Home Politics The Expunct Doctrine - If A President Screws Business He'll Screw Elections...

The Expunct Doctrine – If A President Screws Business He’ll Screw Elections And Democracy

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The Monroe Doctrine was a useful shorthand for telling Europeans to bugger off out of the Americas. That being considered slightly undiplomatic language at the time even if the message was received loud and clear. This site is, of course, of similar global power to the 19 th century United States so we too need to have our simple and easy to understand doctrine concerning foreign affairs. Which is that if a President, or other politician, is willing and able to screw business then he’ll most assuredly go on to screw elections and democracy.

No, this isn’t about the Bad Orange Man even as many would claim that he’s doing both. Rather, our poster child for this is John Magufuli in Tanzania:

Tanzanian government cracks down on opposition after disputed election
Chair of Chadema party arrested on terrorism charges before planned protests

Oh Aye?

Not that “I’m counting the votes so I won” is all that rare an electoral method in Africa but still:

Authorities in Tanzania have launched a wide-ranging crackdown on opposition parties, days after the country’s controversial leader, John Magufuli, was declared the winner of last week’s contested election.

Police detained Freeman Mbowe, the chairman of the Chadema party, on Monday, along with other senior party officials before planned protests against what the opposition claim was widespread electoral fraud.

Tundu Lissu, another prominent leader, was arrested outside a building housing Western embassies in Dar es Salaam, the largest city, where he had sought protection, and released after a police interrogation

Could we have predicted this? Well, using that Expunct Doctrine, yes, we could. For Magufuli, the guy directing the truncheon wielding here, did indeed screw business:

As background here John Magufuli decided to try to shakedown Acacia Mining. They run some gold mines in Tanzania. Some of the gold is extracted as, well, as gold. Given the way this sort of mining works more of it ends up in something called copper concentrate. The Tanzanian gold mining industry just isn’t large enough to make it worthwhile processing that concentrate in country. The much larger and richer industry of DR Congo certainly used to process in country, but it would never make sense to do so in Tanzania, not at these volumes.

So, ship the stuff off to where it can be processed economically. Taxes are payable on the valuable components of that concentrate. This is fine, government should tax – until the pips squeak – the resource rent value. But the estimations of that value do have to be sensible. Which is where Magufuli decided to try it on.

And:

Govt alleges – and a government committee has confirmed via analysis – that Acacia is grossly underestimating gold content of semi-processed ore it exports. Thus a tax bill for 2 centuries worth of gross revenue that Acacia reports.

This is a shakedown by Tanzanian govt. There is simply no way at all that there is the gold content being claimed. Quite apart from anything else, where the hell is the money going? For it’s most certainly not turning up in the company accounts. They’re also flat out wrong on their valuation method. Ore doesn’t pay out for what is in the ore, only for what is commercially extractable. So things like the level of Ytterbium are an irrelevance.

Magufuli screwed the pooch on the mining business. Why would anyone think he wouldn’t at least try the same with democracy? And thus the Expunct Doctrine.

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4 COMMENTS

  1. You do remind me of the offer by the Zimbabwean government of compensation to the dispossessed white farmers.

    I’d argue that the reason businesses don’t invest in Zim is that, after Muggins and his merry men took over, those few reckless entrepreneurs who tried to invest were robbed too.

    The ultimate cause of Zimbabwe’s problems is that, to gain power, Mnangagwa had to offer all of Mugabe’s supporters the same loot as Muggins did. But the economy of Zim simply can’t take it.

  2. It never ceases to amaze me that these tin-pot dictators get away with shaking down huge corporations.

    Wouldn’t it me much, much cheaper just to have them killed? It doesn’t even have to be on the books. I’m sure some of the larger shareholders could afford it from money they found down the back of the sofa.

      • Tinpot dictators are pretty well protected — they have an army after all — and if not well equipped/trained by NATO standards, they’ve still got a lot more firepower than even a ridiculously expensive band of mercenaries. Lets say you do manage to knock off a dictator for $10m in a professional raid. Unfortunately you’ll then end up with another tinpot dictator who will try the same thing.

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expunct

in British English
expunct (ɪkˈspʌŋkt)
VERB (transitive)
1. to delete or erase; blot out; obliterate
2. to wipe out or destroy

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