News from Zimbabwe, Qatar and Australia

Tuesday's World Events   —   Posted on September 3, 2013

ZIMBABWE – Robert Mugabe Sworn In for Another Five Years

After demolishing his rival and surviving a court challenge to his re-election, 89-year-old Robert Mugabe was sworn in as president of Zimbabwe on August 22, vowing to fulfill a campaign promise of transferring more corporate wealth to the black citizens of the southern African nation.

“This is what our people voted for. It must be the centerpiece of our development,” said Mr. Mugabe, in a speech that followed the ceremonial start of another five-year term, extending his 33 years in power. “We need a share in all ventures that exploit our nonrenewable resources.”

Up till now, the policy known as “indigenization” – which mandates that foreign-owned businesses hand over majority control in their Zimbabwe operations to government-approved investors [give away 51% of their companies to black Zimbabweans; Mugabe calls it a self-empowerment policy, which takes a 51 percent stake in all existing foreign owned businesses and gives it to black Zimbabweans] – has been only haltingly implemented since it was adopted by parliament in 2008. The main stumbling block was Mr. Mugabe’s coalition partner, former Prime Minister Morgan Tsvangirai, whose party said the policy as outlined would deter foreign investment and undercut the economy.

Mr. Mugabe’s inauguration comes 48 hours after the country’s constitutional court declared his win in the July 31 election valid, despite an initial challenge by Mr. Tsvangirai. The former prime minister later withdrew the challenge, saying his party was deprived of voter information to build its case. Mr. Tsvangirai boycotted Thursday’s inauguration.

Mr. Mugabe won 61% of the July 31 vote, but poll observers later found that many registered voters were turned away at voting stations, the electronic voter roll wasn’t provided and around one million registered voters were discovered to have been deceased. Mr. Mugabe’s Zanu-PF party denied it manipulated the vote.

Following the election, regional trading bloc Southern African Development Community signed off on the vote as free and peaceful and called on western countries to lift sanctions against Zimbabwe. But the U.S. said the elections weren’t fair and were seriously flawed. As a result, the U.S. said this week that it won’t change the sanctions it has against individuals and companies in Zimbabwe until reforms take place.

How Mr. Mugabe implements the indigenization plan could prove pivotal for an economy that was once the shining star of southern Africa. Mr. Mugabe’s green light for his political supporters to seize white-owned farms beginning in 2000 sent the economy into a tailspin and triggered hyperinflation. A troubled unity government, cobbled together after violent 2008 elections, managed to halt the free fall. But Mr. Mugabe had to abandon the national currency in favor of the U.S. dollar and surrender much of his control over the economy.

Now the octogenarian president, who will turn 90 in February, is back in the driver’s seat of an economy that is struggling with heavy debt and meager investment. …

QATAR – Emir Abdicates, hands over power to his son

(The news briefs above are from staff reports posted at The Wall Street Journal on Aug. 23, the Daily Telegraph on June 25 and Aug. 27.) 

Background

ZIMBABWE

In newspaper advertisements taken out following Mugabe's Zanu-PF win, the party promised a "unique" wealth-transformation program. Zanu-PF said there are still 1,138 companies that need to be "indigenized."

Zanu-PF...makes vast promises to raise billions of dollars from the indigenization deals which it will then translate to loans for small business and to improve roads and health care. To jump start that program, the party says it needs to complete more deals with companies.

Many of the country's biggest mining companies and banks, who have been identified as candidates for indigenization, still must sign indigenization deals. Yet talks to conclude the deals have stalled and won't resume until Mr. Mugabe appoints a new cabinet, expected within days. Already companies and the government have clashed over plans to seize the stakes without compensation.

"We won't give 50% away free," Anglo American Platinum Ltd.'s chief executive officer Chris Griffith said last month, just ahead of the election. The company this week said it "remains committed to implementing the approved indigenization plan" and that negotiations are still ongoing to be able to do this.

Mr. Mugabe's allies insist they will demand majority stakes without payment because the minerals in the ground belong to the country. Other industries such as banks, which unlike mines have virtual assets, and manufacturing, which creates jobs and brings new skills to the country, could receive more lenient treatment under the policy, according to the current Minister of Indigenization Saviour Kasukuwere.

Such a hard line has caused concern among investors and analysts. "It is still possible for investors in more lucrative sectors, such as mining and banking, to remain profitable although the long-term feasibility of operations remains in doubt," Charles Laurie, head of the Africa division at risk analysis company Maplecroft.

In the collision between Mr. Mugabe and foreign companies, workers have been caught in the middle. "The mine ownership should stay the same but the company should change its attitude to the people living here," says Gideon Takaway, who almost daily goes to look for work at a platinum operation near Harare. "I don't care about the politics, we just want jobs, clean water and electricity." (from the wsj article above)

ON MUGABE'S SEIZURE OF WHITE OWNED FARMS:

President Mugabe's administration had already redistributed the commercial farms owned by non-African farmers to poor native Zimbabweans. [Mugabe seized private property from one group - white Zimbabwean farmers - and gave it to another black Zimbabweans, without recompense]. This policy ended up chasing some white farmers out of the country, leading to a lack of any new investment and a huge decline in farm output. In a short time, Zimbabwe went from a net exporter of food to a net importer. This led to a rise in food prices because less food was being grown and harvested. Because the prices of food were too high for most people to afford, the president then set price controls on many products, discouraging production of the products. Many of these same items were available on the black market which led to an increasing inflation rate. (from wikipedia)

QATAR

Emir Sheikh Hamad bin Khalifa al-Thani:

• Ruled by the Al Thani family since the mid-1800s, Qatar transformed itself from a poor British protectorate noted mainly for pearling into an independent state with significant oil and natural gas revenues.
• As of 2007, oil and natural gas revenues had enabled Qatar to attain the highest per capita income in the world.
• Qatar has not experienced the level of unrest or violence seen in other Near Eastern and North African countries in 2010-11, due in part to its immense wealth. (from the CIA World FactBook)
• Qatar’s international image is bolstered in part by the Doha-based Al Jazeera news network.
• Since his rise to power in 1995, Qatar’s emir Sheikh Hamad bin Khalifa Al-Thani has hosted several Islamist leaders in exile while Qatar’s Al-Jazeera pan-Arab news broadcaster has provided an open platform for outlawed Islamists to air their views.
• The emir has maintained good relations with Hamas in particular.  And in October he became the first Arab head of state to visit the Hamas controlled Gaza Strip since 2007, a trip designed to increase political and economic support to the Islamist movement boycotted by the international community. (from middle-east online)

British perspective on the transition of power (from a June 2013 Daily Telegraph article):

• Sheikh Tamim has been the designated heir for almost a decade and has already put his stamp on some of the state’s signature policies, including the national development plan to make Qatar a global hub in the Middle East. While he has worked closely on Qatar’s bids for global events, including the World Cup and the Olympics, he has also taken a greater interest in political Islam.
• The new emir is said to be more religious than his father, and pressures have been growing on the government to do more to preserve Qatar’s Arab identity and conservative ideals.
• A personable [student when attending the best private schools in Great Britain], Sheikh Tamim has impeccable English and two accomplished wives.
• Tamim enjoys close ties with Western military officials and is seen as open and hard-working by foreign diplomats.
• He is also the prime mover behind Qatar’s close alliance with the Islamist Muslim Brotherhood, which has risen to power in Egypt and acted as the linchpin of the uprisings in Libya and Syria against the secular dictatorships.