Respect for property rights vital to prosperity

Zimbabwe’s frequent appearances in the world’s news bulletins are usually describing the unacceptable conduct of its pre- and post-independence politicians, rather than their achievements. Have things changed enough to suggest that its leaders are deserving of a break?

Government has turned its attention to foreign owned companies and is trying to force all of them to relinquish 51% of their shares.
Government has turned its attention to foreign owned companies and is trying to force all of them to relinquish 51% of their shares.

Considering the advantages that these people squandered, it would be easy to argue that they deserve nothing, but it is also easy to argue that the millions who make up the rest of the population are casualties who do not deserve what they are experiencing either. But if the country is thought to be deserving of more positive treatment because of them, then very carefully planned efforts will be needed to make certain that compassion will not go to waste.

Even though all the politicians were elected on their promises to serve the people, very nearly all of them were soon claiming that the people were there to serve them. These politicians have vigorously exploited deeply entrenched traditions that permit leaders to demand respect. Unfortunately, when political disregard turns into contempt, as it has in Zimbabwe, and when nothing is done in response, it becomes compelling evidence that traditional respect for leadership trumps everything else.

If one of the best examples of successful development anywhere in the third world can be torn down and trashed by the greed, corruption and power-lust of a handful of politicians without generating an effective reaction from anywhere, what hopes can there be for the rest?

If international bodies dismiss Zimbabwe’s plight as “outside their jurisdiction”, the world’s political leaders will confirm the impression already shared by the world’s business leaders that nobody will come to the defence of investors if the political heavyweights in any African country choose to dispossess them of their assets.

Again and again, the topic comes back to respect for property rights. Every situation in which all the players respect each other’s property rights, the patterns of behaviour become supportive of investment and development.

When initiative-takers are routinely targeted for asset expropriations, the best of them will take their talents and ambitions to countries in which their property rights are respected.

Zimbabwe’s progress in earlier years outpaced that of its neighbours because its formalised property rights and laws of contract. Zimbabwe was once among the world’s most outstanding examples of what could be achieved by a developing country. With a little carefully directed help, it could reclaim that status fairly quickly, but if the Government of National Unity is prevented from delivering the civil rights and property rights reforms it has promised, or it too is corrupted, the country’s descent into poverty will soon start gathering momentum again.

But a large segment of the political policy plank remains the politicians’ determination to carry on blaming the former colonial powers forever. So whether or not they misunderstand their long-term interests, and whether or not they agree that their national pride has turned into swaggering self-delusion, they remain determined to keep alive the claim that all the faults of any consequence absolutely and permanently lie with the former colonial power.

Even if the politicians in former colonising countries can be persuaded to never stop feeling guilty and to carry on pouring aid into their former colonies, the people will remain poor. To the people who actually matter, the investors, these countries will remain unattractive and the continuing weaknesses will make the current argument more compelling: the whole of Sub-Saharan Africa should be considered suitable only for short-term speculative high-risk, high return ventures and every project should include a rapid exit plan.

Unfortunately, this is driven by just about every African leader’s belief that he should always retain the right to sweep aside the property rights of anyone within his territory if it suits his purposes to do so.

And because this leads to conduct that causes dissatisfaction, he should bolster his security arrangements and avoid ever being held to account by never relinquishing office.

Zimbabwe’s leadership has chosen to define the economic success of all but its own supporters as a potential threat, so the successful business owners had to be brought to heel somehow.

The means chosen was very straightforward: property rights can be made forfeit by government edict. The nationalisation of all farmland was supposed to place Zimbabwe’s biggest business sector under government control.

So far, all that this achieved was to turn the sector into a much smaller producer over which government still does not have control, but it is now too weak to be a threat. Government then turned its attention to foreign owned companies and is trying to force all of them to relinquish 51% of their shares.

Clearly, the people who gain control will be selected and directed by the authorities, and even if government again finds it does not have the talents to keep the businesses productive, it will claim success: the businesses will no longer be run by people who the party feels might not deserve their trust, but by people they select, all of whom will be far more easily controlled.

But millions of Zimbabweans have moved with the times and shown themselves to be as capable and resourceful as their counterparts in developed countries.

Zanu PF politicians are wrong to think that most people will be happy to be forced back into the much more confining range of options that was the lot of their forefathers.

Many have already chosen to leave for other countries where they can take full advantage of respect for civil rights in general and property rights in particular.

These rights did not feature in traditional society, but many were introduced in more recent colonial years. Zimbabwe’s problem today is that these rights are under attack and are being dismantled.

Today, the principal missing elements in Zimbabwe’s hoped-for recovery are the security and encouragement that investors need, whether they are Zimbabweans or foreigners.

The stepping-stones to Zimbabwe’s economic recovery and progress are simply the basic civil rights and property rights essentials that have to be in place to support each investor and every investment process.

The path Zimbabwe took to get into its current severely weakened state has been chosen to deliberately interfere with the objectives of all investors who do not show a willingness to be totally subjugated themselves to the wishes of the ruling party.

Post published in: Analysis

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