Editors Comment

Reports that villagers in Marange area forcibly entered the diamond fields last night and looted equipment belonging to diamond firms will undermine efforts to revive the economy.

State media reported that locals who feared losing their jobs after government ordered the diamond firms to wind up their operations in 90 days are responsible for the looting. Analysts have questioned why police did not do anything to protect this unlawful loss of property.

One  would be inclined to sympathize with the looters after government removed them from the fields in ‘operation hakudzokwe’ and also went on to relocate them to make way for the diamond firms who in turn have done nothing to develop the communities there.

The community share ownership schemes have not received anything substantial while the environment has been damaged by these diamond firms. The people from Marange have deep lying grievances with both government and the diamond firms after their livelihoods were disrupted and now their diamonds have been exhausted without any tangible benefit to them.

However these disturbances come at a time when the Zimbabwean government is trying to convince investors to come into the country as part of its efforts to revive the comatose economy. Investors will be thinking that their investments are not safe where people can take matters into their own hands and their investments can vanish in broad day light.

Chinese investors would have been most affected by this act of looting as they have interests in diamond mining in Chiadzwa. Jinan and Anjin diamond firms have Chinese investors and this latest development can have negative ramifications on the economic relations between Zimbabwe and China.

This comes at a time when Zimbabwe has been trying to negotiate what state media termed as ‘mega deals’ with Chinese investors and government. Zimbabwe is looking for capital in infrastructure development and other areas to kick start the economy

To follow up on these deals the Chinese President Xi Jin Ping visited the country late last year and the state media has reported that some of the money negotiated had began trickling in. The Chinese government will now have doubts about the country as a safe investment destination

It is being said that these actions violate the 1998 bilateral trade agreement between China and Zimbabwe. The country has gained a reputation for not respecting trade agreements with other countries.

The government has also been courting Nigerian billionaire Aliko Dangote to invest in the country but the Nigerian mogul has gone cold casting doubt on whether he will invest in the country. He may be developing cold feet because of the uncertain investment environment.

This decision by government to unilaterally stop operations at the diamond fields will worsen the already bad investment environment in the country. Government will now have to fend off an image of not sufficiently respecting property rights or ensuring that property rights are protected.

The invasion of the diamond fields invoked memories of the chaotic land reform where thousands of ruling party supporters were allowed to violently grab land including equipment on white owned farms while the police stood by and watched. It earned the country a bad reputation of being a bad investment destination and up to now the country is struggling to alter that image.

More capital flight must be expected as other investors will not be sure if their own businesses will not be targeted in similar fashion. Government has already defended itself saying the mining licenses of these firms had already expired but nothing will justify the latest lawlessness. The fact that one no longer has a license does not open up their business for looting by locals without government protection.