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on the indigenization regulations
Congress of Trade Unions (ZCTU)
February 16, 2010
Congress of Trade Unions has been following closely developments
in the country over the past weeks with particular concern over
and Economic Empowerment Regulations. We believe this move that
is coming under the guise of empowering 'indigenous people' has
the potential to throw the country into anarchy just like the chaotic
land reform programme did. It is ironic that these regulations that
are anti-investment are taking centre stage when Zimbabwe is playing
host to a tourism and investment indaba.
ZCTU has noted the following with concern;
a. Insufficient stakeholder
involvement and participation in crafting this policy. Hence this
is just one of the top-down and populist policies being foisted
on the economy by government. This has unfortunately been a hallmark
of government policy formulation for a long time. Government does
not seem to be learning from its past mistakes. Even within the
inclusive government there is no accord and consensus on this regulation
with the MDC T alleging that they were also not consulted and involved.
This is a recipe for economic and political disaster.
b. The government does
not have the money to buy the majority shareholding in the targeted
businesses and there is a risk that this will result in another
massive expropriation of businesses by ZANU PF linked gurus along
the lines of the chaotic and negative-sum game of the land reform
c. The regulations will
create disincentives for private sector and enterprise development
and initiative as well as calculated risk taking. There will be
no creation of new wealth since government will simply help itself
to other people's sweat and efforts by expropriating existing businesses.
The role of government should be to among others create an enabling
environment that allows businesses to flourish and create more employment
opportunities for the workers.
d. The regulations will
discourage investment inflows into Zimbabwe. Already there is a
lot of uncertainty concerning these regulations and this uncertainty
raises the country risk premium of doing business in the country
and thereby raising the cost of doing business in Zimbabwe.
e. The regulations
show that the government is ignorant of its strategic role in economic
development. No government the world over has successfully developed
on the back of expropriating businesses.
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