One would think that a tanking economy and a currancy that is losing half it’s worth every day would bring President Mugabe some sense. I mean, he does have a degree in economics.
But instead of trying to increase the economy by encouraging investment, Mugabe has just decided that all businesses will have to be owned and run by Zimbabweans. And not just ordinary Zimbabweans, but “indigenous Zimbabweans” who are defined as “any person who was disadvantaged by unfair discrimination on the grounds of race before independence in 1980″.
So if you are a born Zimbabwean but of Indian, European or South African heritage, forget it.
Since many of the mining and manufacturing businesses are run by or owned by non Bantu Zimbabweans, South Africans or UK businesses, this means a takeover. And one suspects that what will happen is what happened in the farms that were taken over: No compensation to the owners, and the businesses will be given to (and looted) not by those who can run them but to political cronies of Mugabe.
So if the economy isn’t bad enough, such action will make things worse.
What is not being written about is where China fits in this scenerio.
Will the UK and South African owned mines be essentially taken over by Chinese corporations but having Zimbabweans run them on paper?
Actually, such a scenerio would be bad for the West in many ways, but would help the locals, since the Chinese are notorious in South East Asia for getting the best of a deal and getting businesses to run successfully despite local laws that limited or denied foreign ownership.
For example, here in the Philippines, Chinese traders got around such laws by marrying business minded Pinays, which is why most of our business and politicians have some Chinese ancestry.
And in former white Rhodesia, laws mandated that all stores in tribal areas had to be run by locals, so South African born Indian businessmen found straw men to run their shops. In our area, one such man owned (on paper) thirty shops, and ran them by placing a wife in charge of each store. Yup. Thirty wives.
But realistically, Mugabe is going to be gone in a short time, either from political activity or old age, and the Chinese are not gong to lose money on the deal. Yes, they are still communists, and these communist ties to Mugabe go back 35 years. But the idea of Chinese merchants goes back 2000 years.
The minerals of Zimbabwe the mines are more than gold and diamonds, but include asbestos and Chromium, platinum and lithium, all of which are more valuable in the long run to an expanding industrial economy such as China.