via Australia takes ‘wait and see’ stance on Zimbabwe | African Business | BDlive by Brendan Ryan
The Australian government is in “wait and see” mode over developments in Zimbabwe following the recent elections, but believes the country at this stage is a “very risky place for people to invest”.
That is the view of Australia’s ambassador to Zimbabwe, Matthew Neuhaus, who was addressing the Africa Down Under conference being held in Perth, Western Australia, on Thursday.
Two years ago Mr Neuhaus appeared more optimistic on the country’s prospects when he told delegates at the same conference: “There is a considerable difference of views on the issue of indigenisation and the requirement for 51% indigenous ownership is not a position endorsed by the Zimbabwean cabinet.
“I believe that by the end of the year there will be greater clarity on indigenisation and in a more positive direction.”
Asked what had happened at question time, Mr Neuhaus denied being unduly positive or negative and maintained that Australia’s view on Zimbabwe for the past two years had always been one of a cautious “wait and see” approach.
Mr Neuhaus said he believed a 51% indigenisation requirement, to be introduced over an extended period, was “doable” but proposals made by President Robert Mugabe during the election campaign to go for 100% indigenisation would be “the end”.
Mr Neuhaus pointed out that the gross domestic product of neighbouring Zambia was already three times that of Zimbabwe, which he said was “unimaginable to those who know Zimbabwe”.
It remained to be seen whether this was just political rhetoric meant for electioneering, Mr Neuhaus said, and the next month would indicate the way things were likely to go.
“We are hopeful that a sound economic policy will emerge but there is another factor to be considered and that is the chaos factor.
“There are people who might do things that are against the economic interests of the country because it is in their own personal interests to do so.”
Mr Neuhaus said key social and political issues included how the new government would approach Zimbabwean civil society -in particular, the political opposition -as well as developing a succession plan for Mugabe.
On the economic front Mr Neuhaus said any move at this stage to reintroduce the Zimbabwean dollar to replace the US dollar would be “disastrous”.
He said the imposition of a 100% indigenisation requirement on the country’s banks would result in the collapse of the banking sector and any move to require 100% indigenisation by the country’s mining companies – in particular Zimplats -would be “the end” of Zimbabwe’s mining industry.
Zimplats – which is listed on the Australian Stock Exchange – is Zimbabwe’s largest platinum producer and is controlled by Impala Platinum.
Mr Neuhaus said the influence of the West on the Zimbabwean government was limited because Western nations and corporations were not able operate in the way that other countries, such as China, were.
“The Chinese take a very different approach to doing business and the Chinese are very close to Zanu (PF). The Chinese now own large tracts of agricultural land in Zimbabwe and a Chinese company, Anjin, is the largest of the three companies mining the Marange diamond deposit.
“Anjin is part of a larger Chinese defence-industrial conglomerate which has other business interests in Zimbabwe.”
Mr Neuhaus described the marketing arrangements for the diamonds produced from the Marange mine as “opaque”.
He said Marange generated about $1bn in revenue a year, which meant about $400m-$500m should be reflected as royalties and taxes in the country’s national accounts.
“Former finance minister Tendai Biti has told us the Treasury received about $40m for the first six months of this year and about $200m for the whole of last year from Marange.”