Opinion / Columnist

Why reward Mugabe?

by Jim Armitage
19 Feb 2013 at 06:23hrs | 3491 Views
BRUSSELS - 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?

Today, 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 is 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 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 l am 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 l wrote 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 Mugabe a big pat on the back?

Hague, Ashton and company 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".

At a cost of $800 to $1 400 per ticket, the dozens of businesspersons 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 today 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 Mugabe was encouraging inward investment.

They were evicted in 2002 and, despite winning a World Bank arbitration hearing awarding them $35 million 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 Mugabe's Zimbabwe is still risky business.

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, l am afraid).

I am sure 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 Cameron was trumpeting the cause at Davos.

Yet 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 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 √¢‚Ǩ‚Äú and that means ENRC - will have signed by the time the great and the good meet up at the Lough Erne summit in June. 


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