Earlier this week, I noted that Zimbabwe had begun accelerating towards collapse with the imposition of price controls, backed up by enforcement squads that provided little more than government-assisted looting. I wrote at the time that when state-created shortages threaten the economy, dictators attempt to stamp out the symptoms through even heavier state action rather than cure the original disease. Now Zimbabwe has almost no domestic capital left, thanks to Mugabe’s ruinous economic diktats.
That didn’t stop Mugabe from taking the next step towards utter collapse — chasing out foreign capital as well:
President Robert Mugabe has paved the way to effectively seize control of foreign-owned companies, many of them British, dealing another blow to Zimbabwe’s tottering economy.
Under a bill laid before Zimbabwe’s parliament, all firms undergoing structural changes, and any new investments in the country, must be 51 per cent controlled by “indigenous Zimbabweans”.
Paul Mangwana, the minister responsible for the programme, said the bill was intended to “create an enabling environment that will result in increased participation of indigenous people in the economic activities of the country”.
The legislation makes clear, however, that white Zimbabwean shareholders do not count. It defines an “indigenous Zimbabwean” as “any person who was disadvantaged by unfair discrimination on the grounds of race before independence in 1980”.
Mugabe did the same thing with Zimbabwe’s once-prosperous farms, which at one time produced food in abundance not just for Zimbabwe but also its neighbors in Africa. He claimed, not without justification, that white ownership of the land sprang from the unfair advantage of Rhodesia’s colonialism. Rather than conduct a rational reapportionment of the land, he stripped it from the producers and gave it to political hacks, who turned Zimbabwe into a beggar state.
This, however, is worse. Zimbabwe needs foreign investment more desperately than ever, and Mugabe is about to ensure that foreign capital gets removed before it too gets looted. The investment didn’t result from colonialism, either, but from efforts in the post-colonial era to support Zimbabwe’s independence. It provided jobs and security to thousands of Zimbabweans, security that will entirely dissipate once the foreign companies pack off as much as they can before Mugabe confiscates their property.
When he does, the factories and businesses will cease to exist, just as the farms have returned to pre-agricultural tall grass. Mugabe’s cronies know just as much about industrial production as they do about agricultural production. New foreign investment will never appear as long as Mugabe or his thugs retain power. Zimbabwe will be a wasteland of starving, unemployed people, just a generation removed from living in Africa’s breadbasket.