Zimbabwe law on firms' ownership comes into effect

[jetsetter]

Zimbabwe law on firms' ownership comes into effect
Page last updated at 11:01 GMT, Monday, 1 March 2010
A new Zimbabwean law that forces companies to sell a majority stake in their businesses to indigenous people has come into effect.

Firms worth more than $500,000 (?332,000) run by non-indigenous people have five years to sell a 51% stake, upon the threat of jail sentences.

Harare-based economist John Robertson told the BBC's Network Africa programme that it was "a very bad idea".

He said it would only deter further badly-needed foreign investment.

"The government appears to have no wish at all to make the country attractive to the [overseas] investors," said Mr Robertson.

Government split

The new rule - dubbed the indigenisation law - is seen as an extension of the government's seizure of white-owned farms, which started approximately 10 years ago.

That controversial programme was widely considered a failure, as many of the seized farms have remained dormant.

This resulted in Zimbabwe - once known as the bread basket of Africa - having to become a net importer of food, sparking hyper inflation.

The law on company ownership has further divided Zimbabwe's already strained unity government.

President Robert Mugabe has repeatedly defended the law, saying that firms would be "foolish" not to comply.

By contrast, Prime Minister Morgan Tsvangirai, has rejected the law, saying it was published without due process.

Investment 'needed'

Mr Robertson added that it was likely to have the same negative impact as the farm seizures.

"As soon as the skills are taken away from the businesses they now have their eye on, those businesses will also fail," he said.

He added that far from empowering the wider population, the move would only benefit those individuals that the government appoints to take control of the companies.

The main trade union group, the Zimbabwe Congress of Trade Unions (ZCTU), has also warned that the new law could have negative consequences.

"Although the principle of the law is good, we fear that this could lead to a creation of new minority blacks who will just replace the minority whites," said ZCTU president Lovemore Matombo.

"The law should have not been rushed, we are just coming out of a self-inflicted economic crisis.

"This law could create fears that the process could be chaotic, just like the land reform, which will affect the economic recovery of the country and we do not need this right now as we need investments."

http://news.bbc.co.uk/2/hi/business/8542966.stm

Just another stupid decision by Mugabe and his cronies. And to make everything clear, non-indigenous people = white. This law will damage Zimbabwe's already weak economy.

 

[idk]

Thats racist! :lol:

 

[jetsetter]

Thats racist! :lol:

It is unfortunate. Zimbabwe could have been something greater.

 

[2Billion]

Given Zimbabwe inflation, isn't every firm worth over $500,000?

 

[argatoga]

 

[Cobol74]

They are aiming this at the farmers actually. Zimbabwe went from a net food exporter to a food aid receiver in about 3 years. How not to de-colonise in three easy lessons. . .

 

[wooflepoof]

Man, and "Zimbabwe" is such a cool sounding word too. They shoulda been awesome

 

[tigger]

Just when I thought Mugabe couldn't fuck that country anymore. It's really sad to see a nation with so much potential fall apart.

 

[Pjuske2]

Just when I thought Mugabe couldn't fuck that country anymore. It's really sad to see a nation with so much potential fall apart.

yea but look at the bright side, after this, he can't possibly fucked it up even futher.
it really makes you wish the US would sent some Deltas down there and take out every single living creature in that family!

 

[Cold Fussion]

yea but look at the bright side, after this, he can't possibly fucked it up even futher.
it really makes you wish the US would sent some Deltas down there and take out every single living creature in that family!

It will probably transfer to civil war, so it can get worse.

 

[SeanBlue]

haha the money has an expiration date if u look closely. "30th June 2008"

i love his expression too.

here's to Robert "the law is needed to end colonial-era inequities" Mugabe's 30th year in power /sarcasm

 

[Momentum57]

To: Zimbabwe

Congrats on your isolationism!

P.S. We will be enjoying the 21st century if you need us.

Signed the World

 

[tigger]

yea but look at the bright side, after this, he can't possibly fucked it up even futher.

That's what I thought when I first read about his "land reform" program. But it appears he's found a way to destroy what little foreign investment is coming in as well. Seriously, I imagine there was little economic incentive to go into business in Zimbabwe to begin with. Now there is none, at least for foreigners. And especially for white foreigners.

It will probably transfer to civil war, so it can get worse.

It's certainly possible. Though there is still enough left of the old colonial political institutions (parliament, local authorities, courts ... at least on paper) that civil war could be averted. If Mugabe hangs onto power long enough and loses his grip on subordinates I suppose things could devolve into civil war.

If Mugabe and his ilk were wiped out in one fell swoop, I don't know what would happen. I don't know the situation in Zimbabwe that well. Does the parliament have any credibility? Obviously Mugabe can ignore them.

 

[Pjuske2]

It will probably transfer to civil war, so it can get worse.

Look at it like this, the man is 86 (that's right I checked on wiki) so within the next decade the fool will die anyway, at which point his supporters will accuse the opposition for poisoning him, and civil war will erupt.

EDIT: look at this http://www.cato.org/zimbabwe seriously the excistance of that man is the greatest humanitarian catastrophe in history

 

[h-p]

Mugabe is 86, while the life expectancy in Zimb. is 45.8 years

 

[jetsetter]

Time to step up
Jacob Zuma is hard to take seriously, but his support of Robert Mugabe is a disgrace
From The Times March 5, 2010

It is not difficult to knock Jacob Zuma, the South African President who is visiting London this week. His views on women are disrespectful and his conduct often worse. His igorance on homosexuality and Aids is wretched. Not content with three wives, he was forced to apologise to his nation last month after revelations that he fathered a child with the daughter of a close political ally. But, even if all these character flaws can be overlooked, Mr Zuma?s stance towards Zimbabwe, and its President Robert Mugabe, cannot.

The European Union and the United States have imposed travel bans and asset freezes on Mr Mugabe and senior members of his Zanu (PF) party. Yesterday Mr Zuma asked Gordon Brown to consider lifting them. Mr Zuma?s argument is that economic progress in Zimbabwe is hampered by sanctions, with no corresponding reward. Mr Brown, quite rightly, believes no such thing. The sanctions target Mr Mugabe?s henchmen alone and there is no clear evidence that ordinary Zimbabweans are materially affected. To lift the restrictions now would benefit the very elite whom they have been designed to punish.

Mr Zuma?s plea comes, ironically, at exactly the moment when South Africa is well placed to take a more engaged and constructive role in Zimbabwe. Thabo Mbeki, Mr Zuma?s predecessor, felt unable to take a strong anti-Mugabe stance partly because he faced criticism from the ANC rank-and-file for being too pro-Western. No such political problem exists for Mr Zuma. Nor could Mr Zuma be accused of siding with whites against blacks. Mr Mugabe, now that most white farmers have fled his country, has turned to pillaging the assets of black Zimbabweans.

It is now 30 years since Mr Mugabe seized power, during which time he has personally orchestrated the most dramatic peacetime collapse of any country since Weimar Germany. In 1980 the average annual income in Zimbabwe was $950; in 2008 it was $340. Nine out of ten Zimbabweans are now unemployed. He has been, by any measure, a colossal disaster for the nation that he has led so conspicuously badly.

The latest calamity has been his sleight of hand in the inaccurately named unity Government. Mr Mugabe promised to share power with Morgan Tsvangirai, the Prime Minister, but has made no effort to distribute the top jobs equably. Roy Bennett, one of Mr Tsvangirai?s closest lieutenants, was arrested on trumped-up charges of banditry the day before he was due to be sworn in as a deputy minister ? even though the only evidence against him was repudiated in 2006 for being obtained under torture. Lawyers for Mr Tsvangirai?s office have a list of 184 people, including a boy of 3, murdered during the run-off presidential election in 2008. Mr Mugabe is still the problem.

Three months from now, South Africa will host the football World Cup. Mr Zuma hopes to showcase an efficient, well-run modern democracy. But on South Africa?s northern border, a tragedy is playing out, the victims of which are the people of Zimbabwe. It may be embarassing for an African president to side with a former colonial power against one of its neighbours. But Zimbabwe deserves better than that and more should be expected of South Africa than a well-run football tournament. South Africa is easily the most sophisticated and powerful country in the continent. It is time that it started acting like it.

http://www.timesonline.co.uk/tol/comment/leading_article/article7050415.ece

 

[Aircooled]

Inflation rose from an annual rate of 32% in 1998[85] to an IMF estimate of 150,000% in December 2007,[citation needed] and to an official estimated high of 231,000,000% in July 2008 according to the country's Central Statistical Office,[85]. This represented a state of hyperinflation, and the central bank introduced a new 100 billion dollar note.[86] As of November 2008, unofficial figures put Zimbabwe's annual inflation rate at 516 quintillion per cent, with prices doubling every 1.3 days. Zimbabwe's inflation crisis is now (2009) the second worst inflation spike in history, behind the hyperinflationary crisis of Hungary in 1946, in which prices doubled every 15.6 hours.[87] By 2005, the purchasing power of the average Zimbabwean had dropped to the same levels in real terms as 1953.[88] Local residents have largely resorted to buying essentials from neighbouring Botswana, South Africa and Zambia.

In 2005, the government, led by central bank governor Gideon Gono, started making overtures that white farmers could come back. There were 400 to 500 still left in the country, but much of the land that had been confiscated was no longer productive.[89] In January 2007, the government even let some white farmers sign long term leases.[90] But, the government reversed course again and started demanding that all remaining white farmers leave the country or face jail.[91][92]

In August 2006, a new revalued Zimbabwean dollar was introduced, equal to 1000 of the prior Zimbabwean. The exchange rate fell from 24 old Zimbabwean dollars per U.S. dollar (USD) in 1998 to 250,000 prior or 250 new Zimbabwean dollars per USD at the official rate,[93] and an estimated 120,000,000 old or 120,000 revalued Zimbabwean dollars per US dollar on the parallel market,[94] in June 2007.

In January, 2009, Zimbabwe introduced a new Z$100 trillion banknote.[95] On January 29, in an effort to counteract his country's runaway inflation, acting Finance Minister Patrick Chinamasa announced that Zimbabweans will be permitted to use other, more stable currencies (e.g. Sterling,Euro, South African Rand and the United States Dollar) to do business, alongside the Zimbabwe dollar.[96]

On February 2, 2009, the RBZ announced that a further 12 zeros were to be taken off the currency, with 1,000,000,000,000 (third) Zimbabwe dollars being exchanged for 1 new (fourth) dollar. New banknotes are to be introduced with a face value of Z$1, Z$5, Z$10, Z$20, Z$50, Z$100 and Z$500.The banknotes of the fourth dollar were to circulate alongside the third dollar, which remained legal tender until 30 June 2009.[97]

Sounds wonderful.

 

[darkshark0159]

I'm sitting here with my genuine 100 trillion Zimbabwean dollar note I got on eBay. Good stuff.

 

[jetsetter]

Bitterness and unease in bankrupt Zimbabwe
Page last updated at 12:11 GMT, Saturday, 6 March 2010

After 30 years in power, Zimbabwe's veteran leader Robert Mugabe said this week he was ready to stand for another term as president. BBC Africa correspondent Andrew Harding finds Mr Mugabe's party in angry mood, and others - the white minority and the former opposition MDC party - full of foreboding.

It has been a grey, drizzly week here.

In the wealthier suburbs of Harare, Zimbabwe's shrinking white population is once again feeling nervous.

Pat, who runs a small hairdressing salon, and whose family has lived here for four generations, is finally planning to leave.

They don't want us "whiteys" here any more she says. The writing is on the wall.

Pat has been spooked by a new law, introduced this week, which is supposed to correct the enduring economic legacies of colonialism, and give black Zimbabweans a controlling stake in almost all companies.

The main focus is Zimbabwe's rich mines and its industry.

But the indigenisation law also seeks to prevent white people from owning things like hairdressing and beauty salons.

In a few years, says Pat, we will be like an extinct species. They will come for our houses next.

The reaction may well be extreme.

Many white Zimbabweans have been slow to acknowledge the debt they owe to the black majority here. Economic empowerment is clearly necessary.

But after a decade of economic chaos, horrific violence, and the brutal seizure of white-owned farms, it is easy to understand why so many Zimbabweans - of all colours - are hair-trigger tuned to expect the very worst.

Bitter words

Saviour Kasukuwere does not exactly try to smooth the waters.

"You people," he almost spat at me, as I sat in his office on the ninth floor of the squat grey building that houses President Mugabe's Zanu PF Party.

Mr Kasukuwere used to be a member of Mr Mugabe's notorious state security.

He is a hardliner and a rising star.

"You British, you could learn a lot about democracy from us," he says with a thin smile.

Mr Kasukuwere, a tall, heavy-set man, was at primary school when his country won full independence from Britain 30 years ago.

Unlike Mr Mugabe's generation, he did not fight and suffer for freedom. But, full of passionate intensity, he seems to wallow in his bitterness.

In his eyes, and words, everything can still be blamed on what he calls the "genocidal" West.

Zanu PF's current preoccupation is with what it calls "Western sanctions".

The state media makes it sound like some overwhelming economic blockade.

"Our children are dying because of sanctions," says Mr Kasukuwere.

But as diplomats and economists here point out, the reality is less extreme.

The European Union is currently imposing a travel ban on 198 individuals. Thirty-five companies are also frozen out.

"This is about Mrs Mugabe not being able to shop in Paris," one diplomat put it. "Zimbabwe can't borrow money, not because of sanctions, but because it owes $6bn, and can't pay it back because it systematically wrecked its own economy."

Train smash

Within Zimbabwe's unity government, sanctions are a poisonous issue - one of many.

The unity government, formed after bitterly disputed elections, has survived a year now - President Mugabe's Zanu PF sharing, or at least pretending to share power with its enemy, the Movement for Democratic Change (MDC).

"It's a train smash, warfare every day," one MDC minister told me.

But the government has survived and on some issues is clearly making progress.

The MDC is hoping now to water down the new indigenisation law in order not to scare away foreign investors and potentially plunge the economy back into chaos.

Both parties are now gearing up for new elections - possibly next year. It is the only way to settle Zimbabwe's political deadlock once and for all.

The sanctions issue and the indigenisation law, are key campaign themes for Zanu PF.

If the MDC tries to question either of them - it is accused of being a stooge for colonial Western interests.

The MDC can probably handle that sort of criticism. It has got a strong support base, and at least one recent opinion poll showed it would crush Mr Mugabe and his party at the polls.

Any credit for the economic stability achieved here during the past year, seems to have gone to the MDC.

But the party is not nearly as well organised or ruthless as Zanu PF.

We are floundering, one MDC insider told me dejectedly. And of course, past experience in Zimbabwe shows that elections here are won by intimidation, not popularity.

In 2008, Zanu PF orchestrated a campaign of terror - killing and beating MDC supporters - in order to hold on to power.

Now at the age of 86, after 30 years in office, President Mugabe has announced he is planning to run for yet another term.

Elections could be held next year, he says.

Mr Mugabe controls the police and the army, and under the current constitution, most of the electoral infrastructure.

Will he play fair this time?

We are heading towards another big fight, a senior MDC official told me anxiously.

Unless we have foreign peacekeepers to protect us, it will be another bloodbath.

http://news.bbc.co.uk/2/hi/programmes/from_our_own_correspondent/8551616.stm