Tragic truth behind Indigenisation policy
http://www.thezimbabwean.co.uk
The worst constraints affecting Zimbabwe’s economic recovery continue to be
self-inflicted policies that are still having profound effects on business
confidence. Because political objectives lie behind all the policy
decisions, it is impossible to describe the situation in purely economic
terms.
01.08.1208:41am
by John Robertson
This remains true of the latest policies imposed: huge increases in mining
taxes, fees and royalties, renewed attempts to force non-indigenous
investors, ranging from international banks to neighbourhood nursery
schools, to relinquish 51% of their shares. And now the Draft Constitution
reinforces assertions that the State has the right to evict agricultural
landowners and to deny them recourse to the law.
These moves have decisively undermined any hope of business expansion, job
creation, export revenue growth or capacity improvements that could have
promoted growth, made the country more competitive or improved revenue flows
to the fiscus. Even Zanu (PF) does not deny that this has been the result,
but the party’s officials have resolutely kept the policies in place. The
purpose of the policies, therefore, is clearly much deeper than the widely
discredited hopes that a lucky few beneficiaries of the indigenisation
programme will suddenly become rich.
Very poor dividend prospects and the uncertain futures of the businesses are
now seen to promise nothing but disappointment, so energetic defence of the
policies can only mean that a few influential people are getting something
else they want.
What they want, and what they are getting, is the prevention of any hope of
economic recovery, whatever the cost. And the reasoning: to them, a far
greater cost would be to lose the next election. As an economic recovery
would be fully credited to the MDC, and as that might tip the electoral
scales, all moves toward economic recovery are being deliberately
suppressed.
Tragically for Zimbabwe, the cost has already been staggeringly high.
However, the ruling political class is happy to dismiss the entire topic
with a simple, “Who cares?” response. This is because they have very
deliberately directed all these costs onto the shoulders of the general
population, a population that is considered deserving of both punishment and
contempt because the majority has transferred its loyalty to the opposition
party.
So deep is the ruling political class’s disdain for the population at large,
it doesn’t even pretend to believe its fatuous promise that the painful
costs to everyone will be comfortably offset by indigenisation empowerment
gains. They all know that their promises cannot be kept and they have never
even pretended that they planned to keep them.
However, most targets of the intended deception have understood the real
objectives better than the perpetrators. Every day they receive reminders of
tough conditions that have made them victims, not beneficiaries, and all too
clearly they see evidence of the increasing riches of their oppressors.
While they know that only temporary empowerment will be acquired by very
few, they are also keenly aware that ordinary people will carry the enormous
costs of the privileged class’s ill-gotten gains for years to come.
A few years from now, the ruling political class might well decide that its
dismissal of the masses was its biggest mistake. Ordinary Zimbabweans know
the origins of their handicaps and are measuring the costs a lot more
carefully than are the politicians who are imposing them.
To shake off responsibility, the politicians are much more preoccupied with
placing the blame elsewhere. And they can conjure up myths of sanctions,
drought and regime-change conspiracies as fast as they can use the
party-controlled media to spread their deception.
Evidence that the law is unworkable has accumulated fairly quickly and most
of it can be placed into two separate folders: the evidence that almost
everybody realises it will do nothing whatever to empower the population at
large, and the evidence that the demands of the legislation are in conflict
with many other established and much more important laws.
In particular, it is in conflict with Companies Act, with the Constitutional
rights of citizens and with the obligations of the State to foreign
investors, specially those from countries with which Zimbabwe has signed a
Bilateral Investment Promotion and Protection Agreement.
Parts of the Indigenisation and Economic Empowerment Act are even in
conflict with other parts of the same Act, and also with clauses in the
Statutory Instruments that are supposed to give effect to the Act. However,
a third folder has been filling up with a different kind of evidence.
This does not argue against the claims that the indigenisation law will
prove massively disappointing to those who hoped to get something out of it,
or that the law is already harming the business environment. Instead, this
evidence suggests that from the start, the whole purpose of the legislation
has been to slow, if not prevent the recovery of the Zimbabwe economy.
Zanu (PF) authorities seem to have been happy to see all the various claims
and counter-claims absorbing the energies of non-indigenous company
officials and fuelling the excitement of the less well-informed who have
been deceived into believing that riches will soon flow into their pockets.
But these party officials seem to be getting much more satisfaction from the
powerful evidence that they have achieved their hidden motive: Zimbabwe’s
economic recovery has been scuttled.