Does FDI have a colour, totem?


Tichaona Zindoga Senior Political Writer
ZIMBABWE has in the past few weeks managed to hold high-level engagements with China and Russia, resulting in massive deals and agreements, headlined by this week’s US$3 billion Russian investment in platinum.

Ironically, these developments have not been universally celebrated in Zimbabwe, with critics doing everything from deriding Zimbabwe for bringing only a “bag of signatures” from China to accusing the Government (and Zanu-PF) of selling out to “new imperialists”.

One commentator even seemed to perceive China and Russia as having done a “gang-up” to plunder (or rape) poor Zimbabwe.

It has to be stated here that people have the right to question and to hold to account their Government, especially when it concerns the country’s resources and future.

However, the criticism that has been levelled against authorities is not only misplaced and ironic on the main, but also cynical to the point frivolity.
Some background

A good number of political and economic actors have been proffering foreign direct investment as the panacea to the country’s economic woes.

The opposition MDC-T has been especially dogged in this belief with the two documents or economic plans it offered in the run-up to last year’s elections, namely, “Jobs, Upliftment, Investment Environment” (JUICE) and “Agenda for Real Transformation in Zimbabwe” (ART), underlining the importance of FDI.

Many people, understandably, may have no knowledge of these documents from a party that lost elections last year.

But JUICE says it “advocates for (sic) a broad-based economic (BBE) upliftment of citizens by expanding people’s choices in attaining sustainable livelihoods not through asset stripping and looting. Zimbabwe desperately needs new domestic and foreign investment in order to increase capital formation. This can be achieved by policies that increase investor confidence.”

One of the stated objectives of JUICE is, “establishing a friendly environment for both domestic and foreign direct investment (FDI) to rapidly increase the productive sector’s capacity utilisation to a level that ensures job creation through genuine capital investment”.

JUICE sought to attract FDI “that is at least 30 percent of GDP”.

In ART, which was a revision of JUICE, MDC-T sought to encourage and facilitate both local and foreign direct investment.

It also sought: “To ensure that infrastructure is highly developed to create an enabling environment for business. Therefore, we need massive capital injection to kick-start our stalled economy and FDI, as well as resuscitating lines of credit.”

Now, what the opposition failed to sell, the present Government is achieving.

The current deals all speak to the FDI concept as well as capital injection and job creation.

One does not need to be an economist or mathematician to quantify that the monies envisaged to come from the current and, from the looks of it, future deals, well trumps the 30 percent of GDP that the MDC sought for the economy.

On the other hand, the Zim-Asset blueprint, which came from the winning manifesto of Zanu-PF, also notes the importance of FDI.

In its “Overall Assumptions of the Zim-Asset Plan”, the blueprint banks on “increased foreign direct investment”, improved liquidity and access to credit by key sectors of the economy such as agriculture; improved revenue collection from key sectors of the economy such as mining; increased investment in infrastructure such as energy and power development, roads, rail, aviation, telecommunications, water and sanitation; among others, as anchors of the growth of the economy during the period 2013-2018.

Zim-Asset is recording success, which it shouldn’t honestly be denied unless such criticism is certified dishonesty and fickleness.

Or is it being seriously suggested that FDI can only come from western countries?

It is not hard to realise that all the anger and criticism directed at the Sino and Russo deals are more to do with East-West bipolar politics.

Professor Arthur Mutambara was spot on when he noted that some people hated the Chinese on behalf of America.

By the way, America and China are competing for traction or influence in Africa.

America is losing the contest.

America has its sympathisers, including in Zimbabwe.

It is such a pity when people become so narrow-minded on a subject that should be so broad or open-ended.

Or, really, FDI has a colour; a totem?

It would seem so, to some.

And these include the whole London School of Economics and Political Science.

In a January 2014 paper on the history of FDI and European influence, the paper explains: “The collapse of communism more than 20 years ago unleashed a historically unprecedented process of economic restructuring and political transformation in the former communist countries.

“This process of transition involved a number of radical changes both in the political (democratisation, institution-building) and the economic sphere (marketisation, liberalisation, restructuring).

“In this process, the inflow of foreign direct investments has obtained a heightened importance, not only in its role of removing capital shortages, containing current account imbalances and strengthening job creation, technology transfers and economic development (Fry et al, 1995; Markusen and Venables, 1999), but also for the effectiveness of, and commitment to, transition itself (Grabbe, 2006).”

Now, when FDI is defined and understood in such a narrow and shallow context, it becomes problematic.

In fact, it is the kind of FDI that Zimbabwe does not need with all the woes that come with the concepts of “democratisation”, “institution-building”, “marketisation”, “liberalisation” and “restructuring”.

These concepts underpin what is known as capitalism, which is not only a predatory system that cannibalises and impoverishes but generally, too, a failed and failing model.

Capitalism has been responsible for global economic downturns.

Third World countries, Zimbabwe included, had enough trouble with liberalisation and economic structural adjustments and such experiments in European countries such as Greece and Spain, in recent times, have only yielded misery and social upheavals.

Such politics and policies are not what Zimbabwe wants at the moment, if ever.

Besides, China has already shown that a country can industrialise and develop without the ungainly encumbrance of Western democracy.

The Russians and Chinese are not in the habit of attaching suspicious strings to their FDI.

Zimbabwe should be applauded for convincing the emerging powerhouses to invest in the country, to speak Zim- Asset, which is not being honoured at home by some naysayers.

China and Russia are key members of the BRICS bloc, which is a rising phenomenon -a feared one at that in the West.

When the two countries engage little Zimbabwe, it is something remarkable.

After all, are Britain and America not going cap in hand to beg China, the former’s David Cameron having gone to China twice in as many years while America’s Obama is reportedly beating the same path soon?

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