HARARE Zimbabwes labour movement has said that controversial empowerment regulations announced more than a week ago could ....... plunge the countrys struggling industrial sector into chaos similar to the one triggered by President Robert Mugabes chaotic agrarian reforms in 2000.
Zimbabwe announced a new set of empowerment laws compelling foreign-owned firms to cede controlling stake to locals.
The announcement of the regulations by Indigenisation Minister Saviour Kasukuwere triggered an uproar from Prime Minister Morgan Tsvangirais MDC-T party, which said such policies were supposed to be negotiated under the terms of a September 2008 power-sharing agreement that set up the countrys unity government.
In a statement last week ZCTU secretary general Wellington Chibebe said: The Zimbabwe Congress of Trade Unions (ZCTU) has been following closely developments in the country over the past weeks with particular concern over the Indigenisation and Economic Empowerment Regulations.
We believe this move that is coming under the guise of empowering indigenous people has the potential to throw the country into anarchy just like the chaotic land reform programme did.
Even within the inclusive government there is no accord and consensus on this regulation with the MDC-T alleging that they were also not consulted and involved. This is a recipe for economic and political disaster.
The regulations that have sent foreign-owned firms into panic with threats of imprisonment for foreign shareholders (or presumably their local representatives) who fail to sell 51 percent stake to indigenous Zimbabweans within the next five years, have also been criticised by the countrys business leaders.
It is ironic that these regulations that are anti-investment are taking centre stage when Zimbabwe is playing host to a tourism and investment indaba, Chibebe said.
The ZCTU chief said his organisation had noted that there was insufficient stakeholder involvement and participation in crafting the policy, adding that it was just one of the top-down and populist policies being foisted on the economy by government.
The labour body said it was unfortunate that such moves had been the hallmark of government policy formulation for a long time with the announcement of the regulations exposing that promoters of the controversial law were unwilling to learn from past mistakes.
The government does not have the money to buy the majority shareholding in the targeted businesses and there is a risk that this will result in another massive expropriation of businesses by Zanu (PF)-linked gurus along the lines of the chaotic and negative-sum game of the land reform exercise, said Chibebe.
Mugabe last Wednesday endorsed the controversial empowerment laws, saying the 49 percent shareholding to be left in the hands of foreign investors was enough.
Forty-nine percent is a hell lot, said Mugabe after officially opening an investment conference in Harare, adding; Its only them that are saying its small and its foolish and selfish.
But the ZCTU warned the regulations would create disincentives for private sector and enterprise development initiative.
The regulations will discourage investment inflows into Zimbabwe. Already there is a lot of uncertainty concerning these regulations and this uncertainty raises the country risk premium of doing business in the country and thereby raising the cost of doing business in Zimbabwe, Chibebe said.
The regulations show that the government is ignorant of its strategic role in economic development. No government the world over has successfully developed on the back of expropriating businesses.
Under the empowerment regulations foreign-owned businesses operating in Zimbabwe will be forced to sell a majority stake to locals by March 2015.
The regulations are seen as a potentially fatal blow to efforts to woo foreign investors to help rebuild the countrys economy shattered by 10 years of political turmoil and acute recession.
Post published in: News