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Hundreds of British businesses are facing potential expulsion from Zimbabwe after President Robert Mugabe laid down plans to seize majority stakes in all foreign-owned companies in the country.
The companies, including Barclays, Standard Chartered and BP, have started drawing up contingency plans, following news that Mr Mugabe's cabinet is considering pushing through dramatic legislation aimed largely at companies linked to Zimbabwe's former colonial ruler.
Experts have warned that the plans could be catastrophic for the country, which is already facing hyper-inflation and a shrinking economy.
The legislation, approved by the cabinet and now before parliament, will demand that all companies give up at least 51pc of their shares in their local businesses to "indigenous'' Zimbabweans. Insiders thought originally that the law would apply only to mining companies - similar to black empowerment legislation in South Africa - but it is now being aimed at all foreign companies.
One minister has claimed that "imperialist companies'' are being targeted for supporting a "sinister, regime-change agenda''. Banks are also being picked out because they are regarded as having "sabotaged'' the country's controversial land reform plans by refusing financial support to black farmers.
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It is thought that the government will take measures to protect companies linked to the country's friends, such as China and South Africa.
The minister said: "The president made it clear, when cabinet approved the bill, that the time had come to empower our people. He said the indigenisation exercise must be undertaken in the same fashion as the land-reform programme.''
There are still several hundred UK businesses operating in Zimbabwe, despite the fact that the threat of this legislation has been hanging over them for a number of years. Now, however, with the Mugabe regime ever more desperate to cling to power, it is thought to be keen to push through the scheme. The UK businesses include Anglo American, British American Tobacco and Unilever. Other companies such as Lonmin have sold off their interests to locals.
Rio Tinto still has some diamond mining interests in the country, though it has scaled back its operations recently. Aim-listed Mwana Africa mines for gold, nickel and diamonds in Zimbabwe.
BAT has had offices and a processing plant in the country for nearly 100 years, though it has also cut back its operations. BA flies three times a week to Harare.
Because many of these companies' histories date back to early colonial days they are especially vulnerable to nationalist rhetoric.
Britain remains one of the largest suppliers of goods and services to Zimbabwe and is still one of the largest investors, although the Foreign Office says these flows have dropped recently "owing to the current unstable economic and political situation".
Trade has declined from UK exports of £78m in 1998 to £34m in 2002, while exports from Zimbabwe have declined from £123m in 1998 to £86m in 2002.
The UK remains Zimbabwe's most favourable trading partner, with a significant deficit in the African country's favour.
Many believe that if the Mugabe regime enacts these changes it could be the final crippling blow for the economy, as countries including the UK cut their economic links with Zimbabwe.
They fear that the biggest beneficiaries would be the president's cronies within the ruling Zanu-PF party, who largely benefited from the farm grabs under land reform.
Mr Mugabe first suggested the move in 2000, at which point Peter Hain, Foreign Office minister responsible for Africa, said it would "risk bankrupting the country".
However, the growing financial links with China are likely to have increased Zimbabwe's confidence about breaking its connections with Western partners. China has signed a number of key deals with African nations for mining rights and building contracts. According to the World Bank, China last year spent more than $10bn on infrastructure projects in Africa.
Zim Online
Tuesday 29 May 2007
By Patricia
Mpofu
HARARE - Zimbabwe Industry and International Trade Minister Obert
Mpofu on
Monday told ZimOnline that President Robert Mugabe's government was
determined to compel foreign-owned private businesses to cede controlling
stake to local blacks.
"It is government policy that we have to
indigenise all foreign-owned
companies. Our people need a stake in the
running of our economy," Mpofu
said when asked to confirm whether it was
true that the government was
planning to force private firms including banks
to sell controlling stake to
black Zimbabweans.
Foreign-owned firms
have remained jittery since the government first
announced about two weeks
ago plans to enact an Indigenisation and
Empowerment Bill to force them to
sell majority stake to black Zimbabweans.
But many were also optimistic
Mugabe would not order them to surrender
controlling stake to blacks with no
experience or financial resources,
especially after the disastrous
consequences his seizure of farms from
whites to give to blacks has had on
food security and the economy in
general.
A draft mining law to force
foreign-controlled mining firms to cede stake to
blacks that the government
has held back for the past two years was also
another reason for many to
think it would not follow through on plans to
compel private firms to sell
shareholding to indigenous Zimbabweans.
Mpofu said the government was now
looking at the "nitty-gritties" of how
financing would be raised for blacks
to take control of foreign-owned firms
as well as the issue of availability
of skills among blacks to run the
businesses.
"Those are the
nitty-gritties that we are looking into now," he said.
News that the
government plans to follow up farm redistribution by forcing
private foreign
shareholders to sell stake to local blacks is surely going
to scare foreign
investors away and make the few still running businesses in
Zimbabwe to
reconsider whether or not to pull out.
Zimbabwe, which was once a
regional breadbasket, has battled acute food
shortages since 2000 when
Mugabe began seizing commercial farms from whites
to give to blacks,
crippling the mainstay agricultural sector.
Farm seizures also had a
knock-on effect on industry which depended on
agriculture for orders and
inputs and has operated at below capacity since
2000.
Zim Online
Tuesday 29 May 2007
By Edith
Kaseke
HARARE - President Robert Mugabe's government will shortly gazette
a law
allowing locals to own majority stakes in all businesses, as part of
Harare's
controversial indigenisation drive, but analysts warned that such
plans will
further worsen an already hemorrhaging economy.
Zimbabwe
is facing its most severe economic crisis since independence in
1980, which
economic analysts say has been accelerated by Mugabe's seizure
of
white-owned farms for blacks and in the process stoked widespread food
shortages.
But the veteran leader, who has pursued controversial
economic policies
since 2000, has indicated the government wants all the
country's resources
in the hands of majority blacks.
The
Indigenisation and Empowerment Bill is expected to be tabled in
parliament
next month and will among other things compel businesses to sell
51 percent
of their holding to locals.
"This has serious consequences for the
economy and if you look at the skills
base it is shrinking, so you ask who
will be able to manage these
businesses," John Robertson, a Harare-based
consultant economist said.
"But nothing makes sense anymore and what I
can only think is that this is
part of the government's patronage system to
reward supporters. It started
with the farms and now because there are no
more farms to give they have to
look for other opportunities," said
Robertson.
The southern African nation's economic crisis has seen
inflation
accelerating into hyperinflation territory and last month rose by
100
percent on a monthly basis, pushing the annual figure past 3 700 percent
while unemployment has surged above 80 percent.
The economy has
shrunk by 35 percent in real terms since 1999 and is seen
contracting
further without tight monetary and fiscal policies.
The crisis has
heightened political tensions and led to clashes between
opposition
supporters and law enforcement agents, while government workers
have
previously downed tools to press for better wages and working
conditions.
There are still dozens of British and South African-owned
companies
operating in Zimbabwe and Mugabe has on numerous occasions said it
was out
of the benevolence of his government that British firms had not been
seized.
But he has threatened to seize the businesses for what he calls
London's
continued interference in the country's domestic
affairs.
Some of the top British companies include London-listed resource
groups Rio
Tinto and Anglo American and financial institutions Standard
Chartered and
Barclays Bank.
British American Tobacco, which once
ranked Zimbabwe among its lead growers
has dramatically scaled down
operations in the country while Rio Tinto sold
its gold and nickel mining
operations to local subsidiary RioZim in 2003.
On Sunday, Barclays issued
a statement saying: "We are assessing the
potential impact of the proposed
legislation on our business in Zimbabwe. It
is early days and the proposed
Bill may not become law."
Political analysts said the latest move could
further compound the country's
pariah status.
"These are the signs of
a desperate regime, it is becoming more and more
ridiculous and Zimbabwe is
confirming its pariah status," John Makumbe, a
political science lecturer at
the University of Zimbabwe said.
"But we are not surprised that the
government will resort to such tactics to
buy the loyalty of a few
individuals. Certainly this will not benefit the
majority and once again the
economy will take a big knock," he added.
The government is expected to
table the long-awaited Mines and Minerals
Amendment Bill in August, which
will require foreign miners to cede majority
stakes to locals. This has sent
shivers in the sector and most of the miners
have stopped all expansion
projects.
Mugabe has sharply criticised the business sector for rampant
profiteering
and accused them of increasing prices on a daily basis to
foment anger among
consumers so they can turn against his
government.
Analysts said the legislation would sail through both Houses
of Parliament,
which are dominated by the ruling ZANU PF party.
The
veteran Zimbabwean leader, now 83 and seeking another term in 2008, has
defended his policies, which have put him at odds with the West and says
instead sanctions and sabotage by his enemies has bled the once breadbasket
of southern Africa. - ZimOnline
Zim Online
Tuesday 29 May 2007
By
Nqobizitha Khumalo
BULAWAYO - Amnesty International says the Zimbabwean
government is
continuing to hinder and frustrate efforts to provide shelter
to thousands
of people who were left homeless during a controversial
clean-up campaign
two years ago.
In a country report on Zimbabwe that
was released at the weekend, Amnesty
expressed serious concern at the plight
of thousands of people who were left
without homes following the home
demolition exercise.
At least 700 000 people were left without shelter
after President Robert
Mugabe sanctioned the demolition of their houses and
backyard shacks in the
military-style clean-up campaign.
A United
Nations report compiled after the demolitions said another 2.6
million
Zimbabweans were also directly affected by the home demolitions that
Mugabe
said were necessary to rid cities and towns of squalor.
"The situation of
thousands of people whose homes were destroyed as part of
Operation
Murambatsvina (Restore Order) in 2005 continued to worsen, with no
effective
solution planned by the authorities.
"The government (has) continued to
obstruct humanitarian efforts by the UN
and by local and international
non-governmental organisations," says the
report.
The latest report
is set to renew pressure on Mugabe barely a week after
another international
rights group said the veteran Zimbabwean leader could
be dragged to The
Hague over the slum clearance campaign.
The Centre on Housing Rights and
Evictions (COHRE) last Wednesday said "the
magnitude of the crimes committed
during Operation Murambatsvina deserved an
international response" and urged
the UN's Security Council to "bring the
perpetrators of these crimes" to
book.
Amnesty International had no kind words for a housing programme,
Operation
Garikai/Hlalani Kuhle that was launched in July 2005 by Mugabe to
deflect
international criticism of his government's actions.
Amnesty
said the housing programme had failed dismally to provide houses for
thousands of displaced families.
"By May (2006), one year after the
programme's launch, only 3 325 houses had
been built, compared to 92 460
housing structures destroyed in Operation
Murambatsvina.
"Construction in many areas appeared to have stopped.
Many of the houses
designated as "built" were unfinished, without access to
water or sewerage
facilities, and uninhabited," says the report.
The
Zimbabwean government, which is battling its worst economic recession,
in
late 2005 admitted that it did not have the financial resources to finish
building the houses.
In an embarrassing turn for the Harare
authorities, the government urged all
those who were allocated the houses to
finish building the houses on their
own.
Mugabe turned down an offer
by aid agencies to provide temporary shelter to
the homeless saying
Zimbabweans were not "tent people".
At a church-led commemoration of
Operation Murambatsvina in Zimbabwe's
second city of Bulawayo last weekend,
victims of the clean-up exercise said
they were still sleeping in the
open two years after the government promised
to allocate them new houses.
-ZimOnline
World Net Daily
Posted: May
29, 2007
1:00 a.m. Eastern
Len Kinsolving
The London Sunday
Telegraph reports Zimbabwe's President Robert Mugabe is
"spending almost $4
billion on a grandiose project - a monument to himself.
"Work has already
begun on a museum dedicated to the life and dubious
achievements of the
83-year-old president. . The country's economy is
crumbling and its people
are struggling to survive in the face of 4,000
percent inflation, food and
fuel shortages and the prospect of power cuts
for up to 20 hours a day.
.
"Mr. Mugabe's policies, such as the seizure of white-owned farms, are
blamed
for an economic crisis in which unemployment is running at about 80
percent
and there are severe shortages of staple foods such as corn and
wheat. .
"Mr. Mugabe's extravagance is well known. Besides his five
official
residences, he owns a number of private houses, including the most
recent
addition: a palatial three-story, 25-bedroom, $15.8 million residence
in the
exclusive Harare suburb of Borrowdale."
What also needs very
much to be remembered is the considerable amounts of
money liberal American
church denominations contributed to Mugabe when his
terrorist group,
Zimbabwe African Nationalist Union (ZANU), was fighting to
overthrow the
Rhodesian government.
That ZANU was indeed terrorist was evident in the
death of Southern Baptist
clergyman Archie Dunaway of that denomination's
missionary hospital in
Senyate. He was taken from this hospital and his body
was subsequently
found - after he had been used as a live target for bayonet
practice.
Mugabe was not at all displeased by this atrocity - or in his
proud claim of
blowing up a Woolworth's store in Salisbury (now Harare),
wounding 76
civilians and killing 12 more - including two children and two
expectant
mothers - all blacks.
Earlier that year, Mugabe's men
massacred seven Catholic missionaries at
Musame - including four nuns. They
also murdered several Pentecostal
missionaries at the Elim Mission -
preceding these murders with gang rape.
None of this stopped liberal
church denominations through councils of
churches from sending money to
murderous, so-called "liberation" groups like
Mugabe's ZANU.
Despite
all this, Robert Mugabe was described as: "a notable world leader,
exemplifying the finest aspects of humanity" in achieving "liberation and
justice" based on "decency" and "freedom" in "a result which thrills the
whole world."
Who made this tribute to Robert
Mugabe?
President of the United States Jimmy Carter - who welcomed Mugabe
to the
White House.
In Nashville, the Rev. Mr. Dunaway's son, Mark,
recalled:
"My father was murdered at almost the same time Jimmy Carter
was down there
at the Southern Baptist Convention in Atlanta trying to get
votes. We heard
(messages of sympathy) from many others at that convention -
but we never
heard from Carter."
Financial Times
By Nicol Degli
Innocenti in London
Published: May 28 2007 22:06 | Last updated: May 28
2007 22:06
Diamond retailers in the UK are failing to play their part in
the battle
against conflict diamonds and risk undermining the United
Nations-backed
initiative to clean up the industry, according to a report to
be released on
Tuesday.
The report is the product of a survey of 42
of the most prominent UK
jewellery retailers by Amnesty International and
Global Witness, the
campaigning group that first alerted the world to the
issue of conflict
diamonds in the 1990s.
A majority of companies
contacted replied in writing to the survey. However,
the 11 who failed to
respond are among the top 50 jewellery retailers in the
UK by market share,
with annual sales of more than £20m. Among them are
Cartier, Graff Diamonds
and Fraser Hart. John Lewis and House of Fraser also
failed to provide any
information on their diamond policy. Most companies
were contacted four
times.
Since then the so-called Kimberley Process (KP), an agreement
between
governments, industry and non-governmental organisations, has sought
to
combat illicit trade and to prevent diamond smuggling from fuelling wars.
The industry agreed to provide guarantees on the origin of all diamonds
traded or sold to ensure they did not come from a conflict
area.
Despite these pledges, "most top-selling UK jewellers still lack
adequate
policies to effectively combat the trade in conflict diamonds", the
report
states.
"Most companies adhere to the industry's minimal
systems of self-regulation
but these are not effective in preventing the
trade in blood diamonds. A
voluntary system will not bring the necessary
change within the diamond
industry."
Conflict diamonds from West
Africa "are still reaching the international
market place", and there are
"credible reports of illegal diamond
trafficking from Zimbabwe and
Venezuela".
Last year the publicity generated by the Oscar-nominated
Hollywood movie
Blood Diamond, which highlighted the link between civil
conflict and diamond
smuggling in West Africa, prompted the industry to
launch a massive
information campaign to educate retailers and prepare them
to answer
consumers' questions about the issue.
The survey shows that
awareness has increased: 96 per cent of respondents
stated that they had
adopted the KP-sanctioned system of warranties, the
rules of self-regulation
agreed to by the industry. Both the British
Jewellers' Association and the
National Association of Goldsmiths encourage
their members to seek a
warranty as to the provenance of their diamonds, but
few retailers were able
to explain how the system was implemented.
Only two companies, Tiffany
& Co and Signet (including its subsidiaries
Ernest Jones, H.?Samuel and
Leslie Davis) have taken stronger measures,
commissioning rigorous internal
and third-party auditing procedures to
ensure the diamonds they buy are
responsibly and ethically sourced.
The UK report follows a survey of the
$33bn US jewellery industry, conducted
earlier this year, which revealed a
similar pattern. With a few notable
exceptions, US retailers have no
auditing procedures in place to combat
conflict diamonds, despite the
recommendation to do so by the trade
association Jewellers of
America.
KP members account for 99.8 per cent of all diamond production.
As rough
diamonds are a small, precious and easily smuggled commodity, some
gems
inevitably escape the net, but the KP has succeeded in imposing a
regulatory
system on the $60bn (£30.25bn, ?44.6bn) a year
industry.
The percentage of diamonds coming from conflict zones has
dropped from 4 per
cent to 0.2 per cent, although the end of several wars in
Africa has
contributed to this. But despite its achievements the KP is a
slow-moving
machine, hampered by its choice to use the carrot rather than
the stick. The
KP faced criticism last year for its slow response to the
threat posed by
the civil war in Ivory Coast.
Washington Post
Reuters
Tuesday, May 29, 2007; 3:36 AM
HARARE
(Reuters) - Zimbabwe will put 40,000 more people on life saving
anti-retroviral drugs by the end of the year despite an economic crisis that
has hobbled the country's health care, state media reported on
Tuesday.
The southern African country is among the worst hit by the
HIV/AIDS
epidemic, killing more than 3,000 people every week and accounting
for 70
percent of hospital admissions.
But Zimbabwe, in the grips of
a deep recession, has also become one of the
few AIDS bright spots on the
continent after its HIV prevalence rate
declined to 18.1 percent last year
from 25 percent six years ago.
Health Minister David Parirenyatwa said
the number of people receiving the
life-prolonging medicines has increased
from 60,000 in December to 80,000
this month but that the government would
add another 40,000 patients by the
end of the year.
"Currently the
number of people on ARVs has grown to 80,000 since December
last year and we
hope to achieve our target of getting 120,000 by the end of
the year,"
Parirenyatwa told the official Herald newspaper.
Parirenyatwa said that
at least 300,000 people living with HIV/AIDS were in
urgent need of
ARVs.
Zimbabwe's drive to increase access to ARVs has been hampered by a
severe
shortage of foreign currency, itself a sign of an economic crisis
that has
pushed inflation past 3,700 percent and increased poverty
levels.
The crisis has been particularly felt in the health sector, where
basic
drugs are in short supply while strikes for better pay by doctors and
nurses
have worsened the situation.
President Robert Mugabe -- who
says Zimbabwe is showing the way for Africa
in the fight against HIV/AIDS --
rejects charges of mismanagement and blames
the West for sabotaging the
economy as punishment for seizing white-owned
farms to distribute to
blacks.
Reuters
Tue 29 May
2007, 5:23 GMT
By Nelson Banya
HARARE (Reuters) - Zimbabwe will
not seek foreign partners to mine diamonds
in the east of the country and
has stopped all illegal mining in a
controversial area granted to a state
firm, a government minister said on
Monday.
Over 20,000 illegal
miners descended on the Marange diamond deposit in the
eastern province of
Manicaland last August, sparking fears by the World
Diamond Council (WDC)
that some of the diamonds were finding their way to
the black market against
rules set up to curb trade in gems from conflict
zones.
President
Robert Mugabe's government sealed off the area and took over the
diamond
claim previously allocated to the London-listed African Consolidated
Resources, which is contesting the move in court.
Mines Minister Amos
Midzi told journalists that all illegal mining
activities had been stopped
and that the state-owned Zimbabwe Mining
Development Corporation (ZMDC) had
since begun trial mining on site.
"So far we have dealt with some of the
problems we are all aware of, chiefly
that problem with illegal mining,"
Midzi said.
"The situation has been contained ... and starting on 22
April, ZMDC started
the first run of the trial mining, starting with two
tonnes of ore and they
were able to produce the first carats from Marange,"
Midzi added.
He said the trial runs had since risen to 25 tonnes of ore
per day and
indications were that the yield would be enough to allow
full-scale
operations, but added that ZMDC would not seek foreign partners
in the
project.
Mugabe's government is currently considering
legislation to transfer control
of foreign-owned mines into government and
local ownership.
"The decision of the government is that the ZMDC should
go it alone. From
what we've seen, there is no need for that (external
investors). ZMDC has
not drawn on any expertise or equipment from outside,
which is testimony
that we are able to do it on our own," Midzi
said.
The minister said a six-member delegation from the WDC's Kimberly
Process
Committee, which was currently in the country for consultations was
free to
visit Marange and other diamond mines in the country to assess the
situation.
"We expect the team to visit River Ranch, Murowa and
Marange so that they
can make their own assessment. I'd like to dispel the
notion that the team
has imposed itself on us ... they are here at our
invitation," Midzi said.
The Vigil marked Africa Day with a sad sense of betrayal. The latest kick in the teeth for Zimbabweans has been the election of Zimbabwe as Vice-Chair of the Common Market for East and Southern Africa, Africa’s largest trading bloc. London’s Mayor, Ken Livingstone, has arranged a big event to mark Africa Day next door in Trafalgar Square on Monday (28th May), the Spring public holiday, with the wonderful Miriam Makeba gracing the occasion. But the Vigil spokesperson, Julius Mutyanbezi-Dewa said Zimbabwe had nothing to celebrate because Africa had done nothing for Zimbabwe. He read one of his poems “Africa” from a collection published recently “Preaching to Preachers”: “Africa must change, Africa has eyes, she must learn to see. Africa should change, Africa has ears, she must listen. Africa must change, Africa has tastebuds, she must taste. Africa should change, Africa has nostrils, she must smell. Africa must change, Africa has a skin with receptors, she must feel”. Julius’s aunt, Fatima Machekanyanga, was planning to come to the Vigil but unfortunately was rushed to hospital. We wish her a speedy recovery.
For the first time in ages we had rain at the Vigil. But despite the damp we were happy to celebrate the birthdays of four Vigil supporters: Luka 25/5, Addley 26/5, Yeukai 28/5 and Chipo 29/5. We shared a big chocolate cake to celebrate.
Addley’s sister, Grace Kwinjeh, is visiting family in the UK at the moment. Grace, as you will all know, was one of the MDC leaders who was so brutally beaten up in March. She is still in a lot of pain and needs medical attention. The Vigil was appalled to hear that the UK government has given her a visa allowing her to stay only until 30th May. We are making urgent representations to the authorities here on her behalf. Vigil supporters reported that she addressed a church service in Vauxhall, South London, last Sunday. After prayers she was so unwell she had to be lifted to her feet by friends. Zimbabwe Embassy staff attend this service – they couldn’t lift their heads up for embarrassment..
Tales from the table: We always get South African visitors passing by because of our close proximity to the South African High Commission. It was interesting to note the different attitudes of two of our South African visitors today. One young man who had arrived in London only a few hours beforehand saw our “ANC loves Mugabe” poster and asked if we hated the ANC. Our response was that we were unhappy about their support for Mugabe: in five years of protest we had not once heard a member of the South African government condemn him for the human rights abuses in Zimbabwe. Our South African friend was very sympathetic. The second South African visitor was a bad-tempered woman who was irritated by the number of Zimbabwean refugees in South Africa. We don’t really understand why she stopped by at all as she refused to sign our petitions calling for change in Zimbabwe which would lessen the Zimbabwe refugee problems in South Africa.
Our sister Vigil in Bristol had their anniversary rally today – see separate report.
For this week’s Vigil pictures: http://www.flickr.com/photos/zimbabwevigil/
FOR THE RECORD: 50 signed the register.
FOR YOUR DIARY:
- Monday, 28th May – no Central London Zimbabwe Forum because it’s a public holiday.
- Monday,
11th June – The Zimbabwe Solidarity Campaign based in
Vigil
co-ordinator The Vigil, outside the Zimbabwe
Embassy, 429 Strand,
London, takes
place every Saturday from 14.00 to 18.00 to protest against gross violations of
human rights by the current regime in Zimbabwe. The
Vigil which started in October 2002 will continue until
internationally-monitored, free and fair elections are held in
Zimbabwe. http://www.zimvigil.co.uk