Mugabe’s Arbitrariness Drives Out Foreign Investors

Perspective|
By John Chimunhu|
Dictators do not like to admit that there is something inherently wrong with total control. Yet the results of despotic rule are there for all to see: political turmoil, economic ruin, social collapse and, eventually, the need by tyrants to assert control through violence, wild promises, and an awful lot of lies.
Zimbabwe is going through the motions of adjusting to another rigged election. The government has spent millions on celebrations and activities to mark Robert Mugabe’s ‘victory’. Politically, it seems, there is an acceptance of the inevitable, that Mugabe and his destructive, vindictive lot will be in power for the next five years, at least. Even the blundering MDC-T leader, Morgan Tsvangirai has abandoned his unrealistic calls for a re-run of the election, leaving Mugabe in charge.
Yet, despite the hype in the state media patronised by Zanu PF, on the street there is evident panic. According to reports from refugee officials in neighbouring South Africa, thousands of Zimbabweans have fled to that country since Mugabe was proclaimed winner of the deeply flawed July 31 vote. Many of the escapees cite threats of violence, arbitrary arrests and uncertainty over the economy under Mugabe. The country is already suffering from 96 percent unemployment and torture in detention is standard for anyone deemed to be an opponent of Zanu PF.

Market Chaos

What is happening on the street is just a microcosm of what is happening in the marketplace. But instead of being shocked into corrective action by the flight of capital on the Zimbabwe Stock Exchange, Mugabe’s officials have started furiously spinning the line that the loss of $2 billion on the exchange in less than two weeks is a result of Western sabotage of the ageing despot’s victory. Whichever way you look at it, the loss of half the bourse’s $4.5 billion value in such a short period should have triggered a proper enquiry, along with genuine assurances that investments were safe in Zimbabwe. Instead, what we get are daily threats by Mugabe to expropriate private businesses emanating from countries that have imposed sanctions on him and his inner cabal.

Expropriation

If anyone doubted Mugabe’s threats to seize foreign businesses by hook or by crook, just look at how they degraded the Toronto Stock Exchange-listed New Dawn’s mining assets in Zimbabwe. New Dawn owns 85 percent of the ZSE-listed Falcon, which wholly owns Dalny Mine in Chakari, near Kadoma. Over the last two years, the government has refused to approve New Dawn’s indigenisation plans and Zanu PF officials, including vice president Joice Mujuru, empowerment minister Saviour Kasukuwere and former Chakari MP Zechariah Ziyambi have demanded that the mine be handed to them. In March, the Zanu PF officials instigated a strike at the Dalny mine, prodding the 900-strong workforce to demand higher wages amid falling global gold prices. The rhetoric spewed by some workers during the damaging strike clearly showed there was a hidden hand behind the unrest. While claiming they were poorly paid and could not make ends meet, the workers also claimed they could raise the millions of dollars required to run the mine.
Despite regular, unannounced power cuts, power utility ZESA threatened to disconnect the mine over unpaid debts, leading to its closure August 30. Instead of assisting New Dawn, the government let the mine close, thrusting nearly 1 000 onto the jobless heap. Many would naturally be surprised that a so-called peoples’ government could allow that to happen. Those familiar with Mugabe’s crudely practical modus operandi know this is all part of a plan to rid the country of all those he considers enemies, including workers cushioned by foreign employers. It happened on the farms, it is now happening in the mines and factories. And all the world can do is watch this unfolding destruction of the only remaining viable sector of the economy, after agriculture and manufacturing were destroyed through Mugabe’s reckless policies. What we are likely to see now is the wholesale plunder of all targetted businesses by elite officials claiming to save the failing businesses. Its a straightforward hit: deny a foreign business an indigenisation licence and when it fails to raise capital from a jittery market, take it over, in the name of indigenisation!

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