The country which over the past decade is most synonymous with "financial innovation" of the less than desirable kind, such as hyperinflation, complete currency and economic collapse and wholesale property confiscation, has just taken financial central-planning brilliance to the next level and following dictator Robert Mugabe's "reelection" has announced plans to open a new and "racially exclusive" stock exchange, allowing blacks alone to trade. And not trade just anything, but shares of recently nationalized foreign companies, most of which are South African-owned miners. Or rather were, because following the most recent nationalization round, Zimbabwe would take a 51% stake in all major foreign-owned companies valued at over $7 billion. No compensation will be paid.
Telegraph has more:
The plan to grab mining companies, most of which are South African-owned, follows President Robert Mugabe's landslide re-election last week.
Saviour Kasukawere, the 'indigenisation' minister, said on Tuesday that the government or black Zimbabweans would take 51 per cent of the shares in all major foreign-owned companies, valued at about £4.8 billion. No compensation will be paid.
The regime wants to control mining companies and in particular Zimplats, a major platinum producer which is largely owned by South Africa's Impala Platinum Holdings.
Zimbabwe was kind enough to give foreign companies a choice: hand over 51%, or lose everything.
Mr Kasukawere said that mining companies which do not "cede" 51 per cent of their shares to black Zimbabweans or the state would risk losing their operating licenses. He said the value of the natural resources or underground metals extracted by the companies were sufficient to pay for majority shareholdings. "When it comes to natural resources, Zimbabwe will not pay for her resources," said Mr Kasukuwere in an interview with Bloomberg, a news agency.
And while banana republic nationalizing mines is nothing new and is a big reason for the horrendous performance of the mining complex over the past several years, the fact that Zimbabwe has some of the best-named propaganda actors is worth the price of admission alone.
Psychology Maziwisa, spokesman for the ruling Zanu-PF party, confirmed that Mr Kasukawere's remarks were official policy. "All of this is correct. Its what we told voters we will do," he said.
Obviously, people are stunned by the absolute idiocy developing in Zimbabwe:
John Robertson, an independent economist in Harare, said: "There is no logic in that plan. He is in danger of introducing economic apartheid which is absurd."
Mr Robertson added: "I think this is only politicking and there is no substance to this."
Just wait. Because if anyone is hoping that Zimbabwe's preexisting international agreements...
South Africa has a bilateral trade and protection agreement with Zimbabwe. If the regime presses ahead and seizes a controlling stake in South African mining companies, they could use these agreements to secure compensation or the return of assets via international courts.
Whether Mr Mugabe's regime would respect any such rulings is another question.
Mr Mugabe seized almost all of Zimbabwe's white-owned farms, often in defiance of court orders, and without compensation.
... will do much to hinder the actions of an absolutely insane populist lunatic dictator, we urge them to exhale.
Finally, and speaking of populism, the good thing about the US is that there is little risk of it following in Zimbabwe's footsteps, at least in this regard: after all HFT algos are neither black nor white, so attempting to impose racist qualification on a bunch of vacuum tubes will fail miserably if and when Mugabe's plan crosses the Atlantic.
Read more ›