Zimbabwe’s parliament began a debate (Tuesday) on a controversial bill which, if passed, would effectively give blacks majority ownership of foreign companies, including mines and banks. Some Political analysts have condemned the move, saying it would further deepen the country’s economic crisis. But President Robert Mugabe’s ruling ZANU-PF government says the bill would help stabilize the country’s suffering economy. The government also said the targeted companies are flouting the government’s recent price control, thereby sabotaging government efforts to reboot the economy.
John Makumbe is a senior political science lecturer at the University of Zimbabwe. From the capital, Harare he tells reporter Peter Clottey that the bill would destroy any hopes of the economy recovering.
“First of all, it is another nail in the economic coffin because essentially, it is going to discourage foreign investment, and it is very likely to cause capital flight for those companies that are already established in Zimbabwe because they really have no security of their private property since it would essentially be taken away from them by a stroke of a pen,” Makumbe pointed out.
He said the move would further deepen Zimbabwe’s already stuttering economy.
“Yes, essentially, that is the bottom line because if you look at the multi-national corporations operating in Zimbabwe, they have share holders not just in this country, but elsewhere in the world and the stock exchange does a lot of trade in the form of shares been bought and sold on the basis of the going rate. But if that becomes academic, then you rally have a situation where indigenous people would make use of their valueless Zimbabwe dollars to buy shares of the multi-national corporations beyond the 51%, which would be given to them anyway by the law,” he explained.
Makumbe said friends and partisans of the ruling party would be the only beneficiaries of what some have described as a controversial bill.
“But it is also not going to be just any indigenous person, it would be just like the land reform process, it’s politically acceptable people would be given those companies or those shares in the multi-national companies. And there would be widespread disinvestment,” Makumbe noted.
He dismissed the government’s explanation that the controversial was introduced to stabilize the economy.
“That is a fiction, really. You don’t stabilize the economy by eroding rights to private property, and ownership of any company is a democratic right. It’s also a constitutional right, and it is also the motivating element for any business. But if you are going to erode that guarantee of right of private property by law, then you are going to in fact discourage investment. In fact you are going to cause widespread disinvestment; capital flight would occur at a very high rate,” he said.
Makumbe described as baseless the government’s accusation that the multi-national companies are sabotaging the economy.
“The fascination of that allegation or that accusation is essentially that in the latest operation to reduce prices, the major victims were in fact indigenously owned companies, including state-owned companies. And therefore, it is really fiction to say privately owned companies have been sabotaging the government. The government has sabotaged itself through bad policies. And it has essentially created an environment that is not conducive to business operations. That’s the sabotage, and that has not been done by private companies,” Makumbe pointed out.