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SA firms 'exploiting' Zim
23/10/2007 22:03 - (SA)
Johannesburg - South African businesses cashing in on the economic crisis in Zimbabwe need to stop putting profits before ethics and play a greater role in resolving the country's problems, a leading Zimbabwean academic said on Tuesday.
Brian Raftopolous, director of research and advocacy for Solidarity Peace Trust, a regional human rights body, questioned the role South Africa, a regional powerhouse, has played in the turmoil in Zimbabwe.
He said companies operating in Zimbabwe had a responsibility to use their influence to push for human rights and democracy.
"South African companies are cashing in on the crisis," he said in a report released on Tuesday. "They have not been idle in finding opportunities.
"If you are making that kind of money in that context what is your responsibility in resolving the crisis?"
'Catastrophic' collapse
The collapse of Zimbabwe's economy has been "catastrophic," the report said. The country has the world's worst official inflation at nearly 8 000%, though independent estimates put it closer to 25 000%.
The International Monetary Fund forecasts it will reach 100 000% by year's end.
In June, the government ordered prices slashed by half to tame inflation. Instead, it worsened already acute shortages of food and basic goods.
As the economic and political crisis has deepened, new opportunities have opened up for South African companies to extend their influence, the report said.
Several of South Africa's biggest companies have investments, subsidiaries and interests in Zimbabwe, making up 60% of companies listed on the Zimbabwe Stock Exchange.
R7.3bn worth of SA exports in Zim
According to the report, Zimbabwe has remained the largest African market for South African goods, with R7.3bn worth of exports.
Several companies such as Implats, Old Mutual and SABMiller have invested or expanded their investments in Zimbabwe since the crisis.
"The South African corporate sector has exploited Zimbabwe's collapsing economy to bolster its bottom lines," the report said.
The report explores the impact these strong economic ties have on South Africa's foreign policy toward its neighbour. "The role of South Africa, as both a help and hindrance, has been continuously debated," it said.
South African President Thabo Mbeki has been criticised for advocating what he calls quiet diplomacy over confronting Mugabe, who is accused of overseeing his country's economic and political collapse.
Mbeki led talks between the ruling Zanu-PF party and the opposition, leading to an agreement to ensure that elections scheduled next year are free and fair.
Raftopolous said resolving the political crisis was vital to Zimbabwe's economic recovery and urged South African companies to use their leverage to ensure the talks are a success.
"They need to give support to the mediation and speak out against human rights abuses. It is their employees who are the victims," he said.
'Claims untrue'
Jerry Vilakazi, chief executive of Business Unity South Africa, dismissed allegations that South African businesses were "cashing in on the crisis".
"That is not true. The situation in Zimbabwe is not normal for doing business. A number of business have lost money," he said.
Vilakazi said his organisation, which represents a number of large private sector firms, called for South African businesses to stay in Zimbabwe.
"Business has to play a constructive role to ensure the difficulties the people of Zimbabwe are going through are minimised through constant supply of food ... (and) jobs," he said.
Meanwhile, Zimbabwe's opposition warned on Tuesday that the crisis has reached tipping point, as some suburbs in the capital, Harare, were reported to have gone 10 days without power.
"This madness cannot continue," said Nelson Chamisa, spokesperson for the Movement for Democratic Change.
Supermarkets have been forced to throw out perishables after a huge fault plunged a swathe of suburbs in the north of the capital into darkness last week.
Engineers warn supplies will not be fully restored until the weekend.
Scheduled power cuts are a common occurrence in Zimbabwe, where the theft of cables and oil from transformer units had left engineers - already facing chronic shortages of hard currency for spare parts, equipment and gasoline - battling with mounting breakdowns.
- AP
- AP
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