FORMER United States Secretary of State and Chairman of the Joint Chiefs of Staff retired General Colin Powell once described capital as a coward, indicating attracting investment is not easy unless there is an enabling environment.
THE ZIMBABWE INDEPENDENT EDITORIAL
“Attracting money isn’t easy. Capital is a coward. It flees from corruption and bad policies, conflict and unpredictability. It shuns ignorance, disease and illiteracy,” Powell said.
“Capital goes where it is welcomed and where investors can be confident of a return on the resources they have put at risk. It goes to countries where women can work, children can read, and entrepreneurs can dream.”
Powell further indicated countries that have opened their economies have done better than those that remain closed. Citing a World Bank study over a decade ago, he said that over the course of the 1990s 24 developing countries that increased global trade and investment the most also increased income per person much more than those that did not. In those countries, he continued, the number of people living on less than US$1 per day dropped by 120 million between 1993 and 1998.
“But good policies alone are not enough. People must be able to seize the opportunities,” he added, saying governments, civil society and the private sector must work in partnership to mobilise development resources to unleash human productivity, foster sustainable growth and reduce poverty.
Well over a decade later, his message delivered ahead of the 2002 World Summit on Sustainable Development just across Zimbabwe’s southern border in Johannesburg, South Africa, seems to be even more relevant to this country.
In this edition, we report on Page 4 that a total of 80 delegations visited Zimbabwe last year to explore investment opportunities but their missions did not yield the desired results.
Delegations from many countries and trading blocs like the European Union — including Britain, Germany and France — the United States, Scandinavian countries, China and Russia, among others, visited Zimbabwe, but they chose not to invest here.
Investors did not come back to the country as they felt it has a hostile business climate and high risk. Most of the problems discouraging investment in Zimbabwe include political uncertainty, policy unpredictability and bureaucratic obstacles, as well as trampling on property rights, the rule of law and human rights. Bad leadership, incompetence and corruption do not help the situation. Africa’s richest man Aliko Dangote also visited Zimbabwe to explore opportunities, but complained about the country’s restrictive visa regime.
Zimbabwe has repeatedly ranked poorly in each and every Doing Business Survey by the World Bank and the World Economic Forum.
Compared to its neighbours, Zimbabwe got a paltry US$545 million in FDI in 2014 while Mozambique received US$4,9 billion, nearly nine times more, pacesetter South Africa US$5,7 billion and Zambia US$2,4 billion. This shows how Zimbabwe is losing out to its neighbours due to its unfriendly business environment.