In Land’s Bounty, a Political Chip

Lydia Polgreen, New York Times, May 19, 2012

More than a decade after Zimbabwe’s government began seizing sprawling white-owned commercial farms, a new fight is brewing here over who will profit from the nation’s vast bounty of platinum, chromium, nickel and diamonds.

In a move rooted in politics, the party of the aging president, Robert G. Mugabe, has begun pressuring companies operating in the country to comply with a law requiring that black Zimbabweans own more than half their shares.

{snip}

As Mr. Mugabe pushes for new elections this year, the drive to put more wealth into the hands of black Zimbabweans is seen by allies as a politically popular path to victory.

Senior officials of Mr. Mugabe’s party, ZANU-PF, say that foreigners operating inside the country must not be allowed to profit at the expense of indigenous, or black, Zimbabweans.

“Am I going to assign another man to make my wife pregnant and get a child?” asked Savior Kasukuwere, the ZANU-PF minister overseeing the process known as indigenization. “Zimbabweans must be masters of their own destiny. Indigenization is a core feature of the values of our party: freedom, equality, peace.”

The opposition Movement for Democratic Change, along with many independent economists and analysts, says that the law, which was passed in 2010, but only widely enforced in the last year, spells disaster for the country’s economy just as it is beginning to expand after years of withering.

{snip}

Zimbabwe’s economy has been making a slow recovery after more than a decade of political and economic crisis brought on by the seizure of commercial farms. {snip}

{snip}

According to Zimbabwe’s indigenization law, black Zimbabweans must own 51 percent of shares of foreign companies operating here. About 20 percent of the shares are supposed to go to community trust funds, which in theory will pay for local development projects, and company employees. The rest must go to black Zimbabweans.

But exactly how these aims are to be achieved is unclear. Many of these companies are publicly held, and their shares are not the companies’ to give or sell. On top of that, few black Zimbabweans have the means to buy large numbers of shares at market value.

{snip}

In March, the South African mining company Implats—whose subsidiary, Zimplats, mines platinum in Zimbabwe—said it would give community organizations interest-free loans, to be repaid from dividends, for their shares, and do the same for employees.

But it said it expected full market value for the other 31 percent of shares required under the law, an amount few private investors in Zimbabwe could muster. Officials from Implats and other companies affected by the new law did not respond to requests for comment.

Government officials say that they will not pay a cent for those shares.

“Our contribution is the platinum they are taking from our soil,” said George Charamba, Mr. Mugabe’s spokesman. “They will get nothing more.”

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“What they seek to do is transfer wealth from rich white people to rich black people,” said Tendai Biti, Zimbabwe’s finance minister and a leader of the Movement for Democratic Change. “You are not creating any wealth, you are not creating any new jobs.”

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  • Natassia

    Africans are so dumb. Get the platinum out yourself then, you worthless idiot.

  • Nationalization of any and all assets owned by foreign firms is on the horizon. This is only the beginning. It’s basically extortion on a national level.

  • IKantunderstand

    Poor, Poor, Rhodesia, oops, zimbabwe, once the bread basket of Africa, now just another gimme some bread for my basket Way to go Mugabe, you stupid  derogatory noun for a black semi person. Kudos! Yay! You got rid of the British, you instituted black rule. How’s that woking out for you? Are you starving to death much?

    • chuck_2011

       interestingly the Zimbabwe economy has grown every year for the last few years. Yet most live in abject poverty in a country that barely functions. I am surprised at how docile the average zim has proven to be. The old coot needs to go but the damage done to the farms and economy will never be repaired. They virtually killed the goose that laid the golden egg…in this case the white farmers booted form the farms and land. So stupid of them.

      • IKantunderstand

        I’d  like to believe that the economy of  Zimbabwe has improved. Please provide statistics to bolster your claim. “Cause I don’t  believe it for a second. Come on Chuck 2011, show me how great Zimbabwe is now vs, when it was Rhodesia. You know, regular stuff, like per capita earnings.

  • Jimmy Carter DID THIS. He should be PUNISHED to the fullest extent of the law for MURDER.

    He is proof of what a VICIOUS WHITE-HATING Socialist can do to Rhodesia – IMAGINE what that FILTH could have done here – today.

    IMAGINE WHAT Maobama WILL do.

  • Kurt Plummer

    CT1129,

    >>
    Whites should have never colonialized Africa…
    >>

    It’s not a Whites vs. Blacks issue.  It _never_ was.  Arabs and Indians were on the Dark Continent LONG before Stanley went looking for Livingston sir.  The Chinese are there now.

    If whites didn’t hold the reins of this resource rich environment, it would have been sucked dry by other ‘smart as serpent’ races.  The difference is that they would have painted their palaces in gold or some other silly thing whereas The West as The White has made technology and society blossom together into something much, much, more impressive as useful.

    Guilt for what has been done should not be allowed to overrule our awareness of what it has bought.  Because the only truth of life is that failure is starved and success is fed.  If we won’t stick to that NUMBER ONE premise of engagement in global realpolitik, we will be trampled from behind by those who do.

  • Kurt Plummer

    Actually, Mugabe may be onto something.

    They are called joint holdings companies.  Just as Zimplats is the subsidary of Implats to isolate risk and open outside investment within a distinct subdivision; by creating a JHC, you allow both sides to ‘own’ the profits, sans investment by one side, while the outside investor has control over all stock representation and thus all issuance of further debt instruments.

    ‘Profit’ being a cash payment relative to net sales -after- company payout to the investors.

    i.e. It’s a form of trust arrangement with a yearly stipend for Mugabe’s people.

    By allowing that 20% go to the black populace, Mugabe is essentially saying: “Okay, pay us off and we’ll let 40% of our half go to the peons to prove our intentions are greedy-but-good.”

    A JHC has another useful property:  If the country in question nationalizes the capital investment (hardware, real estate, trained workers etc.) then any stock representation on the world stock market is instantly closed and where this is linked to other, extranationally held, companies (for refining and shipping and marketing the platinum outside Zimbabwe etc.) the ability to profit from a defaulted position is _zero_.  Because it’s a closed shop environment.  Similar to what the Diamond Cartel did.

    No trading = No dividend.  For anyone.

    If you want a good example of whites doing this, look no farther than The Fed.  Which actually began with the USG paying private investors to make our currency for us by -first- issuing them loans which THEY charge -us- (the taxpayer) interest upon.

    It’s a dirt cheap way to kick over a business cycle as debt engine in getting an economy going.  And it operates on the same (initial) ‘something for nothing’ payout.  Of course, what started small in 1913 has grown into a monster of unslakeable thirst but I somehow doubt this is going to be problem in Zim which at least does indeed have something real with which to trade.

    The only reason the U.S. government doesn’t print it’s own currency is because that would be following the law of the land rather than giving charity handouts to the megawealthy private banking companies that represent The Federal Reserve as our Central Banking System.

  • anarchyst

    “One man, one vote, one time” is the norm for any African or communist country . . .

  • penetrate.blogspot.com/2010/…/racist-word-invented-by-ussrs-leon.html