The Sunday Mail
How special are special economic zones?
BY Rangu Nyamurundira
Shall they be made more special than the creation of empowered societies of indigenous people which Zim-Asset underlines as the backbone to establish and grow a new indigenous economy?
Are those blindly promoting SEZs intending to carve out geographic enclaves within which to make sacred FDI monopoly over our economy, while exorcising an indigenous empowered society’s legitimate claim to equitable participation?
In February 2015, the National Assembly adopted a motion for expediency in creating SEZs to revive the economy.
The Zanu-PF MP who moved that motion urged Government to incentivise FDI, specifically by guaranteeing 100 percent foreign ownership of companies operating in SEZs.
Such a motion seeking to kill off indigenisation has been moved by a Zanu-PF majority Parliament contrary to the 6th National People’s Congress resolution which bemoaned indigenisation’s loss of momentum and called for it to be reinvigorated.
Surely SEZs, as reasoned in Parliament, will not reinvigorate indigenisation but castrate it.
The same Parliament whose majority was guided by the ruling party’s ideological objective on indigenisation now dithers, walks a slippery slope where they charge indigenisation as FDI’s boggy man and propose to purge a people’s economic revolution via SEZs.
One economic analyst summed up the proposed SEZs thus: “These people are clever; this is a strategy to go around the indigenisation law which the West is against.
“Attempts by the West to have the law amended to suit them failed miserably, but now they are emerging victorious coming under the guise of a system that will accelerate the growth of the economy.”
Is that the new legislative intent through our Zanu-PF Parliamentary majority, to establish clusters of foreign economic privilege?
We have reason to be wary then, we the indigenous majority who mandated politicians to establish an “empowered society”.
Zim-Asset’s vision for “an Empowered Society and a Growing Economy” speaks to SEZs, but certainly not as an antithesis of indigenisation.
Zim-Asset promotes SEZs within the context of “increasing economic opportunities in communities in conformity with indigenisation and empowerment”.
Yet what we are seeing is a quick fix that will not require the hard work, discipline and integrity that comes with establishing an empowered society growing its own economy.
Already, Parliament through Finance Act No 3 of 2014 has made ill-conceived moves to decentralise and scatter our economic revolution across line ministries, in the name of bringing so-called clarity. Ironic!
The foreign investors for whom indigenisation is being strangled in the name of “clarity” are more confused aren’t they, having long engaged the Ministry of Youth, Indigenisation and Economic Empowerment and agreed on how to achieve compliance with the law.
Now that those investors who have always been hostile to indigenisation see the dissolution of its centre and a limping enforcement mechanism.
And still they blame the very indigenisation programme they weaken and confuse. In such an environment we find Parliament moving a motion for SEZs that will effectively do away with any indigenous claim to ownership.
It will be open season for any line ministry driven by expediency and short-term gains.
Simply because SEZs are supported by UNDP, the World Bank and the African Development Bank we should believe that they are the messiah.
Remember ESAP? We ate that gospel only to suffer severe economic constipation. Is Africa’s most educated Government to be made look like puppies wagging their tails with every new trick that foreign investors come up with?
Let us consider for a moment the rationale behind the motion for expediting SEZs by politicians whose mandate came from the promise to indigenise.
The motion would want to reason that SEZs will attract FDI, but at the expense of indigenisation. The assumption is that indigenisation itself does not provide any incentive, but repels investors.
Really? Have they understood the policy and its legal provisions?
When the likes of America’s ambassador here parrot that indigenisation must be clarified for FDI to flow in, as he did during America’s June 27 seminar ironically for Zimbabwe’s economic recovery, he is feeding the new charge against indigenisation, designed to throw us off our path and keep us moving in circles.
Dear ambassador, there has never been anything unclear about the indigenisation policy and its legislative intent.
President Mugabe has been consistent in explaining policy, including to potential investors.
But we will explain again for those unintelligent enough not to grasp simple things. Where FDI looks to Zimbabwe’s natural resources like minerals, wildlife, forests and water, we shall own 51 percent of wealth derived there from.
Zimbabwe has huge quality deposits of diamonds, gold, platinum, chrome and tungsten among others.
Any serious businessperson surely must see the value in such minerals as greater than his/her borrowed capital.
And we all know, that the borrowed capital is readily given by their banks knowing that the money and interest will be serviced by wealth extracted here. The natural resource is an incentive on its own.
The challenge has been our conduct as Government, as a people, in tainting the attractiveness of and doing business with these resources.
It has nothing to do with discarding indigenisation; but all to do with the ease and integrity in engaging FDI, unhindered by bureaucracy and frustrations of corruption and entitlement.
Indigenisation has nothing to do with a foreign investor, already agreeable to a 51 percent indigenous share, being denied a license by a local authority demanding an exorbitant fee upfront.
That particular investor walked away, went elsewhere, beyond our borders where gold also lies.
What has indigenisation to do with an indigenous partner abusing political muscle to force a European investor out after injecting their capital?
What message are we sending to his fellow investors who are willing to invest in a 49 percent share?
Is indigenisation the one giving investors already resident in Zimbabwe second thoughts because their children are frustrated when try and get visas to visit their family here?
Is that not about corrupted and bureaucratic immigration systems?
Many Zimbabweans suffer from a gross and crippling sense of entitlement and belief that the world owes us something. No comrades — the world owes us nothing. We have title over our resources and we should exploit those sustainably. And what of indigenisation in sectors that do not involve natural resources but where business is established primarily on foreign capital injection and imported expertise?
Again our President has been consistent that policy is flexible and negotiated.
Naturally, investors in sectors like manufacturing want control.
But certainly the solution is not as simple as calling for 100 percent foreign ownership in SEZs.
Rather, why not trade off a percentage of equity in return for economic empowerment initiatives?
The Indigenisation and Economic Empowerment Act has from inception given provision for such flexibility.
The Act gives discretion for a “lesser” indigenous share than 51 percent, for a specified period and in return for “socially or economically desirable objectives”.
Such desirable objectives include development work in communities; beneficiation to a specified extent of raw materials, transfer to a specified extent of new technology, the employment to a specified extent of local skills or the imparting of new skills, and any other objective.
Is that not preferable to writing off indigenisation and empowerment in the name of SEZs?
We are our own enemies, given to corruption and entitlement that only sees quick fixes but never the long-term call to hard work and integrity that will attract FDI to an indigenising economy sustained by empowered society of our indigenous majority.
Indigenisation must maintain a central enforcement authority, at least until we are confident that all those we elected to Parliament and who have been appointed to Government share President Mugabe’s vision.
Until then, beware the ides of SEZs.
Rangu Nyamurundira is the acting corporate secretary at NIEEB and a member of the Zimbabwe Youth Council Board. His views are his own, do not represent those of institutions he is associated with.
