FDI shouldn’t undermine indigenisation progress
Opinion & Columnist

FDI shouldn’t undermine indigenisation progress

by Bernard Bwoni
Zimbabwe has been left frazzled by aftershocks of imperialism and the firm hold of capitalism and that is exactly where the imperial state wants it to be. The squabbling over the flimsy, the soft and surface issues whilst the core issues are relegated to insignificance clearly highlights this. Imperialism manifests itself in many forms, but the end goal is always the same. Since time immemorial imperialism has sought to subjugate, conquer markets, to eliminate competition and to always protect its own domestic producers and markets.

The imperial state has always protected its areas of strategic importance and still does that through various ways and in fact frowns upon reciprocity in terms of all economic relationships hence the constant scrutiny of indigenisation and economic empowerment initiatives in Zimbabwe.

The imperial state operates in unison with its multinational corporations and indigenisation conflicts with imperialism. This is not an argument against foreign direct investment (FDI) but the never-ending case querying of the Indigenisation Act by bearers of FDI and the accompanying conditions illustrate the insidious and deeply-embedded role of imperialism in the mastery of markets and accumulation in the former colonial states like Zimbabwe, neo-liberal states and the protection of their domestic markets.

The country is confronted with challenge after challenge and the current dumping of imported manufactured goods from neighbouring South Africa is unsustainable and will not help in stimulating domestic manufacturing capacity. The Rand has fallen sharply against the United States dollar and the uncontrolled importation of cheap products is not bringing money into Zimbabwe.

There is capital flight as the stronger dollar is used in South Africa for products that are being brought into Zimbabwe for resale. The market is saturated with these cheap imports and this has seen prices falling drastically as there is no money in the country to purchase the products.

Prices are going to continue plummeting and the economy will continue to descend into deflation. It is a vicious cycle of trying to balance economic efficiency with social responsibility. Zimbabwe is basically buying more than three times what it sells and hence we have seen the trade balance worsen and the economy continuing to slide into chaos.

Zimbabwe’s manufacturing capacity will not be resolved by FDI alone but by reviewing the country’s infant industry, protection and other policies that encourage home-grown initiatives for economic growth.

Excessive and inessential imports have suffocated the domestic market and this has seen demand for domestic goods fare poorly as consumer preferences have understandably moved toward cheap imports in the current harsh economic climate. Domestic producers are left in a quandary as they are faced with limited choices to either produce less or sell at reduced prices.

This to some extent explains the closure of businesses as they cannot compete. This state of affairs is just not sustainable.

Zimbabwe, just like the majority of African countries, is faced with poverty and economic stagnation and that is not by accident, but by imperial design. It is the aftermath of imperialism and colonisation and indigenisation and economic empowerment are some sure remedies for these after-effects.

However, imperialism and capitalism by their very nature will always frustrate such initiatives as they thrive on the back of exploiting the developing world. This exploitation has taken many forms over the centuries with slavery, colonialism and resource extraction out of the developing world for the benefit of the imperial powers.

Capitalism, just like imperialism, works at disabling the developing world’s self-sustenance potential by putting breaks and blocks on economic progression. The developed world encourages those countries in the developing world to open up their markets which in most cases instantly eliminates domestic production and employment creation.

The problem with imperialism and capitalism is that they both have monopolies on development in favour of the already developed countries, which makes it impossible for developing countries to follow the same developmental pattern.

Without some form of government initiated protection, domestic production will continue to suffer. Zimbabwe will need to continue looking at policies that recognise the importance of managing trade with the main objective of facilitating and achieving real development and economic growth.

The country’s manufacturing potential lies in putting measures in place to protect domestic industries whilst gaining strength, absorbing new technologies and giving local communities enough time to build up capacity and manufacturing potential to compete on equal terms without the need for extended protection.

Foreign direct investment in Zimbabwe is welcome to facilitate the indigenisation and economic empowerment initiatives of the land. However, there seems to be this imperial intervention to neutralise and eliminate indigenisation to “make way for this investment that will finally bring Zimbabwe out of the economic mud”.

The fact of the matter is that indigenisation and economic empowerment in Zimbabwe is a direct threat to the economic hegemony that multinationals have enjoyed without question for a very long time. They have only known guarantees of 100 percent remittance of profits and minimal if any restrictions on how they conduct their businesses in sovereign states. Indigenisation and economic empowerment seeks to review that and ensure that the host country benefits from this investment in the country.

There is no point of investment in the country that does not benefit the country. Many of the strong Asian economies including China, Japan, Taiwan and South Korea started off by building up their international trading strength on the foundations of government protection strategies such as subsidies, tariffs and significant investment in infrastructure and skills development.

Zimbabwe’s current focus on rehabilitating and retooling of the country’s infrastructure is a step in the right direction. The next phase should be focus on developing key human skills through a thorough re-evaluation of the curriculum. Schools, colleges and universities cannot continue churning out graduates who cannot even make and package a single product year in, year out. Countries like Mozambique have registered stable economic growth on the back of high level protection strategies and Zimbabwe can take the same route.

Imperialism is still very much alive and the fact that the former colonies have remained underdeveloped decades after independence means Zimbabwe’s future can never be planned without referring to and narrating the colonial past. The development of Zimbabwe is inextricably linked to imperialism and that is a reality that has to feature in any developmental dialogue on Zimbabwe.

Colonisation reconstructed and distorted the Zimbabwean development pattern and today the very same system works clandestinely to continually squeeze the country of its natural resources. Indigenisation and economic empowerment seeks to restore the original patterns that will see the country on the path towards total economic emancipation.

The indigenisation and economic empowerment route is the only sure way towards equality and mutually beneficial co-existence in this global village. This brings about competitiveness and real development, not these promises of FDI which never seem to materialise.

Developing countries depend largely on exports when it comes to supplying goods and services anywhere in the world.

Technological advances have meant that noble policies like indigenisation and economic empowerment are forever ridiculed and gimmicks like globalisation are thrust forward as the panacea to Zimbabwe’s economic woes. The fact of the matter is that with technological advances the erstwhile colonisers maintain their advantage whilst the former colonies continue to lag behind sitting on top of resources. The government is right in allaying fears about the policies and offering reassurances to would be investors in the country.

For Zimbabwe, indigenisation and empowerment initiatives have to translate into economic growth and job creation to be taken seriously by the ordinary man and woman. Capital formation has to increase as a result of economic empowerment and foreign direct investment.
Once the benefits of the policies start trickling down to everyone then the full potential of these noble policies will be realised.

In this bigger “global” economic village markets can no longer be left to operate alone because the impact on the poor is devastating as these free markets are often the preserve of the loaded and powerful multinationals to make quick, easy and extraordinarily large profits from their investments. Developing countries have very little benefit from it all. This is where the indigenisation and economic empowerment policies in Zimbabwe come in handy.

The country has to effectively manage the markets for the benefit of ordinary people. The international lending market used to be solely controlled and managed by the IMF and World Bank and poor developing countries have struggled with the conditions set for lending.

Many African economies have been exposed to economic structural adjustment programmes which have produced disastrous results. The emergence of the Asian Infrastructure Investment Bank has seen China offering crucial developmental loans to struggling economies with very little of the conditions that used to be imposed by Bretton Woods institutions.

The impediments to economic empowerment are many but have slowly been reducing and hopefully economic recovery will continue.

bernardbwn@aol.com/ bernardbwoni.blogspot.com

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