[A-List] FT: Mugabe's Bills Pave Way for Takeovers

["Yoshie Furuhashi" <critical.montages@xxxxxxxxx>]

<http://www.ft.com/cms/s/40448d66-3a0b-11dc-9d73-0000779fd2ac.html>
Mugabe's bills pave way for takeovers

By Tony Hawkins in Harare

Published: July 24 2007 18:52 | Last updated: July 24 2007 18:52

Zimbabwe President Robert Mugabe announced three new bills designed to
tighten government control over the country's crumbling economy when
he opened a new session of parliament on Tuesday.

The new laws will force private companies to sell up to 51 per cent of
their shares to black Zimbabweans, allowing the government to take
control of mining properties and companies and establish a National
Incomes and Pricing Commission to set prices and wages for all sectors
of the economy. All three are scheduled to become law before the end
of the year.

In his speech, Mr Mugabe gave no new details of the proposed
Indigenisation and Economic Empowerment Bill – which includes the 51
per cent stake measure – which raised fears that the government might
move to take over foreign-owned companies.

In theory, the bill is aimed at empowering "disadvantaged" – black –
Zimbabweans, but it appears that this legislation could also be used
to punish what the government last week called "economic saboteurs" –
the companies that have been accused of profiteering out of the
economic collapse in Zimbabwe.

They have been the primary targets of the government's price cuts
policy, which was introduced earlier this month and was designed to
halve consumer prices.

Mr Mugabe thanked African and non-aligned countries for their
continuing support for his administration, citing the election of
Zimbabwe to head the UN's Sustainable Development Commission and the
thwarting of British and western attempts to have Zimbabwe discussed
by the Security Council. He repeated his government's accusations that
Britain and its allies had fostered civil unrest in the country in a
vain effort to show that the situation in the country was a threat to
peace and stability.

As Mr Mugabe spoke, the Reserve Bank of Zimbabwe published fresh
monetary data demonstrating the extent to which the authorities had
lost control of the economy. The RBZ's figures show money supply
growth trebling from 1,400 per cent at the end of last year to 4,212
per cent in April at which time inflation was 3,700 per cent. The
central bank revealed also that Zimbabwe's domestic debt spiralled
290-fold between March and July while official loans to banks
increased 40-fold over the same period.

Economists say the numbers confirm that inflation, currently estimated
at around 6,000 per cent on the official index suppressed by the
government, is being driven by the central bank's "quasi-fiscal"
operations – that is, credit creation to finance government spending.

In a second report illustrating Zimbabwe's rapidly worsening crisis,
the US-based Fewsnet, which provides food security information for 17
African countries, estimates that Zimbabwe will need to import at
least 1m tonnes of grain over the next nine months. The government has
so far announced plans to import only 400,000 tonnes of maize, mostly
from Malawi. By last month, 70 000 tonnes had been imported according
to Fewsnet, which says that "most households" have not been able to
meet their minimum food requirements because of rampant food inflation
and food shortages.

The UN World Food Programme has estimated that a third of the
population – about 4m people – will need food aid in the first quarter
of 2008.

Mr Mugabe also announced a constitutional amendment bill that provides
for the enlargement of parliament from 150 to 210 seats and the Senate
or upper house to 84 seats from 66.

--
Yoshie