"Invest in Zimbabwe" conference – By invitation only

It could only happen in Zimbabwe. In the same week that President Robert Mugabe twice threatened — in the most explicit terms — to expropriate foreign-owned firms, the British investment magazine Euromoney hosted an “Invest in Zimbabwe” conference.

Speakers across the political aisle from Mugabe’s Zanu-PF include prime minister Morgan Tsvangirai (MDC), who favours “indigenisation” of foreign firms, but only if the shares are paid for, not taken. He also believes, apparently, that Zimbabweans should be satisfied with ownership of less than 51% , though he is fuzzy about the details.

This is hardly a promising backdrop for an investment conference, especially as Mugabe and his colleagues have made it clear there are different categories of foreign investors. Those from the EU, North America or Australia are not welcome, but those from emerging markets are.

Mugabe’s defence minister and heir apparent, Emmerson Mnangagwa, is demanding the top management of Western multinationals in Zimbabwe should go on television to denounce their parent companies for supporting sanctions against the 100-odd top Zanu officials. Foreign-owned banks, including SA’s Standard Bank and Old Mutual, are accused of refusing loans to officials on the sanctions list.

Mugabe’s main targets are in banking (Barclays, Standard Chartered, Standard Bank, Old Mutual), mining (Anglo American, Impala Platinum and Rio Tinto) and manufacturing (Unilever, Nestlé, BAT, Colgate). The list of foreign firms with assets in excess of US$500000 runs to over 700 , but to date government has taken no action.

Indigenisation minister Saviour Kasukuwere has several times promised to publish final regulations “soon”, but business leaders are still in the dark. No-one wants to discuss how they will respond if and when Mugabe’s threats are translated into action. Few believe Tsvangirai will be of any help.

Publicly, organised business says it supports the “principle” of compulsory levels of black ownership. Privately, business warns that the economic impact will be as unfavourable as Mugabe’s reckless expropriation of white-owned farms.

Those who are more far-sighted worry that Mugabe’s overtly anti-Western stance is not just deterring traditional investors but attracting the “new exploiters” from Asia and Latin America. They fear it will foster crony capitalism that pays scant attention to corporate governance, while benefiting those in high places .

This is precisely the kind of conspiracy of elites that has recently come to grief in the Middle East.