Mugabe pushes racist business plan

NY Times:

Zimbabwe’s government has put forward legislation that would require virtually all publicly traded companies to cede controlling interests to “indigenous” citizens, raising the possibility of a sizable redistribution of the country’s remaining wealth at a time when its economy is collapsing.

The draft legislation, which was published Monday, would mandate that a 51 percent stake in the companies be transferred to Zimbabweans who were “disadvantaged by unfair discrimination on the grounds of his or her race” before April 1980, when the nation won independence from white rule.

The government calls it a plan for black empowerment, while critics label it a bid to shore up crumbling political support for Zimbabwe’s president, Robert G. Mugabe. Given that Mr. Mugabe’s party dominates Parliament, the measure will almost certainly pass.

The legislation would establish a government fund to help citizens buy stock in public companies, and would allow the government to reject any corporate mergers, acquisitions, investments and other transactions in which so-called indigenous Zimbabweans did not hold a 51 percent stake. It was unclear, however, how Zimbabwe’s bankrupt government, beset by hyperinflation and a currency crisis, would finance the transfers.

Nor was it apparent how the companies’ new controlling stakeholders would be chosen. The law apparently contemplates black workers at companies taking stakes in their employers, a move that would surely win Mr. Mugabe some public support as he prepares for what could be a difficult re-election campaign in early 2008.

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It appears he wants to do for business what he has done for the agriculture sector in Zimbabwe. When it comes to economics, Mugabe must believe in magic. So, how is the government going to pay for this transfer? What else, print more worthless money.

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