Investment: SA blackmail won’t help Zimbabwe

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AS A marketing pitch it left much to be desired, but Finance Minister Patrick Chinamasa gets full marks for chutzpa.
Speaking at an investment conference in Johannesburg last week, he said the worst was over for the Zimbabwean economy, and the country was “open and ready for investment … We are about to run, to sprint. We are looking for partners to sprint with us.”
And then the clincher: “I believe South African investors have a moral and business obligation to invest in your neighbour … or we will continue bothering you.” That is about as close to blackmail as one can get without hiring a shady private detective armed with a long lens.
Bear in mind that this is the same Chinamasa whose response to the belated release of the Khampepe report on the 2002 Zimbabwe election, which was compiled by two black judges and suppressed by the South African government for more than a decade, was that it was a “product of a racist South African justice system”.
Chinamasa was justice minister at the time of the election in question, which the South African government under former president Thabo Mbeki accepted as free and fair despite the Khampepe report concluding the opposite due to compelling evidence of intimidation and fraud.
Contrary to Chinamasa’s upbeat assessment of Zimbabwe’s prospects — he insisted at the briefing that the country is on track to ensure food security and is addressing investor concerns over its radical empowerment and “indigenisation” policies — analysts with a firmer grip on both reality and morality see plenty of red lights flashing.
The 2013 election was supposed to have taken place in an environment more likely to produce a credible result due to wide-ranging political reforms agreed by Zimbabwe’s main political parties following mediation by the South African government. But few of the necessary reforms were implemented properly and the unity government fell apart before an election that was stage-managed by a military funded by the proceeds of illicit diamond and gold sales.
Since the 90-year-old Robert Mugabe assumed the presidency for yet another term, the economy — which had started recovering from a low base during the period of unity government — has resumed its rapid contraction. Companies have closed en masse, with the banking sector especially badly affected; unemployment has become the norm and any capital that has not been expropriated or locked into assets that cannot be liquidated has fled.Advertisement

Chinamasa, who is due to present the 2015 budget to the nation on Thursday, has written to the International Monetary Fund (IMF) requesting emergency funding, but since the country is in arrears with its existing IMF loans, this seems unlikely.
In his mid-term fiscal policy review two months ago, he announced increased duties on fuel and cars as well as higher rentals for state-owned housing. This was in addition to a range of new taxes on street vendors and everyday consumer goods such as beverages, blankets, cellular airtime and imported foodstuffs — including goods donated to charities for distribution to the poor.
Mugabe and his Zanu (PF) government have painted Zimbabwe into a corner financially. There is simply nothing left to grab, steal or expropriate. While Chinamasa may be correct in asserting that the lack of infrastructure presents an opportunity for investors, they will stay away as long as the economic and political fundamentals continue to deteriorate.
The latter are especially volatile at present as competition heats up within Zanu PF to succeed Mugabe. First lady Grace Mugabe’s entry to the race, despite having maintained a low profile politically in the past, has added an element of nepotism to a campaign that has always threatened to get ugly.