by machines leaving humans only with the fifth and sixth dimensions of labour where humans hold a distinct advantage. 
Most people earn a living by selling their labour in one of the six dimensions Prof Cowen identifies. What happens when a lot of labour is competing for only a few jobs, the price of labour falls and he early signs of this can be witnessed by the stagnant wages across much of the world. 
What does this mean for Zambia? Most of Zambia's foreign exchange earnings are derived from mining. The mining sector is also a significant revenue raising sector for government in the form of royalties and the Pay As You Earn paid by mine employees.  The mining industry is also defined by low-margins, increasing mechanisation and is in one of the low points of the industry's periodic cycles. On a global scale I don't see another period of explosive growth such as the one seen between 2000-2008 driven by China. The Chinese economy is entering a middle-age of steady but unremarkable growth.  The other large global population and economic centres are unlikely to deliver the growth seen in China at the beginning of the century. Which all makes for a grim outlook for Zambia unless we make more use of the best of our best national resource. Zambia is blessed with a young and energetic population with a median age of 17.2. The national priority should be setting up our young people with an opportunity to make full use of their talents. 

A song of fire and zzzzzzz

I'm a big, big or as Donald Trump would say yuuuge fan of Game of Thrones (thanks Dare for the heads up) and I decided, whilst waiting for Season 7 The Ladies in Charge to read the books. 

I hit up the Amazon store and me being the completist that I am purchased all the books George R R Martin wrote. Initially the spot the difference between the book and the series was fun Theon is a much more shady character in the book better foreshadowing his turn in later seasons. Mr Martin also appears to reveal a great fondness for descriptions of underage...well let's not go there it's a fantasy and he is more than entitled to artistic license. 

In the TV series Ned was portrayed as noble and the only honest man in a den of snakes. In the book nope for me he came across as a simpleton who failed to read the signs and realise despite repeated hints that not everyone was playing by Marquess of Quensverry rules. For the first time ever, I found myself flipping through Ned's sections to get to the characters I enjoyed in the book. Sansa was also such a wet character in the book and it was difficult to see what the actual motivation was to cast her sister to the side for the seemingly perfect Prince Joffrey, we all know how that turned out. 

I'm guessing this is a testament to the skill of the actors and scriptwriters, they've polished on the books narrative structure and rounded out a somewhat bog standard fantasy story and made it sing. 

I was a firm believer in reading the written version to fully appreciate the author's intent. In his case the Game of Thrones show runners have carried the torch Mr Martin lit and ran with it. I'm confessing I won't be reading the rest of the series. Now if only the Kindle had a returns policy. 

Tuesday, 16 August 2016

Kanshi ifintu ni Lungu Zoona

Yesterday the Patriotic Front (PF) candidate Mr Edgar Chagwa Lungu was sworn in as Zambia’s new president defeating a strong challenge from the United Party of National Development (UPND) candidate Hakainde Hichilema who was contesting his fifth presidential election. Despite a narrow margin of victory of about 100 000 votes out of a total of about 3.8 million votes cast, Mr Hichilema’s performance was actually down, the margin increasing from the narrower approximately 27 000 vote margin by which he lost the 2015 presidential by-election caused by the death in office of the PFs first president Michael Sata.
In the approximate eighteen months Mr Lungu has been in office he has faced challenging circumstances, some external and some brought on by his own actions and policies. The wider economic environment has not been favourable to the Zambian economy; the slowing of growth in China which drives the price for commodities has reduced the price of Zambia’s main export which is copper, the decision by the US Federal Reserve to raise interest rates also contributed to a fall in the value of the Kwacha and previous lack of planning by successive governments dating back to UNIP, has led to a power deficit and increasingly frequent instances of power cuts and load shedding. All of these factors have contributed to a slowdown in national economic growth. On a personal level Mr Lungu has been focussed on securing his own mandate and has logically postponed taking a number of difficult decisions. He has continued in the previous PF government’s commitment to infrastructure spending, increasingly financed by internal and external borrowing. The IMF says at the end of 2014 debt as a percentage of GDP stood at 24 percent compared to 15 percent in 2011. The increase in debt reflected issuance of Eurobonds in 2012 and 2014 at 3.0 and 3.8 percent of GDP [IMF country report 2015 ]. The borrowing increased the level of indebtedness to about 31 percent of GDP as of 2014  and has been used mainly to finance an ambitious infrastructure programme which has been stepped up under the PF administration.
Mr Lungu has also had some missteps during his time in office; raising presidential compensation was among his first acts in government, the reversal of the decision to remove fuel subsidies, a lack of communication with the electorate and international community, and a ten-fold increase in the declared assets of Mr Lungu in an eighteen-month period in office. All these contributed to negative perceptions of the PF administration on the highly active Zambian social media and blogosphere. And yet after all these missteps, a poorly performing economy and increasing prices of key commodities, Mr Hichilema managed to take a step backwards.
How did HH and the UPND fail to make the most of an incumbent government experiencing unfavourable economic indicators led by an opponent with significant weaknesses? It is said that incumbents lose elections, the PF government were determined not to lose the election. They exhibited none of the complacency of the Rupiah Banda/MMD administration that lost power to Michael Sata in 2011. Politics is a rough old game and the PF made full use of the power of incumbency. The Public Order Act was used to curtail opposition meetings, the executive was able to retain use of state facilities until three days before the vote and ZNBC lost any pretence of being a national broadcaster rather excelling in it’s true role as the mouthpiece of the government of the day. This is unfair behaviour but politics is the last place one should look when seeking examples of sportsmanship and fair treatment. The PF government as is their right, used all the levers available to them to retain power.
The PF also did a great job of shutting down previous open lines of attack by the opposition; temporary power was procured to reduce the impact of load shedding; the currency was stabilised against the dollar which reduced the pressure on imports in the run-up to the election. The message discipline of the PF was also very good, they consistently undermined the economic record of HH and the UPND by linking him to the disastrous privatisation of ZCCM the former state-owned mining conglomerate. The PF was also very smart in refusing to debate the opposition, denying them the platform and opportunity for the public to view the presidential aspirants on a level footing, cowardly? probably, politically astute? most definitely. There is also a very strong anti-Tonga sentiment that is working against the UPND/HH who are seen fairly or unfairly as a Southern/ Tonga dominated party. Educated and cosmopolitan Zambians have been heard to remark that, “there is no way I can vote for a Tonga” given that Zambia has never been led by a Tonga it is objectively baffling how the Tonga tribe gets such a bad rap. The Zambian electorate is very religious and subtle hints about HH and his commitment to sharing his wealth via a quite brilliant campaign slogan, “sonta epo wabomba”. Directly translated as “show us what you have done”, to a reasonable person that is ridiculous. It is not the job of the opposition to demonstrate the work that they have completed in order for them to be elected to higher office. The genius part of the slogan though is that the average working Zambian supports more than just the immediate nuclear family and HH as an immensely wealthy individual was being challenged to show the electorate who he had helped with his resources, forget the part about Christians doing their god works in private, was this unfair definitely but again this is part of the rough and tumble of politics.
If the UPND is honest with itself, it played a big role in snatching defeat from the jaws of victory. The fundamental aim of a political campaign is to distil the party programme into a simple memorable phrase that can be repeated ad infinitum until there is almost a sub-conscious association between the party, the candidates and its slogan. Think Bill Clinton’s “it’s the economy, stupid”, Tony Blair’s “tough on crime, tough on the causes of crime”, the MMD’s “the hour has come” and even “sonta epo wabomba”. The UPND did not have this, their manifesto has a ten-point plan, all well-meaning and logical to the voter who has the internet connection and time to read what the party plans to achieve in office but I read them and within five minutes I couldn’t tell you what they were. In 2012 Zambia had an electrification rate of 22.1% and smartphone penetration stood at 3% in 2010 , I doubt much of the electorate had the opportunity to read the manifesto.  All of which points to the fact that the UPND did not display a significant understanding of the electorate, the majority of the ten-points in the UPND manifesto address the concerns of the urban elite the manifesto required explanation and discussion and I can bet there weren’t any ten-point plans on t-shirts in Lusaka. Contrast this with the PF which effectively said to the electorate ‘we have been building roads, hospitals and other infrastructure and will continue to do so’ in a pithy three-word slogan and in a local language to boot, all subtly messaging we, the PF, understand the man in the street we don’t need ten-point plans available online. This election like other elections recently that Twitter and Facebook are not countries they are self-selecting slices of countries and of people who largely share the same views, background and biases.
All of which points to a poorly organised campaign with poor messaging by the UPND, the presidential count was much closer than the parliamentary count. According to the most recent unofficial estimates the PF has unofficially approximately 100 of the 156 MPs giving them a super-majority in parliament. The abuse of the Public Order Act no doubt didn’t help the UPND organise at a constituency level but the MP tally should have been much, much closer given how tight the presidential vote ended up being. The big gamble taken by HH and the UPND was to accept disgruntled ex-PF and MMD members and give them prominent roles in the hope that they would dent the PF’s performance in their Northern, Luapula and Copperbelt strongholds, anyone familiar with the local political scene can list chapter and verse the negatives of the UPND running mate selection, the former MMD president and others. The newcomers were given prominent positions shunting aside long-time UPND members, most people apart from political obsessives are too busy leading their lives to pay attention to the daily machinations of politicians. The willingness to accept any individual that would help get the UPND into power indicated a willingness to do whatever was necessary to win, principles notwithstanding. This may have played a role in the relatively poor performance in the urban centres where the economic hardships were being most keenly felt. The UPND ticket made the contrast less clear between them and the PF ticket and in the end it seems that voters preferred the known over the unknown.
As of now there is a petition being put forward, which will only please the lawyers on both sides, by the UPND contesting the result and given the history of previous electoral appeals it will be time-consuming and will not achieve anything of note. The UPND and HH need to have some serious introspection to drill down to the reason they have failed to convince the electorate.

For the country the way forward is not clear, the fissures opened during this election highlighted by the violence and increasing tribalism will take a concerted leadership effort to heal. For the next five years Zambia has in effect returned to one-party state the PF will now be able to carry forward its agenda unrestrained by the need to win the argument in parliament. This is what the majority has voted for and their wish should be respected, hopefully the incoming Lungu administration will not forget that though they won they have to govern in the interests of the whole country including the 49% who did not vote for president Lungu. The global economic forecast increasingly looks gloomy and the IMF is waiting in the wings to administer some tough medicine. I hope for everyone who loves Zambia that the electoral results give us a government capable of navigating the coming stormy waters and hopefully some good luck in the coming years because it looks like we will need it.

Teach a man how to fish

“Give a man a fish and you feed him for a day. Teach him how to fish and you’ve fed him for a lifetime.” School is where society teaches its citizen’s how to fish, in the UK and England in particular the state provided sector hasn’t been doing too well in its stated aim. If the measure of success is in the proportion of state-educated citizens in the most prestigious and influential roles such as politics, law, media, culture and business.
The recent furore whether the government should reintroduce grammar schools is very interesting especially as a parent. For those who may be unaware as best as I can understand it the UK educational sector has two main classes of providers. The state provides education through faith schools, academy schools, free schools, local authority controlled comprehensive schools and a few grammar schools. The private sector is the other main provider via what are confusingly called public or independent schools which are fee-paying.
In terms of numbers, there are roughly half a million private-sector educated pupils versus 8.56 million educated by the state. In my time in the UK, thirteen years and counting on and off, I have observed that the upward rise on society’s greasy pole after A-levels usually includes passage through the Russell Group universities. The Russell Group of universities are the best teaching and research universities in the UK. Even within the Russell Group there is another hierarchy atop which sit Oxford and Cambridge. Graduation from a Russell Group university lowers the barriers to entry to the top of the main professions in society.
The financial crash of 2008 has caused British/ UK society to pause and look at itself in the mirror, and the picture is not rosy. An increasingly unequal society where your chances in life are more directly related to the status of your parents and where those at the bottom see their chances of rising to the level their ability will allow by student fees and unpaid internships for entry into the more prestigious and influential professions. Social mobility is a two-way street and those at the top are prevented from falling down by low taxes on capital, which allow the benefits of inherited wealth to continue compounding, and well know humans are not good at acknowledging the power of compound interest.
For society to function well it needs those two well-worn metaphors, the carrot and the stick. The carrot that regardless of your starting point in life anyone can make it to the top on the strength of their ability and the stick that if you don’t play by the rules there will be a swift levelling action administered by the legal system. If that doesn’t happen or is seen to happen the ties that bind a nation together begin to weaken and fray.
The new Conservative government of Theresa May has talked the talk in addressing the lack of social mobility in the UK and one of the first policies that has been floated has been the re-introduction of Grammar schools. Grammar schools are academically selective schools that take the best applicants at the age of eleven or mostly in Year 6 of primary education. Given that the children who are likely to excel at exams at such a young age are a self-selecting group of the academically engaged, those with interested (pushy?) parents and those who are genuinely academically talented, the results for entry into the elite universities and Oxbridge are impressive.
Funnily enough the biggest pushback to the proposed policy has been from commentators at the liberal end of the spectrum who cite research that Grammars neither raise standards across the state sector nor do they help poorer students. The research, from what I have seen, is based on the current system where there are a less than 170 Grammar schools which are concentrated in a few counties in the whole of England.
That does not seem a fair comparison, everyone knows where the grammar schools are and parents trying to give their children the best chance in life have done everything in their power to ensure their offspring get in, tutoring, buying houses in good school-catchment areas and discovering a long lost faith in Christianity to get their children in faith based schools or Grammars. The private sector despite having a majority of independent schools classified charges very uncharitable fees which the majority of parents cannot afford. The effect is that the areas with good state schools are self-selecting for parents who are unable to afford private sector school fees but can either afford to buy a house within a good school catchment area or meet the mortgage payments required, either way poorer students are not getting a look in. In 2012 and 2015, the counties/boroughs with the best state schools included Kensington and Chelsea, Hammersmith and Fulham, Richmond on Thames and Westminster. Hardly areas that are scenes of social deprivation, which shows that the current system is a selection by ability to afford housing in good areas.

I don’t see any harm in government trying to improve social mobility, the system as it currently is fails those unable to afford expensive housing. The current comprehensive education system has the sheen of fairness while those who can afford to, game the system. An academically selective option in education is at least honest about how it goes about selecting the future leaders of tomorrow. Currently the doors of opportunity are slowly closing to those at the bottom of the socio-economic ladder and no amount of virtue signalling from commentators will help those at the bottom have a better shot at occupying the same lofty positions that commentators have.

Sunday, 7 August 2016

Weak links and star power

Malcolm Gladwell is a genius, he doesn’t need me to say it, it is a well known fact. I have followed his work from his New Yorker columns to his books; Outliers, What the Dog saw, The Tipping Point, Blink . As a reader you get where I’m coming from, I am a big fan and supporter. He has recently launched a wonderful podcast titled Revisionist History, I can describe it as an audio version of his New Yorker magazine columns. Each week he takes a topic and in his own unique style comes at it via an interesting perspective to engage the listener in exploring an unfamiliar topic. Revisionist History recently tackled the topic of America’s higher education in a three-part series and how it plays a role in the increasing inequality and lack of social mobility in American society.

In the conclusion to the series titled “My Little Hundred Million” he introduces the story of an engineering entrepreneur, Henry “Hank” Rowan who began the trend of large charity gifts to educational institutions. Hank Rowan donated $100 million dollars to a small public university in Glassboro New Jersey (my first time hearing of the town too!). The podcast goes on to highlight the increasing trend for ever larger gifts to university and college endowments. Endowments are giant pools of money invested on behalf of universities, the interest on this capital is then able to meet ongoing operational costs. The contrast is that Hank Rowan’s gift was to a small publicly funded university, Glassboro State College, but the largest donations now increasingly go to the richest and well known universities in the American collegiate system, the very institutions that need it the least. This is all to draw a contrast between two fundamentally different ways of looking at how improvements in living standards or innovations occur.

The question explored on the podcast is this, are innovations driven by a few individuals or are they more a series of incremental iterative improvements? The question is further explored using football (sorry, soccer for any US based readers!) and basketball as examples. A poorer player has a greater impact on a football team than on a basketball team.

Though there are a few times when he has done it, good as he is Messi rarely picks the ball up from the keeper and dribbles through from end to end to score. He relies on Claudio Bravo to keep the goals out, Pique and Mascherano to mark opposing strikers, Jordi Alba and formerly Dani Alves to patrol the wings, Busquets to keep the midfield under control, Iniesta to combine with and provide through-balls, Neymar and Suarez to occupy defenders, create and finish chances. All of that is to say that a star footballer is a highly valuable part in an inter-related machine. A poor player will have a grossly outsized impact on team performance, and no don’t mention the fact that Djimi Traore and Igor Biscan have Champions League winners medals.

Basketball in contrast is a star-players league a super-star who can play both defence and offence can literally bend the game to his or her will. I challenge you to name the other starters with Lebron James in the 2015 NBA play-offs, and he took what was a historically great Golden State Warriors team to six games despite losing two of the team’s likely starters. What does this all have to do with innovation, inequality and development?

If you want to improve your football team, as a team owner you get the most benefit by each year replacing your worst player, strengthening your weakest link, rather than seeking to upgrade your team’s superstar. In basketball the focus is to make sure you get and keep the best available superstar on the market that year, which is why the Golden State Warriors are the book makers favourites for the regular season record.

Well, if you believe innovation is similar to basketball, then the focus will be on the best universities which is why Harvard has a $36 billion endowment and Stanford has $22 billion. These are incredible sums of money, I come from Zambia, a nation of 13 million souls and the total amount of goods and services produced in the country in 2015 was still less than the amount of money Stanford has to invest. Leaving aside what that fact may or may not say about the utility of GDP as a statistic, the crazy part is that these universities who need it the least keep getting more and more and more. Bear in mind that these universities already have some of the lowest applicant to acceptance ratios in the world and are not demographically reflective of their societies. Is this really the best use of philanthropy, to help the few and already advantaged?

Hank Rowan in his original $100 million dollar donation saw the development of skills, innovation and industry as a weak-link problem, like a football team he wanted to put his money to use where it would have the biggest impact. Judging by the lovely song sang by the Glassboro State College students at his wake, he did just that.

Cogito ergo sum

The internet is the brain of the world, sooner or later it will contain the vast majority of the world’s information. I am arrogant enough to think that my periodic musings deserve to be recorded for posterity in the great cloud based memory bank in the sky.

I will record some of my thoughts on subjects that interest me and that I think deserve a wider audience, can’t say much fairer than that. There will be very little personal stuff as that is best left dealt with in “meat-space”.

In an incomplete declaration of my biases, I am Zambian, an engineer by training and I work in the energy sector. Given the ease of access to information online, let the record show that these posts are mine and mine alone and do not in any way shape or form reflect the views of any of my current or previous employers.