Monday, March 1, 2010

Zimbabwe Commits Economic Suicide, Again

Jurist.com has confirmed that Zimbabwe's 2007 Indigenisation and Economic Empowerment Act took effect today. The law (read text) is a continuation of Zimbabwe's efforts to achieve levels of autarkic impoverishment not witnessed since Ceausescu's Romania.

The Mugabe regime began by seizing productive farms from European landowners and handing them over to indigenous people, who were not farmers, which led predictably to massive food shortages. The official website of the land reform program is here. The economic and nutritional consequences have been severe (see here). In a very short period of time, Zimbabwe went from being the "bread basket" of Southern Africa to unable to feed its own population, of which 45% are now malnourished.

Under the new law taking effect today, all companies with a value of a half million dollars or more must promulgate plans within 45 days to ensure that within 5 years they will be 51% owned by native black Zimbabweans. One does not have to be an economist to predict dire consequences from such a law for foreign direct investment. This law will surely harm the very people it is supposed to help: native black Zimbabweans.

Before he is done, Mugabe will have completely destroyed the Zimbabwean economy in the name of rectifying past injustices and achieving economic equality. All Zimbabweans, except Mugabe and  his cronies, will then suffer the injustice of great but equal poverty.

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