Maravi

(TALKZIMBABWE) Indigenization and hope for the future

Indigenization and hope for the future
Mon, 15 Feb 2010 04:28:00 +0000

ONE of the most gnarled and disingenuous arguments about Zimbabwe is that its people are mollycoddles incapable of developing themselves and running big viable businesses.

Interestingly, the same people who advance that argument are the same ones who argue that the brain drain has dealt the worst blow on the country; in recognition of the fact that the biggest asset Zimbabwe has is its people.

The paradox is that Zimbabweans have helped develop countries like South Africa, Botswana and even Great Britain with their businesses and skilled pool of engineers, lawyers, doctors, nurses, teachers, accountants and so forth.

These hard working men and women are the same ones credited for making Zimbabwe "the breadbasket of Southern Africa" after independence in 1980.

Indigenization in Zimbabwe is given a wildly disproportionate weight in the national debate on development. Right-wing opinion proclaims incessantly that indigenization and empowerment law is bad as it scares away investors.

That argument is weak.

India has been pursuing indigenization with greater fervour over the past few decades, recording major successes. The country pushed ahead with equipping its businesses with indigenous products. Today 70% of business resource requirements are met in-country.

Zimbabwe is endowed with many natural resources and its extractive industry is probably the most untapped and the most sought after in the world. The only way to include local businesses in the extractive industry, is to have indigenization policy.

Indigenization will counter the marginalisation of Zimbabwean companies by multi-national corporations in the context of globalization.

A 2008 survey of developing countries revealed that small businesses accounted for over 70% of total number of enterprises. Furthermore, they employ over 60% of the population.

The only way to promote these enterprises is to have indigenization laws that protect them, and cushion them from harsh competition from foreign-owned big businesses.

A lot of foreign investment comes from the United States. The suitability and efficacy of North American businesses and practices in non-Western contexts have been questioned.

Zimbabwe does not necessarily need people versed in the way the westerners do their business. Zimbabweans in Britain must do business according to British practices and laws.

Zimbabweans do not ask for more: If foreigners want to do business in Zimbabwe, then they must conduct business according to the laws of Zimbabwe. Zimbabwe's rules, laws, regulations and practices are paramount.

Local legislation will not hinder companies from investing in resource rich countries like Congo, Nigeria, South Africa, Sudan and Zimbabwe .

Take Nigeria, for example. Suppose Nigeria's Federal Government levies a healthy 50% to 80% tax on companies' windfall profits (which is not unusual in western countries), oil companies will still make a healthier profit than most companies in the western economy.

Where else would Exxon Mobil makes US$1,300 in profits a second, or Royal Dutch Shell US$990 a second, or British Petroleum US$660 a second, or Chevron US$590 a second, or Total US$570 a second; except in Nigeria? Even if they were to own 49% of those companies, they would still remain in that country.

The debate on indigenization should focus on the nature and implementation of the indigenization legislation, rather than its morality. The morality is unquestionable.

For indigenization to succeed, various initiatives should be explored to support and develop indigenized businesses, for example New Ventures Investor Forums, that bring together financial, government,
and business communities to generate mechanisms to actively support these businesses.

President Mugabe and Zimbabwe have emabarked on the long lonely road towards addressing issues sorrounding the centuries of plunder of its immense wealth and denial of its people. It is a dangerous, but necessary, road. It is a lonely road that was travelled by Patrice Lumumba, Kwame Nkrumah, Queen Nzingha, Yaa Asantewa, Shaka, etc.

Those who plundered Zimbabwe with such lack of compassion and with scant regard for the majority, should first look themselves in the mirror, before they criticize what is truly the only way to redress a colonial imbalance.

Zimbabweans have never been as hopeful of the future, and of becoming that which they saw in others, as they are today.

Enter comments and suggestions below or email: itayi *** talkzimbabwe.com

Labels: BEE, INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE)

posted by MrK @ 5:14 PM