The real cost of Gono's battles with business executives
A number of prominent business executives and entrepreneurs have left Zimbabwe under unceremonious circumstances in the last few years. The government has consistently referred to them as fugitives from justice and some of their properties have been expropriated by the state. Dr Magaisa revisits the case and argues that the current impasse is not helping anyone and is one of the numerous factors that are detrimental to the country’s prospects in the economic sector.
By Dr Alex T. Magaisa
IN a previous article in this column, we cautioned about the dangers of excessive regulation in the financial sector. We revisit that area and this time focus on the more general point about the law-making process.
Although we focus on the financial sector, the issues raised in this article would apply with equal force in other areas of business, social and political life.
Over the last five years, a number of business executives have departed Zimbabwe in unceremonious circumstances and are often referred to as fugitives from justice although they contend that they were escaping injustice.
Many of them were at the forefront of a fledgling black upper middle class and had stakes in the financial sector although others had begun to find space in the mining and industrial sectors. Their involvement in the financial sector could have played a key role in national development in the long-run.
In the early years
of Independence, the major financial institutions did not have favourable
policies and credit facilities for the majority of the population.
But we should also
have anticipated some teething problems in the process.
The greatest error was that liberalisation of the financial sector was not accompanied by proper laws to guard against excesses. It is well-known that where opportunities arise, opportunists follow.
The lack of proper regulation - such as the then division between authorisation and supervision of banks created avenues for opportunists.
However, when problems did arise in the financial sector, the response appeared to be excessive. To compensate for lack of laws in the first instance, the authorities appeared to design new laws that went far beyond the normally accepted rules.
More importantly, the response did not seem to take into account the fact that the problems arose at a time when the economic conditions were dire and therefore some of the extra-legal practices were in fact, necessitated by the circumstances of the time.
While this is not an excuse for perpetrating illegality, it is a factor in the general scheme of things that could be taken into consideration in creating the necessary legal response.
There is no denying
that there were some undesirable elements in the sector.
The laws that were created appeared to straddle individual freedoms and create shortcuts in the justice system.
The result was that any person that felt that his liberty was under threat took flight. This has been interpreted to mean that those who fled did so because they were guilty. But such a blanket conclusion excludes other possibilities.
Is it not also possible that given the manner in which the other accused persons were being dealt with under the laws and sometimes beyond the laws, no reasonable person in a position where his liberty was under threat would subject himself to the system?
The tribulations of the likes of James Makamba, Chris Kuruneri and others were probably sufficient to persuade some to flee or to justify their escape. In many cases we are told that for example, trading in foreign currency was done at the behest of authorities and in the case of Kuruneri, even Reserve Bank governor Gideon Gono testified that the man had done a national service at a time of great need.
Most individuals have at one point or another been forced to delve into the parallel market in order to meet the needs of the time.
But there is also
the problem of unequal treatment of offenders under the laws. The principle
of distributive justice requires that like cases be treated alike.
How then can one
reconcile the approach to the local banks, whose executives were being
sought in their personal capacities while executives of multinational
banks have not faced such threats and instead had their corporate entities
Not only has the country lost to other countries some of the most enterprising individuals in business, but it has also lost whatever resources these people may indeed have outside Zimbabwe when it needed them most.
The worst part is that the manner of the treatment has added to the negative image of the country. It is so easy to blame others for our problems but quite often we are the architects of our malaise.
Whatever the justifications of the government position, the treatment of the executives is largely seen in the international markets as persecution within a generally hostile socio-political atmosphere.
It is one of the big ironies of our time that at a time when the country is seeking to advance the cause of the local people, it is at the same time stifling the growth of those sectors and chasing out individuals who could be at the forefront of promoting that cause. It is trying to score but at the same time conspiring to concede an own goal.
We can see that in making the laws that were meant to deal with externalisation and related problems in the sector, the government could have enhanced its position by taking a sober approach and not make a knee-jerk reaction, as it appeared to do.
The process of law-making, especially in areas where constituencies are well-defined and easy to identify, is enriched a great deal by consultation and rigorous debate.
Laws must also be made in context - that is, they ought to reflect the contextual factors within which they are meant to apply. Quite often, laws are made without sufficient public consultation and rigorous debate.
It is well-known that the formal role of parliament is to make laws. The role of the executive government is to create policy, which is often translated into legislation through parliament. In practice, where the government controls parliament, we know that it is in fact the executive that makes law, with parliament acting simply to rubber-stamp the laws.
There are many
departments of government that are responsible for creating policy.
It is at this stage when public consultation must initially take place.
Consultation is then followed by responses from the stakeholders and this is even before the law has been drafted. People debate about the laws, the procedures and the goals that are sought. Thereafter, the department issues its responses, incorporating the views gathered from stakeholders.
The response paper is sent back to the stakeholders, together with the drafts of the bill where possible to demonstrate that their views have been taken into account.
This is where we see accountability - the state being accountable to its citizens in the process of law-making. The bill then goes to parliament, where elected representatives representing a wider constituency debate it before it is passed into law.
Of course this is the ideal scenario and some who have never seen it work might think it is impossible.
In my view, many
of the laws that currently regulate the financial sector could have
been vastly improved if they had been subjected to this rigorous process.
is every reason to reconsider the government's approach towards the
estranged business community. Zimbabwe has more to gain from their inclusion
than from their exclusion. We cannot expect to attract foreign capital
for development when we show disregard and contempt for our own entrepreneurs.
They may have erred but they are certainly not beyond rehabilitation.
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