The rise of Chinese sweatshops in Zimbabwe

via The rise of Chinese sweatshops in Zimbabwe – NewsDay Zimbabwe March 4, 2014 by Paidamoyo Muzulu

PRESIDENT Robert Mugabe’s government remains unfazed and sticks to its policy of killing the formal economy in order to create a new one anchored on informal Small-to-Medium Enterprises (SMEs).

Statistics from labour unions paint a gloomy picture over the future of the informal job market with nearly 10 000 works said to have lost their jobs since jobs
December 2013 annual shutdown with a record 75 companies having closed shop.

The companies, according to the Zimbabwe Congress of Trade Unions (ZCTU), retrenched, citing the liquidity crunch and general economic meltdown as compelling reasons for restructuring.

The company closures were most felt in the clothing, metal, agriculture, engineering, furniture, paper and pulp, commerce and catering sectors.

ZCTU secretary-general Japhet Moyo said the most affected was the agriculture sector were 890 workers were laid off following the compulsory acquisition of eight farms in the period under review.

Despite these grim statistics in a country with unemployment hovering at around 80%, the Mugabe government is bent towards relaxing labour laws to make it easier to fire employees without following the current time-consuming procedures.

The decision seem to be driven by Zanu PF’s interest in luring more Chinese foreign direct investment.

The Chinese are renowned for poor employment conditions and no respect for employees.

Chinese trade with Zimbabwe has grown from a mere $310 million annually to the current $1,1 billion by December 2013.

These figures were released last week by Chinese Ambassador to Zimbabwe, Lin Lin.

The government used the 2014 National Budget statement to clearly show the new line of thinking towards labour when Finance minister Patrick Chinamasa said the government was planning to review labour laws with a view to making it easier to hire and fire employees as well as increase productivity.

Chinamasa said: “I am, therefore, calling upon my colleague, the minister responsible for labour, Honourable (Nicholas) Goche, to seriously consider amendments to the Labour Act that relates work to productivity. It is also necessary that we introduce in our labour laws flexibility in the hiring of workers, as well as alignment of wage adjustments to labour productivity.”

“The government argues that the new laws will be “flexible and linking remuneration to productivity, that way promoting interests of both the investor and employees”.

Ironically, the government is trying to move from the current Labour Relations Act that makes dismissals and retrenchments slow as the parties have to go through a number of hearings before implementing decisions.

The labour hearings often start at company level, but any party aggrieved with the hearing outcome allowed to appeal to labour courts for review or redress.

The law is clear that failure to follow laid down procedures in dismissing an employee results in the company paying damages in lieu of reinstatement.

Labour analysts say the law review has the potential to poison relations with unions, but currying favours with the Chinese who have a reputation of abusing employee rights.

Zimbabweans at different levels have debated the conduct of Chinese companies and their treatment of employees in different meetings and even in Parliament.
There has been massive accusations from employees at Chinese-owned companies especially construction sites about long working hours, poor working conditions, arbitrary dismissals, beatings at the workplace and low wages.

ZCTU deputy secretary-general Gideon Shoko said the review, as suggested by Chinamasa, was not only meant to benefit the Chinese, but all employers, especially senior government officials who are now large landowners.

“Relaxing the labour laws will benefit not only the Chinese, but all employers in the country including Zanu PF government ministers and senior civil servants who of late have become businesspeople and farmers who want cheap labour,” Shoko said.

He added: “The laws will suppress workers who are not allowed to go on strike without notification, hence benefiting employers.”

Economist and Labour and Economic Development Research Institute of Zimbabwe (LIDREZ) director Godfrey Kanyenze concurred with Shoko, saying the law review is retrogressive.

Kanyenze said: “This policy is retrogressive and will spur retrenchments rather than employment creation as it fails to balance the security interests of employees with those of employers as encapsulated in the International Labour Organisation (ILO) that calls for regulated flexibility.”
He added that it was a fallacy that flexible labour laws attract investment.

Thousands left jobless after company liquidations

DESPITE the country having stringent labour laws, thousands of employees have lost their jobs as companies retrench or entirely fold in this turbulent economy.

Over 700 companies were liquidated in 2013 alone, leaving thousands out of employment, many of whom who have since joined the ranks of swelling informal sector.

International Socialist Organisation (ISO) leader Munyaradzi Gwisai said the development was Zanu PF’s pursuit of neo-liberal policies that began in 2009 under the coalition government.

Gwisai said: “Government is becoming a willing servant of capital and it’s ridiculous to say labour laws need to be made flexible in a country that has 85% of workers earningbelow poverty datum line ($543/month) and where over 5 000 workers were retrenched in the past year.”

Researches done by ILO prove that labour flexibility does not increase productivity except pacifying employers.

Janine Berg and Sandrine Cazes in a paper titled The Doing Business Indicators: Measurement Issues and Political Implications, argue that it is myopic to link labour flexibility to productivity.

Berg and Cazes said: “The index is based on a myopic view of the labour market that if adhered to cannot guarantee improved economic performance or employment. It thus sends misleading policy messages that, if implemented, risk hurting workers, but also business and the economy in general.”

For now, Zanu PF’s policy seems to be a stillborn idea just being done for the sake of a few comrades wishing to milk workers, while at the same time bombarding the country with rhetoric of being a pro-poor political party.

The frightening reality is Zimbabweans will wake up in a country controlled by the informal sector and those in formal industry will just be legalised sweat-shops where the workers have no rights and can be hired and fired at the whim of the employer without compensation.