Tuesday, May 29, 2007

Zim eyes takeover of all foreign firms

HARARE, Zimbabwe -- President Robert Mugabe plans to seize majority stakes in all of Zimbabwe's foreign-owned businesses in what economists warn could be a repeat of the regime's disastrous land-reform policy.
Under legislation approved by the Cabinet two weeks ago, all companies will be required to give up at least 51 percent of their shares for allocation to economically disadvantaged, "indigenous" Zimbabweans.
There are signs that the government intends to use the laws to attack the commercial interests of countries such as Britain, the former colonial ruler, which Mr. Mugabe accuses of plotting to remove him from power. However, companies linked with friendly regimes, such as China and Malaysia, will be protected....

"The president made it clear, when Cabinet approved the bill ... that the time had come to empower our people," the official said. "He said the indigenization exercise must be undertaken in the same fashion as the land-reform program.'
The minister added that Mr. Mugabe had vowed that "imperialist companies" would be targeted because they had been operating with what the president described as a "sinister, regime-change agenda." ...

Over the weekend, riot police raided the headquarters of Mr. Tsvangirai's Movement for Democratic Change and arrested close to 200 supporters, party spokesman Nelson Chamisa told the Associated Press.
As with the land-reform program, many in business suspect that the real beneficiaries of the asset grab will be Mr. Mugabe's cronies and officials of the ruling Zimbabwe African National Union-Patriotic Front (ZANU-PF) party, who will take control of the companies under the guise of business consortiums.
"Mugabe operates on patronage, and to try to bolster his position, he will hand over these companies to people who support him. He's been threatening it for a long time," said an executive with a major British firm....

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