Wednesday, 20 June 2012

Review of Government and Business 'Relationship' Urgent

 Review of Government and Business 'Relationship' Urgent.
By Takura Zhangazha*

In the last fortnight there have been a number of media reports on the non-transparent tendencies of stakeholders in the banking and fuel procurement sectors of our national economy. These media reports indicate that due to a patent lack of transparency and accountability, the country is now faced with a new  crisis with some banks as well as a potential fuel procurement scam that if unattended to, will affect petrol and diesel supplies into the country. It would have been expected that government would have immediately announced an investigation at the highest level concerning to not only these two matters but even others that have been reported on in the media.

As it turns out, the government may not be taking these issues as seriously as one would expect. This even after the now embarrassing debacle that appears to be the Essar and Green Fuel investment projects that cabinet is said to be reviewing.  The reasons for such an ambivalent approach by the state to matters of serious national concern are generally given as the 'unworkable' and difficult relationships of the parties that comprise the inclusive government. But on the emerging scandals concerning the credibility of our banks as well as the procurement of fuel, this reason is thoroughly inadequate and democratically unacceptable.

The gravity of the economic challenges that are apparent for some people and businesses that are currently unable to access their savings due to the challenges of some of our banks and the serious hints at shady deals around fuel supplies did not emerge out of the blue. They are most likely the culmination of lack of serious government oversight into these sectors (and probably others) in the last four years.  Unfortunately it however appears as though this lack of serious oversight on the part of government is not merely due to a lack of capacity but may now increasingly be telltale evidence of a potentially unhealthy relationship between government and our own version of 'big' business.

The symptoms of this unfortunate state of affairs have been glaring. In the last year or so there have been many reported stories concerning various state related entities or crucial services and the dubious transactions that have taken place under the watch of government. These transactions have ranged from the controversial involvement of the National Social Security Agency (NSSA) with various banks and trusts, the 'prematurely' granted Essar-Ziscosteel deal, the  bio fuel project in Chisumbanje and of late the recent problems at Interfin and Genesis banks.  In all this one cannot avoid the rumours that some of the companies and concerns that are now under the spotlight are suspected  to be politically connected to one party or the other in the inclusive government. Moreover there are whispers that some senior government officials have or had direct business interests in some of these and other related commercial entities, a matter that can only leave a sour taste in the mouth.

Given the foregoing, it is necessary that there be an urgent but independent review of the relationship between various business interests and the state as well as individual political leaders in government. The necessity of such a review is premised on the democratic importance of ensuring that both business and the state are accountable to the people of Zimbabwe as well as to stem the rising 'mafia culture' that seems to be defining state-business relations.

Further to this, the review would enable our country's 'big' businesses to revisit their operational ethics and values in order not only to adhere to them but to improve on them urgently. The inclusive government must also revisit its approach on its interactions with local and international capital. As regards the former, government must insist on an understanding that a business concern is not just about personal aggrandizement. Its primarily about innovation in the supply of goods or services in the greatest public interest of the country.  This would assist in combating the murky culture of opulence amidst poverty that has been demonstrated by some of our prominent business persons and sad to say, most of the members of cabinet.

Finally, and in aide of emphasis, the collusion (if any) between government and prominent commercial concerns is undemocratic and prone to high levels of corruption.  It is also dangerous because when elites with political power and those with access to resources have fingers in both pies, it leads to the creation of a 'mafia' that may, with time, be impossible to bring to account.

*Takura Zhangazha writes here in his personal capacity,

Thursday, 14 June 2012

Profit, Public Interest and Zimbabwean Business.

Profit, Public Interest and Zimbabwean Business.

By Takura Zhangazha*

A good friend of mine who is a business entrepreneur recently sent me an email to advise that he takes serious exception at my usage of the term 'comrade' in referring to him. The reason he gave for his umbrage with the title is that he finds the term archaic and reminiscent of what he calls the failed project that was socialism. He also added that, as a businessperson, he also felt that it does not reflect his own liberal  ideological persuasion and that in any event, its a term that is 'bad for business'. It was a brief conversation that brought a number of issues to my mind concerning the values and principles that drive what remains of Zimbabwean business. Particularly so when the corporate world interacts with the government's controversial policy of indigenisation, our virulent nationalism, contested elections and the uncritically celebrated policy frameworks of public-private partnerships. But in direct relation to the brief conversation I had with my colleague concerning 'comradeship' and business, I am persuaded that indeed the profit sector of our society has a key role to play in building a better economic and development paradigm for Zimbabwe. Both within the present and for posterity.

This is an argument that I premise on the fact that our commercial, trade and industrial corporations have an obligation to reflect on the role that they expect themselves to play in relation to acquiring profit while ensuring that it is in tandem with the broadest public interest. Such a combination of the pursuit of profit in a manner that is concomitant with Zimbabwe's best 'public interest' will not only lead to a much more symbiotic relationship between business, the state and society but one that will also benefit  all stakeholders.  It would however be necessary to explain how the relationship between business and the public interest would initially interact and perhaps in the process establish a new democratic 'comradeship' between the state, business and the Zimbabwean public.

The debate about the role of business, profit and the public interest is now a global one. It is generally characterized by prescriptive frameworks emanating from some of the worlds liberal think tanks as well as global institutions such as the World Bank and the International Monetary fund (IMF). It is also a debate that has been characterized by the failure of African governments together with African businesses by being poor  and weak negotiators as to the contextual relevance of some of the prescribed solutions to the development challenges of the continent.  Zimbabwe specifically has not been an exception. The economic crisis of the last 15 years has been a direct result of the combination of an undemocratic government system as well as an increasing one sided and 'extractive profit' motivated integration of our country's businesses/resources into the global economy.

 These developments were against the backdrop of the fact that we took to World Bank sponsored economic structural adjustment progammes  like ducks to water without checking the depth or width of the pond. And it appears we have never really sought to re-examine the same today. What we have had, on the part of both government and business, is the continued acceptance of macro-economic frameworks from the World Bank and IMF that short-change the national economy with the latest such initiative being an unexamined and haphazard outsourcing of state functions for profit via opaque and essentially symbolic public-private partnerships.

In such a context, the challenge of defining a progressive role for business in Zimbabwe is not so much an ideological one. Instead it is a challenge that is more to do with how business approaches its legitimate profit interests when juxtaposed with the public interest. While the primary function of business is to provide goods and services for a profit, in Zimbabwe's case it is also important that there be benchmarks on specific goods and services that are related to the right to life of all citizens. Examples of these  rights include those such as the right of all to education, freedom of assembly, freedom of expression and the right to property. It is necessary that business and the state establish baselines as to how profit must not only be viewed in individual corporate monetary acquisition terms but in relation to the direct public benefit for broad Zimbabwean society.

This would mean that it would not be permissible for a health related business to seek to make super profits at the expense of the important right of all to access health services. The same can and should be argued in relation to the right to own property, wherein, no business should be permitted to acquire, for example, large tracts of land from communal areas at the expense of the communal farmer. To establish such a baseline, it would be advisable for the state and the corporate world to establish a Zimbabwe Business Charter, that would outline democratic principles and values of the profit making or seeking  sectors in the country as well as their interactions with foreign direct investment.

It would then be imperative that government and business frame their interaction with global capital on the basis of a combination of opportunity and mutual benefit to both the businesses concerned as well as the people of Zimbabwe.  Such a charter would therefore entail the specifications of how foreign direct investment must be handled in a manner that allows the development of our dilapidated public infrastructure, a deliberate transfer of knowledge to the people of Zimbabwe and the protection of our environment.

Finally, this new business charter would incorporate the basic understanding that while businesses are indeed about profit, they must also be about innovation and its relevance to the society in which they operate. This innovation would entail exploring new ideas and methods of doing business in a socially responsible and beneficial way. It would also relate to not merely seeking to mimic business practices in the north, but more of learning form the experiences of others, contextualization of the knowledge acquired and applying any new business ideas within the context of not only profit, but commitment to the improvement of the lives of the people of Zimbabwe.

*Takura Zhangazha writes in his personal capacity. (