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(NEWZIMBABWE BLOGS) Indigenisation and curse of land reform

Indigenisation and curse of land reform
Posted By Joram Nyathi on
1 Apr, 2010 at 5:11 pm

IN HIS intriguing book, The Problems of Philosophy, British philosopher Bertrand Russell criticises “absolute sceptics” who claim nothing can ever be known with any certainty.

While criticism is the hallmark of philosophical inquiry, he brands the sceptics’ approach as “destructive criticism”. This form of criticism is meant to destroy the spirit of inquiry after the truth. We have something akin to that kind of criticism in the current controversy over indigenisation in Zimbabwe.

Debate presupposes rational discourse where people try to balance their views. In our case, the discourse has shifted from the merits and demerits to outright opposition to indigenisation as a policy. Those who debate have become so dogmatic about methodology that this has become an end in itself, like the parallel debate on the constitution-making process. The process has become an end in itself with Lovemore Madhuku campaigning against a constitution which doesn’t yet exist.

The “destructive criticism” of Zimbabwe’s indigenisation policy revolves around at least three disempowering pillars:

• Only Zanu PF fat-cats will benefit;
• It will fail like the fast-track land reform;
• It will chase away foreign investors.

The conclusion is that it cannot be done.

To tackle the issue of Zanu PF first: Suppose it was true, why is it so repugnant for say 50,000 indigenous people to control 50% of the economy but it is politically and morally correct for 4,500-6,000 whites to control 75% of the same when the mode of coming by such control is the same — usurpation?

To me the Indigenisation and Economic Empowerment Act seeks merely to reverse that order. Nobody said people should not be compensated for their investment.

Second, Zanu PF fat-cats can only benefit alone if the rest of us miss the vision and become obsessive about methodology. That is how the land reform was turned into a Zanu PF affair.

Already, ordinary people are being deceived to shun indigenisation as another devilish scheme by Zanu PF for self-enrichment. Beware of these cheap divide-and-conquer tactics. We risk being bitten twice in the same argument.

Third, the real debate should be on how to make it almost impossible for the rich to get super-rich after benefiting from previous affirmative action programmes. The idea is not to take from a white minority to give to a black minority. The debate is how Mr & Mrs Allofus can mobilise resources to be part of the 50,000 imaginary Zanu PF beneficiaries of indigenisation.

Fourth, the racial overtones in the debate have clouded the overall vision of indigenisation and turned the discourse into an ideological contest between political parties. There are hundreds of Zimbabweans in the Diaspora who want to leverage their resources to benefit from the 51% to be ceded by the huge conglomerates. Instead, they are being made to fight over a policy initiative meant to benefit the majority if properly articulated and executed.

I find it pointless to respond to proponents of another willing-seller, willing-buyer model. I wonder whether such people are aware of how farmers paid only lip-service to supporting the same approach on land in the 1980s and early 1990s and how it failed because those who “owned” land believed it was “private property” to be sold at the grotesquely inflated “market price” because they didn’t want to share fertile land. The major difference this time is that short of insider dealings, the “market price” for most listed companies is in the public domain.

Another errant argument is that everyone should start their own companies. Even the Bible acknowledges that the poor shall always be with us. It is the duty of every responsible government to try and reduce their number or at least ease their suffering. That is why Barack Obama is passionate about health policy in the US. That is why there are unemployment benefits in the UK. That is why the welfare doctrine is so strong among in Nordic and Scandinavian states.

In Zimbabwe, you will be told all this is about cronyism, patronage, corruption or downright mismanagement. We can’t all be self-sufficient, let alone entrepreneurs.

Indigenisation will fail like the fast-track land reform, so we are told. To start with, most of the people advancing this argument don’t want to visit the tobacco sales floors to witness the riches farmers are reaping from the land and the properties they are buying in town.

They are also not interested in talking to the new farmers themselves to hear their side of the story. How can a one-sided tale about the SADC Tribunal ruling and the plight of 79 white farmers be the whole truth? What about Justice Bharat Patel’s landmark January judgement on the land reform policy?

Second, what is needed are not louder prayers for indigenisation to “fail” like the land reform. What is needed is debate on how it can be made to succeed without avoidable dislocations in the economy. There is no disputing that to a large extent, the land reform was chaotic. But that is not the only reason it “failed”.

Land reform “failed” mainly because there were “interests” which didn’t want it to succeed. Most such interests controlled finance, technical skills, the manufacturing, storage and supply of fertiliser and seed production. They had the connections to markets for the produce and sources of equipment and machinery. Above all, they had a voice which could be heard far and wide.

Suddenly all banks closed their agro-business sections which were dedicated to supporting farmers because without title, land had become “dead capital”. In their headlong rush to grab what was on the farms, those who responded to the fast-track land reform forgot about tomorrow – that they didn’t control the whole supply chain. Left on barren lands with neither skills, fertiliser nor financial resources, they vandalised some of the irrigation infrastructure.

Indigenisation will “fail” if the debate is not focused on financing the various small-scale enterprises already in existence to enable more people to purchase shares in big companies. Resistance will be immense.

Niccolo Machiavelli quickly comes to mind: “It ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has, for enemies, all those who have done well under the old.” Who is resisting change?

Third, closely linked to the land reform were sanctions to make sure it “failed”. Normal human behaviour is that once someone gets into trouble, regardless of however foolhardy their behaviour leading to the present calamity, we assist them by, if necessary, putting them on a life support system. In Zimbabwe’s case, not only was the life support system withdrawn, an albatross was tied round its neck to punish the “innovator”. Sanctions became the United States’ Marshall Plan.

It is tempting to speculate that the maintenance of sanctions on Zimbabwe is to make sure the economic recovery takes long and is as painful as possible. As early as 2005, we were already being told by “experts” it would take at least 15 years for the economy to recover to 1997 levels. By 2008, it must have been 25 years. But Zimbabwe’s dramatic stabilisation with the introduction of the multicurrency regime in January 2009 demonstrated that this could be wild speculation.

The recovery period can be shortened even with the economy and infrastructure supporting more people than in 1997. Zimbabwe needs a humane Marshall Plan as originally conceived for Europe’s recovery from World War II by General George Marshall, that is to restore people’s confidence in the future of their own economy!

Investor flight is another favourite scare-crow. But for me that is the more reason why indigenisation is vital so that we are not perpetually held to ransom by the threat of withdrawal or withholding of investment money by aliens. Once indigenous people control 75% of the economy they constitute a formidable bulwark against the fickleness of international capital.

There is a limit to how far Philip Chiyangwa, Trevor Ncube, Strive Masiyiwa, Shingi Mutasa, Shingi Munyeza or Mutumwa Mawere can run away with their investments because they object to certain government policies. Even more, once they are the dominant group, their financial muscle should give them clout over those policies as key stakeholders. An alien only has an interest in our resources but his loyalty lies with his capital whereas a Zimbabwean owes loyalty first to his country.

We need investment, yes, but not at our own expense.

Second, it is not clear what figures are involved when we talk about investor flight. The Indigenisation Act is a fairly new law. Why were we not getting a deluge of investment before it was enacted? What guarantee is there that stopping indigenisation will bring huge foreign investment when this is tied to nebulous benchmarks which are interpreted subjectively? Who will pass us the test?

The trouble with Zimbabweans is that we have been taught self-contempt, and not only have we internalised it but have turned it into a fetish and a source of national pride. Matters of bad governance and corruption plague all nations and solutions to local problems can never be outsourced to foreigners. God gives every nation enough brains to match the problems it creates.

Third, Zimbabwe has a lot to commend it for the serious investor, from a vast variety of minerals to excellent soils, road and rail networks, natural attractions and a fabulous weather. No long-term investor will run away because of scare-mongering by those who have become slaves to the experience of past failure.

Serious investors mainly need explicit and consistent policies so they can hedge their bets. Have people stopped climbing Mt Everest because there is a possibility of dying? Can investing in Zimbabwe be more treacherous than trying to climb Mt Everest?

We are also told that investors need special treatment because they create employment. That might be true but what is the value of that employment? How is this better for me than owning a big stake in the company? One investor here in Zimbabwe often advises people to buy a company, not shares. That is, when you decide to invest in a company do it in a big way; try to indigenise it if you have the resources.

Still on employment creation, AFP news agency recently did a feature on the plight of garment factory workers in Bangladesh. These are produced for giants such as Wal-Mart, H&M, Correfour and Levi Strauss.

Quote: “Bangladesh’s 4 500 garment factories are the country’s largest employers providing jobs to 2,5 million people or 40% of the industrial workforce. Last year the country was one of the world’s top three garment exporters, with shipments up 10% to US$12,3 billion – around 80% of the country’s total exports.”

Impressive, you think. The working conditions are appalling while the wages are a scandal. Workers are paid US$25 a month which they say can’t buy food or pay rent. While exports last year hit a staggering US$12,3 billion for the Western companies, the 2,5 million employees together got a measly US$750 million in wages. That has been the situation on Zimbabwe’s farms since before Independence, even after the black government set minimum wages for the sector.

The destructive criticism against newly-resettled farmers for low productivity is largely unmerited given the lack of skills and resources in addition to the forces ranged against the land reform programme. It is not a secret that farming is heavily subsidised by the state in much of Europe and the US.

Closer to home in South Africa, white farmers recently threatened to quit if the government removed subsidies. They have been at it since Jan Van Riebeeck was governor of the Cape Colony in 1653 — using slave labour, yet Zimbabwe’s new farmers are supposed to be weaned off and self-sustaining in just 10 years, failing which black empowerment must be stopped!

We all learn something from open debate and criticism. It need not be destructive criticism.

Joram Nyathi is Jomic communications manager. He writes here in his personal capacity and the views expressed have nothing to do with those of Jomic.

Labels: INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE), JORAM NYATHI, LAND REFORM

posted by MrK @ 9:43 PM