To surmise such incapability or, alternatively, such malicious intention, is inevitable when having regard to recurrent enactment of economically destructive legislation, to the grossly confrontational, endless statements by all of the political hierarchy prior to the “inclusive” government, and to ceaseless reiteration of those statements by those who are elements of that government, but previously held political power exclusively.
No matter how devastatingly disastrous so many of their policies and statements have been, they persist in repeating them, or pursuing similar alternative cataclysmic policies, and endlessly expressing views and intentions which can only devastate the economy further.
Last week this column focused upon the draconian Indigenisation and Economic Empowerment Regulations, gazetted on February 12, pursuant to the relevant Act having been promulgated almost two years earlier, on March 7, 2008.
Although economic indigenisation and empowerment not only fulfills a very long outstanding moral need, and if done effectively and constructively would greatly enhance Zimbabwe’s debilitated economy, that is only so if done justly, equitably and economically constructively.
But that is certainly not the case insofar as the Indigenisation and Economic Empowerment Act, and its underlying regulations, are concerned.
Not only can they not contribute to Zimbabwe’s desperately needed economic recovery and growth, but they are blatantly racist, totally conflicting with the declared intents of Robert Mugabe and his then incoming government at Independence, almost 30 years ago.
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
Although then claiming to espouse racial reconciliation and harmony, peaceful and mutually beneficial co-existence, diverse legislation, political statements, and governmental actions have been at diametric contrast with those commendable intents.
The reactions to the legislation, foreshadowed and feared by the business community, economic analysts, and a very notable majority of the populace, materialised.
Overnight almost all previously expressed interest and investment intents of innumerable potential foreign investors disappeared.
The previously extremely great prospects of massive investment into mining, manufacturing, tourism, and other economic sectors immediately ceased.
All such potential investors were unwilling to be reduced to minority ownership of investments, despite providing the majority of required investment capital, transferral of intellectual property, state-of-the-art technology, and ready access to their markets.
In promulgating the legislation, government in general, and the president and relevant minister in particularly, have stated the intent of racial partnerships.
But partnership implies collaboration and joint authority, and yet government is insistent of indigenisation of each business enterprise being not less than 51%.
That is not “partnership”, but “domination” and “subordination”. In his pre-86th birthday television interview, the president expressed surprise, amazement and disappointment at private sector and foreign investor reactions, saying those reactions were devoid of substance.
He emphasised that contention by saying that a 49% holding constitutes a very substantial and meaningful equity holding. If that is so, why does the legislation prescribe a 51% indigenous holding? (What is sauce for the goose should be sauce for the gander!).
Very understandably, there has been very widespread, negative reaction from all sectors of the business community, including many from all races. Numerous initial public statements have been made by leaders of various business sectors, critical submissions made to the minister in some instances, and such submissions being in the course of preparation by others.
Foreign investors’ reaction has been pronounced, with very many who had had intents of substantial investment, yielding major employment creation, shelving their plans and looking for investment opportunities elsewhere.
It was, therefore, very significant that, on Tuesday last week, the Indigenisation and Economic Empowerment minister stated, on Radio Voice of Zimbabwe, that the regulations were being “shelved”, pending extensive consultations with relevant ministers, including the Economic Development and Promotion minister.
Whilst such “shelving” is partially commendable, it is deplorable that the minister’s consultation intents are restricted to selected fellow ministers.
Surely it would be constructive and realistic also to consult with the various sectors that constitute the economy, and with international investment brokers and advisors, and other relevant, interested parties? Moreover, does the minister intend to gazette the “shelving” of the regulations, failing which the effective date of 1 March, 2010 remains legally applicable?
As abysmally catastrophic as the intended indigenisation is concerned, so too were the president’s pre-birthday statements on Zimbabwe’s farms.
Instead of recognising that the ill-conceived, grossly mismanaged and abused programme of land acquisition, redistribution and resettlement had been a disastrous failure, had empowered very few, and had occasioned a near-total collapse of agriculture, which was the economy’s foundation, the president waxed eloquent upon that programme, and how it had been the forerunner of the indigenisation of the economy.
Instead of castigating the ongoing, unlawful, generally violent, farm invasions, he berated those indigenous as had been accorded farms and were sub-leasing them to evicted, former white farmers.
He did so in complete disregard for the fact that a significant portion of the distressingly low levels of agricultural production emanate from those sub-leased farms.
Displacement of the white sub-lessees will only result in a further decline in production, and increased dependency upon inputs. Concurrently, that reduced production will have further economic downsizing effects, due to lesser inflows to agriculture’s downstream economy.
Between the pursuit of impractical, unrealistic, inequitable and unjust indigenisation of businesses (instead of promoting and facilitating indigenous new enterprise development) and the ongoing tragic and calamitous land programme, government not only continues to promote economic decline, but also wholly alienates critically needed foreign investment, and endangers the recently achieved slow recovery of good and beneficial international relations. The state driven economic destruction rages on!
Eric Bloch
