They call it “indigenization” in Zimbabwe. However, the process of forcing foreign mining firms to hand over 51% of their companies to local black owners is commonly understood by many to be “nationalization” or “expropriation.”
The Zimbabwean government says the forcible handover of a majority stake by foreign mining firms is necessary to readdress historical imbalances. It says international firms like Angloplat or ImpalaPlatinum are “taking money” out of the country and ordinary Zimbabweans aren’t benefiting from the country's mineral wealth.
Critics of the Indigenization Act say it’s not about giving mineral rights back to local Zimbabweans, but a way of ensuring an entrenched system of patronage in the southern African nation.
The issue is not about race, or even foreign ownership, say critics. Instead, it’s about buying support and currying favor among acolytes of Robert Mugabe’s ZANU PF party.
Mugabe’s partners in government, the MDC, seem powerless in the face of ZANU’s push for this far-reaching legislation. Prime Minister Morgan Tsvangarai has been reluctant to criticize the “indigenization” legislation – perhaps fearful of being labeled pro-white or pro-West? In its defense, the MDC has said companies should be paid fair market value for their stakes.
However, it still seems unclear how international mining firms will be compensated for their 51%. The Indigenization Minister, Saviour Kusukuwere, says the state will raise the money via a “Sovereign Wealth Fund.” He says mining companies will not be paid for any of their “underground assets” because they “belong to us.” However, companies will be compensated for “improvements” above ground.
Just weeks ago, Zimbabwe had an investment conference in Harare, urging foreign investors to come and do business there. These latest pronouncements can’t have done much good to Zimbabwe's reputation as an investor-friendly location.
What do you think?
(CNN) – One by one, the PIG economies - first Greece, then Ireland, now Portugal - have gone to the EU and IMF trough to bail out their debt-ridden economies.
The European Monetary Union is desperate to make sure that the acronym of troubled economies doesn’t turn into PIGS. So far, Spain has been spared.
And EU finance officials hope the request Wednesday by the Portuguese government for a bailout will be a firewall that stops the debt contagion from spreading to Spain – a much larger economy, with greater significance to the world economy and the future of the euro.
“That’s the main question now in the European Union: How far can this get,” Pedro Santos Guerreiro, editor-in-chief of Portugal’s leading financial newspaper, Jornal de Negocios, told CNN. “And Spain is quite nervous today, more nervous than they were yesterday, because it shows that maybe they’ll be the next country.”
About Business 360
CNN International's business anchors and correspondents get to grips with the issues affecting world business, and they want your questions and feedback.