Gillard replaced Australian Labor Party leader Kevin Rudd who was swept to office in 2007 on a wave of popular support but then lost it all by seeking to impose a 40% super-profits tax to be levied on mining conglomerates such as BHP Billiton, Rio Tinto and Andrew Forrest.
Rudd had miscalculated by assuming that average voters would see the tax as hitting only the bottom line of billionaire miners rather than the broader Australian economy. The public saw it as damaging populism.The fall of Rudd should be a lesson to President Robert Mugabe and his cronies who are crafting laws to loot companies under the guise of indigenisation.
The ill-conceived self-enriching measure comes after the disastrous results of the land reform programme that saw the national economy contract by as much as 40%, inflation vaulting to over 231 000 000%, per capita GDP dropping by 40%, agricultural output falling by 51% and industrial production by 47%. Direct foreign investment all but evaporated.
Mugabe clearly refuses to learn from his own mistakes which he touts as a victory for the people of Zimbabwe. He continues to forge ahead with disastrous policies that can only hurt Zimbabweans more. Australians hold their leaders to account when they promise to “soak the rich” in a way that smacks of crude demagoguery and manifestly fails to serve the country’s interests. We should do the same.
Indigenisation is proving a disaster as investors head for the exits while ministers pretend that companies are conforming with the new regulations. But Mugabe and his gang are blind to the danger of killing the goose that lays the golden egg.
Only this week we read in the state media that Presidential Affairs minister Didymus Mutasa made a brazen threat against New Dawn Mining Corporation after it bought an 89% stake in a Zimbabwean mine, contending that the transaction had strategic implications of major national interest. In the process, Mutasa threatened all manner of probes against the investors.
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Mutasa is quoted as saying: “It is manifestly wrong and indefensible for foreigners to play casino with Zimbabwean assets in this way, whichever way one chooses to look at this transaction, be it political, legal, economic or social.”
Mutasa behaves as if he is not part of a government that has spent more than US$30 million on foreign trips trying to lure investors to Zimbabwe. In fact, the claim that foreigners are playing casino with local resources are misdirected because it is the likes of Mutasa and his principals who are playing casino with the lives of Zimbabweans. It is obvious that Zimbabwe needs whatever morsel of investment that comes its way. After all, investors have an array of choices when it comes to committing their resources and at this rate it is unlikely that Zimbabwe will be one of them.
Already Mutasa and his cronies have proved their adeptness at the casino with the country’s diamonds as the Finance ministry has confirmed what everybody suspected, that the diamonds were benefiting only a few well-connected individuals.
We draw comfort from the fact that we are not the only sane voice out there. The Confederation of Zimbabwe Industries shares our view that business is not the enemy of government. CZI boss, Joseph Kanyekanye is quoted elsewhere in this paper as saying; “This (Indigenisation Regulation) did a lot of harm to monies which were coming into the country via the stock exchange. This has dried up and is cause for concern.”
Kanyekanye added: “Suffice it to say that industry is not the enemy of government but rather we complement each other and above everything else we want this country to succeed.”
President Mugabe, like Rudd, is miscalculating by assuming that average voters would see his policies as hitting only the bottom line of business rather than the broader Zimbabwean economy. The public will see it as damaging populism.
