Zimbabwe’s Discordant
Linkage of Foreign Direct Investment and the National Economy.
By Takura Zhangazha.*
On March 1 and 2 this year, the Ministry of Economic Planning and Investment Promotion held an investment workshop in Gauteng Province, South
Africa. The conference was held under
the theme ‘Realizing Zimbabwe’s Investment Potential’ and was primed to
attract the South African and the broader international business community to invest in our country. It turns
out that the most contentious issue in the aftermath of the conference was that
of the government’s policy of indigenization. This being particularly evidenced
by the public spat generated when the Minister of Youth, Indigenization and
Economic Empowerment, Mr. Kasukuwere referred to statements made by Prime
Minister Tsvangirai at the same conference as being characteristic of a ‘lose cannon’. It is probably not only in Zimbabwe where one minister attacks a
senior member of cabinet with such brazen vitriol, but that is probably a full
indication of how fractured the inclusive government remains.
The bigger issue however is not related to what can only be viewed as a public display
of insubordination by Minister Kasukuwere to the office of the Prime Minister.
Instead it is to query the motivation of the inclusive government, via the
relevant ministry to host an investment conference without being clear within its own cabinet on the short, medium and long term effects of indigenization
of the economy. This is because courting the South African and in the same
process, the broader international business community to invest in Zimbabwe is
obviously a matter that merits a common and collectively responsible investment
approach from any serious government.
There are three quick
probable answers as to why the
government went ahead with hosting this conference regardless of evident policy
disagreements. The first being that the ministry
responsible probably wanted to be seen
to doing the right thing by way of the government work programme. Secondly,
there is obviously an intention by the ministry which is run by an MDC-T minister
to demonstrate its commitment to what has come to be viewed as the ‘best practice’ courting of private-public sector partnerships and Foreign Direct Investment (FDI).
The third reason why cabinet as
a collective and with at least four ministers in attendance agreed to host this
conference is that Zanu Pf probably wanted to prove a particular political
point to both South African business as well as its reluctant bedfellows in the inclusive government. This being
that regardless of the investment conference’s or international capital’s concerns, it was
not going to change its globally controversial indigenization plans. This was a point
made even more poignant by the very Minister Kasukuwere’s very public
insistence that mining giant, Zimplats concede to ceding shares to the
government the same week the investment conference was due to be held.
All these probable and somewhat political reasons are however only symptomatic of a larger problem that faces the ‘matrix’ (to use our Finance
Minister’s terminology) of the state, foreign direct investment and the
national economy. It is functionally an ‘inorganic ‘matrix thus far into the
tenure of the inclusive government. This is primarily because of its heavy emphasis on the
extractive nature of FDI in Zimbabwe without social investment conditionality
on those international conglomerates that are being courted. And this, if one
takes the examples of the diamond mining industry, has been done with what can reasonably
presumed to be collusion between state elites and international mining concerns.
The outcome of these not so clear deals and mining concessions, has been
negligible in relation to progressive societal or public infrastructure impact.
To compound matters further, the inclusive government seems
over-obssessed with public-private partnerships without clearly delineating the
expected broader national development impact of the same. This may be because some ministers are somewhat
overkeen on demonstrating their ability to grasp World Bank or IMF concepts
even where the same said concepts or strategic economic interventions are
inapplicable to our national context or where they have proven to be a failure
elsewhere ( a key example is that of biofuel agriculture in Chisumbanje, which has
been discredited as disempowering to peasant farmers and damaging to the
environment in parts of Latin America).
The inclusive government, particularly the ministries that
are responsible for trade, mining, promoting investment and finance need to learn to drive a much
more transparent and publicly accountable FDI bargain.
Indeed while the national economy has suffered over the last ten or so years
from the flight of investment, it remains necessary that we do not negotiate on
a platform of complete desperation for any sort of investment. Be it from the East
or the West.
A firmer FDI negotiation platform would be strongly assisted if
the government sets out social responsibility frameworks for potential and
current international companies that are in Zimbabwe. This would include making
FDI acceptable where it is linked to the development of public infrastructure
that will benefit not just the military but also our hospitals, transport
networks (especially our national railways) and our education system (with
emphasis on transfers of knowledge to Zimbabweans). And in all of this, our
ministers must be cautious about seeking international recognition merely
because they have come to grasp seemingly complex financial and investment
concepts. They must be more focused on our local contexts when they court
international capital in order that it also finds progressive meaning to all Zimbabweans
and not just those that are in proximity to state power.
Ends//
*Zhangazha writes here in his personal capacity.
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