The error was not that the projection of adverse impacts upon the economy was incorrect, but that it did not fully recognise the magnitude of the impending economic disaster.
Now, after only three weeks, it is irrefutably evident that the ill effects of the regulations upon the economy are monolithic in extent, and are set to bring the near-total demise of an economy which had begun to recover from decades of gross mismanagement and abuse.
With lightning speed government’s grievously ill-considered policies to achieve indigenisation and economic empowerment have:
- Almost totally destroyed foreign investors’ interest in the great investment opportunities of Zimbabwe;
- Frozen virtually all external lines of credit which are desperately required to revitalise a constrained money market and, as a result, has intensified the gargantuan inadequacy of working capital for the manufacturing, mining, commercial, tourism and other economic sectors;
- Plunged business confidence (a prerequisite for a virile economy) to subterranean lows;
- Intensified Zimbabwe’s isolation and its international pariah status, negating the significant progress of recent months towards international harmonious relations;
- Motivated many long-established enterprises to give serious thought to discontinuance of operations and divestiture of assets, with the resultant increase in unemployment and exacerbation of the poverty, misery, suffering and malnutrition of a majority of the population.
Speaking to an audience of Bulawayo’s business community, the Minister of Indigenisation and Economic Empowerment Saviour Kasukuwere last week stated that “The Act seeks to correct the economic imbalances that exist in the country as we cannot ignore the reality. We are not against the minority, we are saying let’s open the doors and let’s work together for the benefit of the indigenous people.”
Few, if any, will deny the existence of economic imbalances, and that the many millions virtually outside of the economy need to be accorded opportunities of economic engagement. Similarly, almost all are willing to collaborate and assist in meaningful, substantive economic empowerment for all those able and willing to be economically empowered.
However, even if government is “not against the minority” (and few can give credence to that contention), the hard fact is that the legislation is intensely discriminatory, unjust and oppressive against the minorities. It is impliedly racist; it is prejudicial to those who have energised the economy for decades.
It is constrictive upon those who are not Zimbabweans, notwithstanding their permanent residence in Zimbabwe since birth, or for extended periods, and it is injurious to foreign investors, past, present (and remotely possible) in the future.
Speaking at the same occasion, the deputy Indigenisation minister, Thamsanqa Mahlangu said: “Everyone is in support of the economic empowerment and indigenisation, but some people have expressed concerns on the methods used.” In that statement, he was almost wholly correct, for those who do not support the principle of economic empowerment and indigenisation are a very minuscule number.
However, it is not but “some people” who have concerns on the intended methodology. It is an extremely great number.
It is not only the foreign investors who have substantial investment stakes in the country, or the non-indigenous Zimbabwean business community.
Many indigenous Zimbabweans have voiced like concerns, being fearful that the economy, in general, and their enterprises in particular, will be devastated by the destructive consequences of the proposed indigenisation and empowerment methodologies prescribed by the government.
And many indigenous workers are voicing like concerns, being justly apprehensive as to the future security of their employment.
Government berates the alleged exploitation of Zimbabwe’s resources for the benefit of foreigners and the non-indigenous.
It does so with contemptuous disregard for the immense resources provided to access, beneficiate, add value to and use the Zimbabwean resources. This ranges from provision of capital to technology-transfer to markets access.
It ignores the considerable employment generation, the downstream economic benefits, the direct and indirect inflows to the fiscus, and much else.
And not only is government vitriolically aggressive on the issue of resource utilisation, but it also spuriously calls for “partnerships” between indigenous and non-indigenous. However, it is dogmatically insistent on such partnerships being on the basis of a 51%: 49% ratio. That is not partnership, but domination and subordination!
Equally speciously, some ministers seek to justify Zimbabwe’s land policies, and now its economic empowerment policies, with contentions that no country allows non-nationals to own land or control businesses.
Every economically developed country, whether in Europe, the Americas, and most of Asia, and many in Africa, welcome foreign investment with minimal or no constraints, inclusive of land ownership.
A fortnight ago, on Voice of Zimbabwe, Kasukuwere said the regulations would be “shelved” to enable extensive consultation targeted at enabling development of a dynamic economy. However he backtracked afterwards and persists with the immediate implementation of those regulations.
Undoubtedly Kasukuwere has been pressurised by the politburo, and other political hierarchy who are imbued with ideological rigidity. They should all think again, and instead should focus upon methods which would yield — with justice and equity — real economic empowerment (as will be in part addressed in this column next week).