Zim : Nepad and the Theft of Private Assets
Sad to post this and it might be not applicable .. but read and think about those that stay behind / lost it all ...
The Theft of Private Assets - by Eddie Cross, Zimbabwe
As NEPAD activity reaches new heights in global forums, the full
implications of the economic delinquency of the Mugabe government and its
effects on investors in the continent have still not been spelt out.
Businessmen understand the implications and we act accordingly, but it
seems as if African leaders, including Mbeki and Obasanjo, for all their
sophistication, do not. Perhaps its time to spell out just what it means.
In the past two years, the Mugabe government, with the tacit support of the
entire continent, has taken away from several thousand private investors in
Zimbabwe, assets worth at least one trillion Zimbabwe dollars. For those
who do not know what that sort of sum means, its Z$1 000 000 000 000.00 or
US$18 billion in private assets. In Zimbabwean terms that is three times
the annual GDP and more than the entire continent received in foreign aid
in the past year (US$14,6 billion). These assets were largely created after
independence in 1980, with 83 per cent of the owners acquiring them since
1980 - the majority with specific government approval, which stated in
clear terms that the properties they were buying, were not required for
land resettlement. What were those assets? The full list is too long to
publish here but it includes 8,5 million hectares of land, 258 000 hectares
of irrigated land, 48 000 hectares of planted timber. 1,5 million head of
beef cattle, 60 000 head of dairy cattle, 12 000 hectares of citrus
orchards, 2 700 hectares of deciduous fruit orchards, 12 000 homesteads,
350 000 workers houses. 2 800 dams of various sizes, 3 500 automatic
tobacco curing facilities, 37 000 tobacco barns. 2,5 million square meters
of storage space, 20 000 tractors of 75 horsepower and some 1 700 tractors
of greater horsepower. Thousands of implements, ploughs, harrows, planters,
fuel storage facilities, combine harvesters, hay balers and thousands of
kilometers of fencing, water pipelines cattle handling facilities, spray
races and dip tanks. These investors spent up to Z$120 billion a year on
inputs, were supported by 3 000 industrial and commercial firms, borrowed
Z$30 billion last year to finance the crops grown during the summer of
2001/02. When they made money most of these investors simply spent it on
their farms. Many were highly intensive and well developed properties that
would be the pride of any country in the world. They funded research and
training, marketing efforts that reached across the world, they made
Zimbabwean tobacco, cotton, flowers and beef amongst the best known
products of Africa. They
not only invested their own money, but borrowed money to invest. They also
invested their time and knowledge and many were active in their communities
helping the peasant communities in their districts to improve their output
and quality. They took out Zimbabwe citizenship and paid taxes. They obeyed
the law of the land in all respects. Their reward for trusting Africa?
Their government comes under threat
from democratic forces in their own country and decides that the white
farmer is an easy target and can be used, ruthlessly and without regard to
the rule of law or any other standard of human behavior, that they should
be sacrificed on the alter of political expediency.
They have been killed (12 have died since the dispossession campaign
started) beaten, imprisoned, harassed, expelled from their properties by
unruly mobs with weapons while the police watched. They have been vilified
and dammed by the state media, accused of every crime in the book and a lot
that are not listed. Now they are watching helplessly as their hard won
assets are stolen, vandalized or worse - simply
given to people with no experience of farming who qualify simply because
they are connected to the ruling party. Not a single farmers association in
the rest of the world has come to their assistance. Not a single government
in Africa has condemned this wholesale theft of private assets in Zimbabwe
and no one has proposed any form of assistance for the people who are being
dispossessed of everything they own in many cases. Many of these farmers
are literally sitting in car parks with their personal effects wondering
what to do next. They are being forced in some cases to take their children
out of school because they cannot afford school fees and most are planning
to move to another continent where this nightmare will not happen to them
again. Would you trust Africa with your money - if leaders who do this are
allowed to get away with it and in fact are lauded by the ignorant and
prejudiced in other countries, for taking action which will "correct the
injustices of the past"? Start talking that language and where would any of
us be? Land is at the core of the Zimbabwe crisis - I agree, but what
crisis? The crisis of governance, human and legal
rights, the security of investment in a foreign land? If you add this
litany of theft and abuse to the issues of sound fiscal and macro economic
policy then you have an outlook for investment in Africa which only the
completely blind and deaf could ignore. If you owned a pension in Zimbabwe
and it was invested in the money market here, it would be shrinking at the
rate of about half its value annually at present. If you retired on a
pension after 35 years of faithful service to your company, your pension
would not buy you groceries in three years. If you invested in an export
industry and intended to attack world markets with your finished product,
when you were paid, the State would take 40 per cent of your gross receipts
and convert it at 25 per cent or less, of its true value. If you invested
in a gold mine, they would take 80 per cent of your gross receipts and pay
you 40 per cent of its true value. Then if after all that you made any
money, you would be subject to some of the highest tax levels in the world
- Zimbabwe collects over 30 per cent of its GDP in taxes each year. If you
were employed on a standard contract of employment you would start paying
taxes on an income of US$85 per month and pay up to 80 per cent of what you
earn to government in one form of tax or another. You would get nothing
back - no free education, no free health, and no long-term security of any
kind. On top of that you might be told who to employ, denied residence
permits for essential staff, obligated to take into your company, partners
who would contribute nothing but demand to be treated as principals. Or you
might be faced with price controls which prohibit you from making a profit,
or be faced with demands for bribes in order to get your
trading license or a health certificate or even an import permit. If you
wanted a telephone line into your new factory you might have to wait 5
years or pay a bribe to have a line taken from another customer and given
to you. You might be faced with a state-sponsored trade union that will
make impossible demands on you for wage increases and other perks.
Dismissing an employee who fails to turn up to work or simply is
incompetent might prove to be impossible. Investors in Zimbabwe today face
every one of these problems every day - no matter how large or how
powerful. Foreign ownership does not protect you from these pressures and
in fact sometimes is a liability, because you have no local political sway.
Mbeki says that Africa is changing - I agree, but if they allow Mugabe to
get away with this outrageous behavior in economic and political terms,
then what guarantee can Mbeki give that it will not happen tomorrow in
South Africa, or Zambia, or anywhere else on the continent. Globalisation
means that people who want to invest can place their money anywhere in the
world and they can choose to do so. Choice means that Africa has to attract
investment and to do so it must protect and succor the investors who are
already here. Not treat them as economic prisoners behind prison walls
where they can do what they want to them and the rest of the world will not
give a damn.
During the struggle for independence, dignity and freedom in Zimbabwe, the
liberation movements claimed they were working for democracy (one-man one
vote), freedoms of association and expression, human rights and dignity and
equality before the law. One of the things that distresses me most in the
present crisis in Zimbabwe is that so few African intellectuals and leaders
are speaking into our situation in defence of those principles. They remain
silent, and by implication, they silently give Mugabe legitimacy and
acceptance of activities that are undermining everything they stood for
during the years of struggle. If this does not change, NEPAD is dead in the
water, before it begins. Eddie Cross Bulawayo, June 6, 2002.