Magazine article New African

Empowerment: What Others Did: Zimbabwe Is Not the First Country to Implement an Indigenisation and Economic Empowerment Programme. Almost All the Rich Nations of the World Have Done It in Various Forms at One Time or Other

Magazine article New African

Empowerment: What Others Did: Zimbabwe Is Not the First Country to Implement an Indigenisation and Economic Empowerment Programme. Almost All the Rich Nations of the World Have Done It in Various Forms at One Time or Other

Article excerpt

IF YOU HEAR CRITICS ATTACK ZIMBABWE'S Indigenisation and Economic Empowerment Programme (IEEP), you might think it is the first country to embark on such a project, yet it is not. History shows that all the nations that have made a jump from poverty to wealth, embarked on some form of indigenisation and economic empowerment (IEE). They range from almost all the Western countries that today lead the table of rich nations to the recent economic success stories, such as Japan, China, Singapore, Malaysia, Taiwan, South Korea, etc. Even nearer home in Africa, South Africa and Namibia have implemented some form of IEE programmes in the past though they were not as successful as their citizens expected. Beyond Africa, India and Sri Lanka have implemented IEE projects in the past as well. So Zimbabwe is in good company and should not be shy to learn from international best practice as it moves ahead with its JEEP.

As two Zimbabwean academics, Jesimen Chipika and Joyce Malaba pointed out in a study last year: "There are various lessons learnt from regional and international experiences on successfully implanting IEE progammes. Firstly, IEE is a process and not an event, which requires a strong developmental state to drive it. A stable political and macro-economic environment, as well as investment in strategic economic triggers such as infrastructure and skills are prerequisites.

"There is a need [also] to balance between IEE and attracting foreign direct investment in strategic areas. IEE should be an integral part of all national policies at all levels, driven by tripartism between government, business, and labour to ensure sustained policy implementation."

In fact, economic history shows that all of today's rich nations used nationalistic policies such as tariffs, subsidies, restrictions on foreign investment, etc, to promote their economies and their people. So which countries' IEE best practice can Zimbabwe borrow from? The following is just a snippet.

United States of America

America's criticism of Zimbabwe's land reform and IEEP, and the imposition of economic sanctions on the country, stand in sharp contrast to what it did itself when a British colony and as a young, independent country. According to the South Korean academic and economic historian who teaches at Oxford University in the UK, Ha-Joon Chang, the USA had a terrible record in its dealings with foreign investors. From its earliest days of economic development right up to World War I, the USA was the world's largest importer of foreign capital, but there was considerable concern in the country over absentee management by foreign investors.

"Reflecting such sentiment," Chang recalls, "the US federal government strongly regulated foreign investment. Non-resident shareholders could not vote and only American citizens could become directors in a national (as opposed to state-level) bank."

This meant that foreigners and foreign financial institutions could only buy shares in US national banks if they were prepared to have American citizens as their representatives on the board of directors, thus discouraging foreign investment in the banking sector.

There were also strict regulations on foreign investment in natural resource industries. Many state governments barred or restricted investment by non-resident foreigners in land. Then the 1887 federal Alien Property Act was enacted to prohibit the ownership of land by aliens--or by companies more than 20% owned by aliens--in the by (as opposed to the fully fledged states), where land speculation was particularly rampant.

Federal mining laws also restricted mining rights to non-US citizens, while allowing them to companies incorporated in the US. In 1878, a timber law was also brought in, permitting only US residents to log on public land.

"Yet," says Chang, "despite all these extensive, and often strict, controls on foreign investment, the USA was yet the largest recipient of foreign investment throughout the 19'h century and the early 20th century--in the same way that strict regulation of transnational corporations in China has not prevented a large amount of FDI from pouring into that country in recent decades. …

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