Back to Index

Arrests: business pays for unholy alliance
Shakeman Mugari, The Zimbabwe Independent
February 16, 2007

http://www.theindependent.co.zw/viewinfo.cfm?linkid=21&id=10008&siteid=1

BUSINESS leaders last week finally woke up from their long slumber when they reacted angrily to the arrest of two colleagues for allegedly increasing the price of their commodities without government approval.

They were responding to the arrests of Mike Manga of Blue Ribbon Industries and Ian Kind of National Foods who have since been charged with increasing the price of flour without government approval. In fact, the two had simply sought permission to raise the price and were yet to do so.

In a statement quite rare for its frankness, Zimbabwe National Chamber of Commerce (ZNCC) president Mara Hativagone said the business body "strongly condemned the arrests of the managers as it is too high-handed and unwarranted".

The immediate past-president of the organisation Luxon Zembe was equally forthright, saying the arrests showed that government was not acting in good faith with the business sector.

"We have come to a stage where we are saying this (harassment) has to stop," Zembe said.

But in their dismay at the state’s heavy handedness, one could not help but feel that not only had the leaders woken up to reality too late, but they were responding to symptoms of a poisoned environment that they could have avoided had they taken a bold stance from the onset.

It was a cry too late and there are very slim chances that government will relent from prosecuting the business leaders.

It was unfortunate however that instead of taking that opportunity to tell government home-truths about the real causes of the economic collapse, the ZNCC leadership once again spiced their statement with the same apologetic undertones in their dealings with the state. It was clear that although they were unhappy with the arrests, they were being careful not to antagonise their cosy relationship with the authorities.

Apart from that expression of concern by Hativagone and what Zembe said after questions from journalists, the rest was the same timid account of how they were prepared to work with government and their commitment to the proposed social contract. Part of the statement described the arrests as "unfortunate and regrettable" adding that they did not augur well for the proposed social contract.

Beyond that, the statement was silent on the fact that the arrests were a clear sign that government did not have any real interest in a social contract nor did it have any interest in restoring investor confidence, either local or foreign.

It did not tell government that business was operating in a toxic environment and that its actions would make the situation worse.

They were conspicuous by their silence on the fundamental issues such as the rule of law and the need for a conducive political environment where business would operate profitably without the state trying to impose price controls, a policy that has failed everywhere it has been tried — including here.

Analysts say business’ response to the arrests is coming too late when government has already entrenched a culture of aggression against the business sector.

They point to the arrest and eventual conviction of Lobels Bakeries managing director Burombo Mudumo for increasing the price of bread last year. There are genuine fears in the market that the crackdown on the business community will continue for as along as the sector does not take a strong position against government to stop the repression.

Judging by their timid attitude when dealing with government, it is highly unlikely that business will stand up to protect their interests. For seven years, business leaders have stood by and watched while government destroyed the economy through its damaging policies like land seizures and price controls. They have stood by arms akimbo while government harassed fellow business people.

Economic consultant Daniel Ndlela said it was shocking that business had since 2000 pretended that all was well when the economy was burning.

"For as long as they are silent, businesses will continue to be victims of a vicious state," said Ndlela. "They will eventually pay for their cosy relationship with the government."

It seems they are paying already.

Perhaps the main reason business leaders are completely unable to criticise government is that they have become trapped in the web of patronage and clientelism that political leaders have elevated to a national policy.

They have bought into Zanu PF’s warped definition of patriotism which encourages silence on national issues.

The result is that the leaders and their organisations become concerned with being politically correct instead of protecting their interests and those of the country. It’s no longer about the economy and business but the farm in Norton, Marondera and Macheke.

Most business leaders including those of listed companies are beneficiaries of the land reform and are therefore too compromised to criticise government policies.

That is why they remained mum when companies like Ariston, Interfresh, Border Timbers, Triangle and Hippo Valley were losing their farms to invaders and with them key export markets. They were silent when companies like Zimsun and Rainbow Tourism Group’s farms were invaded. The reason is not difficult to find: they were beneficiaries of the state pillaging of private property.

The issue is not that they didn’t deserve the farms but that they certainly used their political connections to get land especially in the prime areas. The fact that they were collaborating with government means that they are equally culpable in the random vandalism of other businesses.

"They are now faced with a situation where government is making their businesses unviable by damaging the economy but they are too compromised to speak," Ndlela said.

This culture of patronage has also manifested itself through the allocation of farming inputs and concessionary loans from which the business leaders have benefited.

It has become a common but embarrassing sight to see the leaders falling over each other to shower praise on the Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono after every monetary policy statement even if some of the decisions hurt their businesses.

The best they can say is that "the governor tried his best under difficult conditions". They dare not mention that by "difficult conditions" they mean government policies.

In private, the same leaders are vocal about the damage that government policies like price controls, fixed exchange rates and the land reform have dealt on the economy.

Dairibord for example, cannot get enough milk because dairy farms have been invaded and looted.

The latest case of this ambivalence came from the Confederation of Zimbabwe Industries president Calisto Jokonya who was in the media a few weeks before the monetary policy pushing for devaluation.

Jokonya told the Independent that devaluation was long overdue. It is therefore surprising that the CZI did not include this issue in the final recommendations given to Gono for inclusion in his monetary policy. The document signed by Jokonya mentions nothing about devaluation. This is despite the fact that the majority of CZI members are bleeding from the effects of the overvalued Zimbabwean dollar.

After failing to get devaluation from government, they turn the heat on the same consumers who have sustained their companies for years.

An economist with the Labour and Economic Development Research Institute of Zimbabwe, Prosper Chitambara, said businesses were "paying for joining the unholy alliance with government in the first place".

"The relationship is too comfortable especially at this time when government policies are threatening the very existence of business," Chitambara said.

Please credit www.kubatana.net if you make use of material from this website. This work is licensed under a Creative Commons License unless stated otherwise.

TOP