Mugabe is warning off foreign firms

Will the new model work for Zimbabwe?

Following their recent election win, Robert Mugabe’s Zanu PF government has issued a new warning to foreign firms. They ran a full-page advertisement in local papers this week saying that their comprehensive election win was an endorsement of their “indigenisation plans” that will see all foreign owned companies forced to give up 51 per cent of their equity to black Zimbabweans.

It is expected that this means that Mugabe will force the remaining 1100+ white and foreign owned companies left in the country, as well as local banks with foreign interests, to hand over 51 per cent of their businesses to the Zanu PF government.

"Over the next five years, Zimbabwe is going to witness a unique wealth transfer model that will see ordinary people take charge of the economy," the adverts read.

Saviour Kusukwere, one of Mugabe’s ministers, revealed separately that the country planned to seize 51 per cent of foreign-owned mines, worth an estimated US$7bn without any compensation. He warned that mines that refused to surrender more than half of their assets would lose their licences.

Recent Economic Trends

Following the 2000 referendum, Zimbabwe experienced 7 years of negative economic growth, with GDP per capita figures falling from US$535 in 2000 to US$415 in 2008. Then after introducing the US dollar as it currency in February 2009, the country witnessed a resurgence, with GDP per capita levels rising to US$788 by 2012 (Source: World Bank).

However, despite this small improvement, most African countries have surged ahead of it over this twelve year period as reflected in the table below.

Timeline: Mugabe’s 33 years in power

  • Mugabe and his Zanu PF party took power following the 1980 general elections.
  • Following droughts in the country in the late 90s and slowing economic growth, Mugabe was coming under increasing pressure to step aside.
  • Mugabe then held a referendum in 2000 in order to extend his powers. This referendum was unexpectedly defeated by a new opposition party formed from a labour union movement, the MDC and its leader Morgan Tsvangirai.
  • Months after the referendum, the MDC ran a candidate in every district in the country and emerged with nearly half the seats in parliament.
  • Zanu PF responded by launching a campaign of violence to intimidate the MDC. It also destabilized the country by ordering the invasion of commercial farms by so called War veterans.
  • Following the invasions and general public outcry, new media laws were passed prior to the 2002 elections which led to the closure of all independent newspapers in the country.
  • Zanu PF won majorities in the 2002 and 2005 elections. These results were heavily disputed by the MDC and international bodies.
  • MDC leader Morgan Tsvangirai was severely beaten by government officials in 2007 and his bodyguard, Nhamo Musekiwa, was killed.
  • The MDC won a majority in the 2008 election but they did not achieve over 50 per cent of the vote and a run-off election was therefore required.
  • Prior to the run-off election, Zanu PF launched another campaign of violence against MDC supporters, forcing the MDC to pull out of runoff elections and effectively handing power back to Mugabe.
  • Susan Tsvangirai was killed in a car crash in 2009, which is believed by many to be the work of Zanu PF officials who were attempting to assassinate her husband Morgan Tsvangirai, who was in the same car at the time. He survived.
  • In a deal brokered by South African president Thabo Mbeki following the 2008 elections, Mugabe remained president and kept control over the army and the country as a whole.
  • Mugabe won the recent elections held on the 31st July 2013, taking over 60 per cent of the presidential vote and over two thirds of parliamentary vote. These results have been heavily disputed by the MDC, as well as by various independent bodies and the UK and US government. However, most regional powerhouses including the Southern African Development Community (SADC) and the South African government said the elections were free and fair. In fact, the only African country to officially speak out against the result was Botswana.
Robert Mugabe. Photograph: Getty Images

Andrew Amoils is a writer for WealthInsight

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Why Angela Merkel's comments about the UK and US shouldn't be given too much weight

The Chancellor's comments are aimed at a domestic and European audience, and she won't be abandoning Anglo-German relationships just yet.

Angela Merkel’s latest remarks do not seem well-judged but should not be given undue significance. Speaking as part of a rally in Munich for her sister party, the CSU, the German Chancellor claimed “we Europeans must really take our own fate into our hands”.

The comments should be read in the context of September's German elections and Merkel’s determination to restrain the fortune of her main political rival, Martin Schulz – obviously a strong Europhile and a committed Trump critic. Sigmar Gabriel - previously seen as a candidate to lead the left-wing SPD - has for some time been pressing for Germany and Europe to have “enough self-confidence” to stand up to Trump. He called for a “self-confident position, not just on behalf of us Germans but all Europeans”. Merkel is in part responding to this pressure.

Her words were well received by her audience. The beer hall crowd erupted into sustained applause. But taking an implicit pop at Donald Trump is hardly likely to be a divisive tactic at such a gathering. Criticising the UK post-Brexit and the US under Trump is the sort of virtue signalling guaranteed to ensure a good clap.

It’s not clear that the comments represent that much of a new departure, as she herself has since claimed. She said something similar earlier this year. In January, after the publication of Donald Trump’s interview with The Times and Bild, she said that “we Europeans have our fate in our own hands”.

At one level what Merkel said is something of a truism: in two year’s time Britain will no longer be directly deciding the fate of the EU. In future no British Prime Minister will attend the European Council, and British MEPs will leave the Parliament at the next round of European elections in 2019. Yet Merkel’s words “we Europeans”, conflate Europe and the EU, something she has previously rejected. Back in July last year, at a joint press conference with Theresa May, she said: “the UK after all remains part of Europe, if not of the Union”.

At the same press conference, Merkel also confirmed that the EU and the UK would need to continue to work together. At that time she even used the first person plural to include Britain, saying “we have certain missions also to fulfil with the rest of the world” – there the ‘we’ meant Britain and the EU, now the 'we' excludes Britain.

Her comments surely also mark a frustration born of difficulties at the G7 summit over climate change, but Britain and Germany agreed at the meeting in Sicily on the Paris Accord. More broadly, the next few months will be crucial for determining the future relationship between Britain and the EU. There will be many difficult negotiations ahead.

Merkel is widely expected to remain the German Chancellor after this autumn’s election. As the single most powerful individual in the EU27, she is the most crucial person in determining future relations between the UK and the EU. Indeed, to some extent, it was her intransigence during Cameron’s ‘renegotiation’ which precipitated Brexit itself. She also needs to watch with care growing irritation across the EU at the (perceived) extent of German influence and control over the institutions and direction of the European project. Recent reports in the Frankfurter Allgemeine Zeitung which suggested a Merkel plan for Jens Weidmann of the Bundesbank to succeed Mario Draghi at the ECB have not gone down well across southern Europe. For those critics, the hands controlling the fate of Europe are Merkel’s.

Brexit remains a crucial challenge for the EU. How the issue is handled will shape the future of the Union. Many across Europe’s capitals are worried that Brussels risks driving Britain further away than Brexit will require; they are worried lest the Channel becomes metaphorically wider and Britain turns its back on the continent. On the UK side, Theresa May has accepted the EU, and particularly Merkel’s, insistence, that there can be no cherry picking, and therefore she has committed to leaving the single market as well as the EU. May has offered a “deep and special” partnership and a comprehensive free trading arrangement. Merkel should welcome Britain’s clarity. She must work with new French President Emmanuel Macron and others to lead the EU towards a new relationship with Britain – a close partnership which protects free trade, security and the other forms of cooperation which benefit all Europeans.

Henry Newman is the director of Open Europe. He tweets @henrynewman.

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