By MICHAEL WINES
JOHANNESBURG, June 26 — 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.

Empowerment programs that transfer corporate stakes to black shareholders are not unusual. South Africa’s government sponsors a highly successful, but much criticized, program that has transferred large blocks of corporate stock to workers and managers, and has helped make multimillionaires of a handful of well-connected businessmen.

Mr. Mugabe’s critics, however, say the proposal is a scheme to loot the remainder of Zimbabwe’s economy for the benefit of political insiders and backers of the president. To them, the legislation evokes the specter of Mr. Mugabe’s seizure of thousands of white-owned farms early this decade, mostly without compensation, in what was then called a redistribution of land to poor blacks. Instead, many of the best farms were awarded to leading figures in Mr. Mugabe’s government and his ruling party, the Zimbabwe African National Union-Patriotic Front.

Rather than confiscating stakes in companies, however, the legislation envisions a more gradual, potentially compensated transfer of ownership.

At the same time, the government began an effort to rein in Zimbabwe’s hyperinflation, officially about 4,500 percent, but described by private economists as approaching 20,000 percent. A cabinet-level task force on price controls ordered factories and sellers to cut the prices of certain basic goods and services by as much as 50 percent — to levels that existed roughly one week ago.

Mr. Mugabe’s minister of industry and international trade, Obert Mpofu, said that increased prices were unjustified and that they were “a political ploy engineered by our detractors to effect an illegal regime change against the ruling party.â€

Shopkeepers throughout the country ignored the decree, according to several Zimbabweans interviewed by telephone on Tuesday. “No one is even thinking about freezing prices,†said one member of the ruling party, on condition of anonymity because of a fear of retribution.

That person and others interviewed Tuesday suggested that both the price decree and the ownership legislation reflected an increasingly frantic effort by Zimbabwe’s rulers to contain the damage from an economy that has moved in recent weeks from steep decline to outright free fall.

Inflation is now so steep that Zimbabwe’s currency is virtually worthless. The plummeting Zimbabwe dollar, now trading on the black market at about 130,000 to one United States dollar, collapsed last week to as low as 400,000 to an American dollar before recovering. The drop was almost certainly the result of Zimbabwe’s reserve bank flooding the black market with freshly printed bills, seeking to buy scarce foreign currency to pay its own debts.

Prices change daily, if not hourly; one news report last week noted that golfers at a Harare country club were paying for their 19th-hole drinks before teeing off after discovering that prices were rising while they were on the course.

The nation’s industrial production, estimated to be running at only 30 percent of capacity, is grinding to a halt in many places. “The rapid rise in prices is a killer for all concerned,†said Iden Wetherell, an editor at the weekly Zimbabwe Independent newspaper in Harare. “What you’re seeing now is people not bothering to go to work. It’s not worth it when their incomes are consumed entirely by transport costs. Things are deteriorating exponentially here.â€

Mr. Mugabe’s critics and a Harare economist said Tuesday that the “indigenization†legislation would almost certainly make Zimbabwe’s economic havoc even more severe by driving away the few foreigners still willing to invest in the country. The flight of foreign capital has been a crucial element in Zimbabwe’s economic decline, and until the draft legislation was published, the government had been courting Chinese investors and other outsiders, albeit with little success.

“The investment environment here is very fragile, and this is the kind of stuff that, even if it were warming up, would kill it,†said the economist, who declined to be named for fear of retaliation by the government. “Obviously, it’s going to scare even more people away.â€

Foreign firms with stakes in Zimbabwean businesses reacted cautiously to the proposal. “This is still a draft piece of legislation, which means it is open for general comment,†said Ross Linstrom, a spokesman for Standard Bank Group of South Africa, which has a subsidiary in Zimbabwe. Implats, a South African mining giant with a large platinum mine in Zimbabwe, said through a spokesman that it had already ceded part of its Zimbabwe reserves to the government and that it believed that it was already in compliance with the law.

The government has said that the law will apply to all companies, including the foreign banks and mining firms that power much of what is left of the economy. However, legislation that would have transferred a 51 percent stake in mining firms has lain dormant in Parliament for months, after mining firms protested that it could lead to chaos and steep drops in production. More recently, the government has indicated that it might nationalize some sectors of the industry, like coal and uranium mining, but that it would impose less stringent rules on some other sectors.

Some critics noted that one effect of the legislation would be to make a huge pool of corporate stock available for distribution to lucky Zimbabweans — factory workers and black managers, perhaps, but also those with political influence. Some of Mr. Mugabe’s closest allies have become fabulously rich, even by Western standards, during his 27 years in office, those critics say.

Moreover, Mr. Mugabe has frequently doled out patronage to ensure that his close allies remain close. Earlier this month, Mr. Mugabe handed out more than 1,000 Chinese tractors and some 30 harvesters to members of the ZANU-PF ruling party’s central committee, high-ranking officers in the army and air force, provincial and national officials in the Central Intelligence Organization, and ministers and deputy ministers in the government, among others.

Should the proposal become law, one member of the ruling party predicted, corporate stakes would follow suit. “The situation is desperate here,†that person said. “And so we are taking desperate measures.â€

What a mess that place is.

Looks like the black african version of "Reparations" to me. You know, "40 acres and a mule."

We are a full time booking agency specializing in Africa. we have completed safaris in Zimbabwe already this season and have an elephant, lion, plainsgame safari going on right now in Chewore.

I thought you might be interested in seeing the response from Barry Duckworth's Mokore Safaris after we asked about the recent State Dept. warning.
Farren Global Adventures.

I received the State Warning report about two days ago from a friend in the States and my heart sank!!! These things always sound soooooo terrible, I actually had an enquiry from a client asking "what the deal was with our civil war???" Zimbabwe is still in the same state it has been in for the last 6 years, our prices and inflation an uncontrollable and the highest in the world, but business is still good and the safari operators are getting by fine. Mel and I drove down from Harare two days ago (which we do on a regular basis) with the babies on our own and went through a number of road blocks. These road blocks have been set up because of the illegal diamond trade going on in Zimbabwe, all the policemen were very pleasant and just doing their jobs, there was certainly no trace of violence. These road blocks have been around for about 6 months, they do sometimes do thorough searches, but I have not heard of any violent action been taken against civilians. For those of you who know the Duckworth boys, you know there is no ways they would let their ladies and babies travel alone if they were concerned about safety.

I spent a month in Harare before Rachel was born, Mel and Gary live there 50% of the time and we have a number of friends and family who live there, no-one has ever even seen one of these so-called riots. This is not to say they haven't happened, but there have been very few of them and they seem to be very localized. We are very much into our season and have had a number of clients who have said they would be happy to get in touch with people coming out here who feel nervous, if you feel this way please let us know and we can give you some contact names and email addresses.

The bottom line is, most of you have known Barrie and Bertie for many years and know that they would never jeopardize a client's safety for the price of a safari. If we felt Zimbabwe was unsafe we would let you know. We understand and appreciate your concerns as you all have families and we would feel the same way about a place we had never been to, but can assure you Zimbabwe is quite safe and the hunting areas more so than anywhere.

Please don't hesitate to contact us for further info. Barrie and Bertie are down in Chewore at the moment, Barrie is being interviewed by Craig Boddington on the pro's of hunting old "dagga boys" as opposed to wide, younger buffalo with softer bosses etc. so am looking forward to how that went. They are off to Mozambique for a week to fly helicopters round the area with my Dad just surveying which should be pretty good fun as well. Mozambique is coming along wonderfully, it gets more and more gorgeous each time you visit and the game just seems to increase on a weekly basis! They will be back month end, Barrie is celebrating his 60th on the 25th of May as well so all is well with the growing Duckworth Clan.

Looking forward to seeing you all later on in the year or in Reno in 2008,
Take care and keep in touch,
Shayle.

I have just come back from Zim after 3 weeks of filming for a new promo dvd. I travelled from Byo to Hwange and Binga also going through many road blocks with no problems at all.
I spoke to a friend of mine, Garrick (Cormack) who was with Craig Boddington (Filming a new DVD) at the time and they too had no problems with police etc etc.
As has been said before, Zim is still a safe place to travel to and I will be back in Bulawayo this August for the rest of the hunting season...

quote:

JOHANNESBURG, June 26 — 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.

There is NO WAY any public company will or can comply with this directive. It essentially dilutes the interests of current shareholders without any kind of due process, which I am certain is a violation of many countries securities laws.

The few public multinational companies remaining in Zim were already hanging by a thread. This will force any company with shareholders in countries other than Zim to pack their bags and leave.

This will mean greater unemployment (although once you're at 80%, what's another 10%), zero foreign funds (other than from countries like China, who have no real sanctions on foreign corrupt practices), and will increase their already record-setting rate of inflation.

I fully appreciate the fact that those who have recently returned from Zim experienced virtually no problems. Bob and his cronies are smart enough not to kill about the only source of foreign funds comning into the country or risking more international condemnation by subjecting a visiting hunter to some ugly incident. But that can change - desperate people usually do some pretty desperate things.

And the question on my mind, is what's next? If Zim can essentially nationalize the mining industry and can transfer first farm ownership and now corporate ownership into black African hands, how long is it going to be before someone starts eyeing the safari industry?

Well, it's a good way to guarantee than any remaining business of any complexity or sophistication will quickly go belly up.

You can lead a horse to water, but you can't make him think.

Yes indeed.

He also ordered price cuts on common commodities. Expect further shortages soon. Africa is doomed until all of its Patrice Lumumba alumni die off.