Japan refuses to bail out Zim

via Japan refuses to bail out Zim – The Zimbabwe Independent September 18, 2015

PRESIDENT Robert Mugabe, who will travel to Japan next month begging bowl in hand seeking a financial rescue package and investment in a bid to prevent a looming economic implosion, will once again come back empty-handed as Japanese officials have exclusively revealed to the Zimbabwe Independent they will not use taxpayers’ money to bail out his broke government.

Owen Gagare/Fidelity Mhlanga

Informed officials say Mugabe’s government has been looking for a rescue package to resuscitate the declining economy hamstrung by a severe liquidity crunch which has led to massive company closures, job losses and an unemployment crisis.

Officials also say Mugabe will visit Japan after attending the United Nations General Assembly in New York this month. During the UN meeting, he has also reportedly lined up a number of bilateral meetings with his purported “all-weather friends” aimed at securing investment and funding.

Following an exclusive Independent report that Mugabe will be going to Japan next month, Japanese Prime Minister Shinzo Abe sent his special envoy Kuzuyuke Nakane to officially invite him for a state visit in October.

The Japanese envoy also extended an invitation to Mugabe to take part in the Japan-Africa Roundtable on Development Cooperation, which will be held on the sidelines of the UN General Assembly on September 26.

Mugabe asked the envoy to invite Japanese companies to invest in Zimbabwe during bilateral discussions, setting the tone for further discussions with Abe next month.

Mugabe and Abe will also discuss issues to do with the UN.

Japan’s ambassador to Zimbabwe Yoshi Hiraishi confirmed the visit but said a date had not been set yet.

He, however, said Japan would not give Zimbabwe any money. Mugabe visited Japan in March but came back empty-handed.

“There will be no bail out for Zimbabwe,” he said. “Our aim is not just to give money or anything. We have to be pretty sure that our money which may be paid in the form of a grant aid or technical assistance would be used effectively or efficiently. We are very particular about that. We will be dealing with taxpayers’ money and we are very strict about that.”

On investment, Hiraishi said the Japanese government did not have a say on where private sector companies should invest as they made their own independent decisions.

He, however, said Japanese companies were very cautious by nature, and would not plunge into environments where policy issues and regulations are unpredictable and not clear. He said he hoped Zimbabwe would take action to deal with problems hindering investment, including high country political risk and policy hindrances like indigenisation.

“I hope that the private talks between the Prime Minister of Japan and President Mugabe will have some very positive outcome which can help revive the Zimbabwean economy and uplift the people’s standards living,” he said.

“It is also our hope and we have been requesting the Zimbabwean government to have more clarity in their legal frameworks and the indigenisation policy. In our case, it is the market that determines conditions of investment. It is also not the Japanese government which decides which companies should invest in Zimbabwe. That’s not our job.

“If the environment is attractive, then Japanese companies will come to invest in Zimbabwe. Not just Japanese companies, but also companies from elsewhere. Japanese companies are more cautious than companies from other countries. They look at country risk profile and other such issues; they have to be sure whether their investments would be safe and they would get good returns on them.”

Hiraishi added that Zimbabwe must create a good investment climate to lure investors.

“If there are restrictions then Japanese companies will find it difficult to come to invest in Zimbabwe. It is our hope that government will get rid of any restrictions to facilitate investment,” he said.

“We do respect that natural resources belong to Zimbabweans, but at the same time putting lots of pressure through policy and regulations on foreign companies which want to bring investment in the country does not help.”
Hiraishi said Japanese companies were strong in manufacturing and mining, but were deterred by the perception that Zimbabwe is a hostile investment environment.

“For the time being I think these companies are interested in buying and selling rather than investing or building up factories. It will take some time before Japanese companies can do that,” he said.

“The challenge is that there is need for sound economic policies and an attractive environment in Zimbabwe before investors can come to the country.”

Since his controversial re-election in 2013, Mugabe has engaged Brics countries (Brazil, Russia, India, China and South Africa), which form an emerging powerful bloc of developing nations, to beg for funds to resuscitate the economy.

Mugabe was in Beijing in August last year but came back almost empty-handed after getting the usual US$26 million given to any visiting leader to use as they see fit.

Mugabe only secured long-term infrastructure deals with China, which gave Vice-President Emmerson Mnangagwa a sobering reality check when he visited Beijing in July. Beijing wants change of leadership and policy reforms in Harare before releasing big money.