Jim Armitage: Mugabe regime still failing the test, so why are we handing it a prize?
Zimbabwe is arguably run largely for its leaders’ benefit
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Saturday 16 February 2013
Global Outlook Rewards for the punished are only meant to be for good behaviour. So why are we about to give a glittering prize to the unpleasant government dominated by Robert Mugabe? On Monday, in Brussels, the European Union's Foreign Affairs Council will lift certain targeted sanctions on the country. William Hague will sign up to the moves, which are being championed by the high representative, Labour's Baroness Ashton.
It's not clear yet exactly which barriers will be removed, but I'm reliably informed they will include the lifting of travel restrictions on certain members of the Mugabe regime, plus the unfreezing of some of their assets.
Many of Mr Mugabe's top officials have become spectacularly rich from his decades in power. Perhaps we should applaud as his newly liberated big guns come to Sloane Street to splash out in Rolex and Louis Vuitton – our economy needs all the help it can get. But I'm not entirely sure that boosting London's luxury goods industry is what the EU Foreign Affairs Council should be all about.
Zimbabwe remains a deeply troubled state, arguably run largely for the benefit of its leaders. Its diamond industry, as I wrote here some weeks ago, is deeply flawed and open to corruption. Large amounts of money from its diamond mines flow into the coffers of Zanu-PF, Human Rights Watch suggests, while its highly partisan police force continues to harass and arrest opposition activists.
So why are we about to give Mr Mugabe a big pat on the back?
Mr Hague, Lady Ashton and Co argue the sanctions should be lifted to recognise the fact that the government has said it will hold a referendum in March on a draft constitution. General elections should follow later in the year.
But, setting aside all the other allegations of ongoing corruption and human rights abuses, why would we want to be rewarding the regime for something it hasn't even done yet?
The Zimbabwean sanctions should remain in force until free and fair elections have been held – and note that expression: "free and fair".
Luxury in Piccadilly, big risks in Zimbabwe
At a cost of £500 to £900 per ticket, the dozens of businessmen attending the ZimInvest London 2012 Forum last November will have been hoping for more than just a few egg-and-cress sandwiches. They will not have been disappointed. The five-star Le Meridien Piccadilly, not known for skimping on the catering, laid it on in luxurious style.
More importantly, the suits who assembled – fund managers and others looking to invest in Zimbabwe –met senior honchos from the country in what the event's marketing blurb described as "an excellent high-level networking platform".
The lifting of sanctions on Monday will be used by said honchos as a major recruiting tool in future conversations, we can have no doubt.
Attendees included the London Stock Exchange's Richard Webster-Smith, Old Mutual's Patrick Bowes and Standard Bank's London-based Matthew Pearson, all talking about the everyday realities of doing business in Zimbabwe.
Not present were the 11 British and Dutch folk who bought farmland in the country in the 1980s, when Mr Mugabe was encouraging inward investment.
They were evicted in 2002 and, despite winning a World Bank arbitration hearing awarding them £22m compensation, are still waiting for their money. Only last week, the Zimbabwe government confiscated thousands of hectares of mining land from Zimplats while Standard Chartered, Barclays and other firms this week were said to face being forced to sell majority stakes of their Zimbabwean businesses to "indigenous Zimbabweans".
Hopefully the well-fed ZimInvest guests were warned: investing in Mr Mugabe's Zimbabwe is still a risky business.
Time for all to sign up to fight against corruption
Mehmet Dalman, the Labour-supporting chief executive of that controversial mining group ENRC, was at the Conservatives' Black and White Ball in London the other day. David Cameron was, of course, the keynote speaker (somewhat underwhelming, I'm afraid).
I'm sure Mr Dalman will have taken the opportunity to congratulate the Prime Minister on his enthusiasm for the Extractive Industries Transparency Initiative (EITI), which aims to reduce corruption in mineral-rich Third-World countries such as the Congo, where ENRC is a major player.
Glencore, Xstrata, Barrick Gold and others have all become, or are in the process of becoming, signatories, and Mr Cameron was trumpeting the cause at Davos. Yet Mr Dalman's ENRC, famed for its deals in the Congo with the infamous Israeli diamond tycoon Dan Gertler, is seen in the industry as being something of a laggard on the whole process.
Under EITI, money paid by companies for mining rights has to be matched by money received by the states' treasuries.
Both amounts have to be published – the idea being to make it harder for cash to disappear into certain back pockets en route. That can make it a tad more difficult doing business in certain parts of the world.
The PM wants to get all of G8 to sign up to EITI while Britain has presidency of the group this year. (Silvio Berlusconi, if he gets himself elected, is hardly likely to be an enthusiast. This week he declared bribery was fine if it meant winning lucrative contracts. )
It is to Mr Cameron's credit that his vision for the developing world is that Western firms behave honourably and transparently. Somewhat embarrassingly, though, we Brits aren't signed up to EITI yet.
Hopefully we – and that means ENRC – will have signed by the time the great and the good meet up at the Lough Erne summit in June.
Something rotten in UBS Apple strategy
An interesting snippet emerged yesterday about Apple – a company whose shares I can't help thinking (to the derision of my colleagues) may have fallen too far, too fast.
The Swiss banking giant UBS sold its entire holding of 10.7 million shares during the last three months of 2012. Very wise, as it turned out. But look what its research team were telling clients in December: Apple was rated with a Buy recommendation and a target price – the price up to which you should keep buying the shares – of $700.
UBS was, meanwhile, busily selling its own stock at as little as $525. Today, they're below $450.
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