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Publication Details

Reference
Hattingh, Shawn  (2007) South Africa in Zimbabwe: The Vultures have descended. Centre for Civil Society : -.

Summary
Introduction
Periodically over the last seven years, the South African government has claimed to be on the verge of brokering a deal between ZANU-PF and the MDC that would secure Zimbabwe’s political future. During these fleeting moments, the hopes of millions of Zimbabweans have been raised; only to be repeatedly smashed. This is because at every critical point over the last seven years, when change seemed imminent in Zimbabwe, South Africa has backed and protected ZANU-PF. In every election in Zimbabwe since 2000, South Africa has been ready to proclaim ZANU-PF as the victor. This has occurred regardless of blatant vote rigging and violence directed at oppositional voices. Despite overwhelming evidence to the contrary, South Africa has also claimed that all of these elections have been free and fair. Through such support, the South African state has ensured that ZANU-PF has remained in power.

South Africa has regularly defended ZANU-PF on the international stage. When Zimbabwe was threatened with expulsion from the Commonwealth, in 2002, the South African government rallied to its side and attempted to use its diplomatic clout to prevent this. Although South Africa could not stop Zimbabwe’s suspension from the Commonwealth, the South African state was able to muster the Southern African Development Community (SADC) in support of Zimbabwe. Through South Africa’s leadership, the SADC countries drafted a strong statement condemning certain Commonwealth members – Britain, Australia and Canada – as being intolerant and rigid due to their treatment of Zimbabwe.1 Similarly, when the US and EU imposed selective sanctions on the Zimbabwean government, South Africa’s Department of Foreign Affairs stated that such actions were “unfortunate and regrettable”.2 Not to be outdone, the ANC Youth League also followed up on the Department of Foreign Affairs’ comments in 2004 by lambasting the EU and US for their racist treatment of the Zimbabwean government.3

The South African government also used its political power to block the UN Human Rights Commission from taking punitive steps against the Zimbabwean government.4 As recently as 13 August 2007, the South African government stated that Britain was to blame for the growing crisis in Zimbabwe. The South African state said that Britain was strangling Zimbabwe through economic sanctions, and was hell bent on stopping a negotiated settlement that might leave a post-Mugabe ZANU-PF in power.5

The question is: why has the South African state offered such unflinching support for ZANU-PF? The conventional answer, given in sections of the South African media and by some liberal commentators, is that the South African government backs ZANU-PF because of its pan-Africanist ideology.6 This belief that South Africa is pan-Africanist can be easily discredited. One only needs to look at how South Africa has behaved in the World Trade Organization (WTO) to see that it is no pan-Africanist. The South African state has continuously undermined other African countries’ resistance to the neo-liberal demands that are being made by rich countries in the WTO.7 The South African government may use pan-Africanist rhetoric when it suits them; but, essentially, this pan-Africanism is only rhetoric. In many cases, South Africa is far more closely aligned to the Northern powers than it is to other African countries. In fact, an argument could be made that South Africa acts as one of the promoters of the global imperial system. Evidence of this can be seen through the prominent role it has played on the IMF Board of Governors; the World Bank Board of Governors; and at the WTO meetings in Doha, Cancun and Hong Kong. Indeed, the global imperial system as it exists today is based on a form of ‘collective’ imperialism that is led by the USA, but also includes countries such as Canada, Germany, France, the United Kingdom, Spain, Japan, Australia, New Zealand8 and, I would argue, South Africa. The reason why imperialism on a global scale takes the form of a ‘collective’ is because even the strongest power that exists, the US, is not powerful enough to dominate the entire world as the lone imperialist – a point which is highlighted by the debacle of Iraq, when it has tried to act more or less on its own.9 Thus, the US needs allies, who themselves are imperialist powers at regional or continental levels to maintain the global imperial system. One of these regional or continental imperialist powers is South Africa.

Despite acting as a collective, globally, each of the powers involved has its specific region of the globe in which it operates as the prominent imperialist power to protect and further its own capitalist entity’s interests. For example, the US’ main strategic imperialist spheres are Latin America, the Middle East, parts of Africa and parts of Asia; while Britain’s imperialist ambitions are mainly restricted to some of its ex-colonies.10 Similarly, I will argue, South Africa’s imperialist sphere covers much of Africa, including Zimbabwe. As a result, where two or more imperial powers interests’ overlap or clash in a certain region or country, they will compete in that region or country, even though globally they will remain aligned. Hence, although not in conflict with the US or Britain globally, in certain areas in Africa, South Africa, Britain and the US’s interests do clash. As a result, there is some form of rivalry between South Africa and the US and Britain in those areas of Africa, such as Zimbabwe, where these powers have competing interests. This, however, does not preclude South Africa, Britain and the US from working together in other areas of Africa where they have common interests: it also does not deny the reality that the US is vastly more powerful than South Africa.

When Zimbabwe is approached from the view point that South Africa, Britain and the US have competing imperial interests in Zimbabwe (even though they are aligned globally) then, as will be demonstrated, the situation in Zimbabwe begins to make some sense. Thus, I will argue, South Africa backs ZANU-PF because it offers the best possibility of furthering the interests of sections of South African capital in Zimbabwe, even if it is not always in a straightforward manner. For this reason, and not some noble notion of pan-Africanism, the South African state offers as much protection as it can to ZANU-PF. Linked to this, the South African state shuns the MDC because it views the MDC as being aligned with the interests of British and American capital, and their states, in Zimbabwe, against certain sectors of South African capital. This, however, does not mean that the South African state is specifically aligned to President Mugabe. Rather, it is aligned to ZANU-PF as a whole, and in fact would probably prefer a post-Mugabe ZANU-PF to the present state of affairs. In the worse case scenario, the South African state would also accept a government of national unity, in which ZANU-PF retains power, but where the MDC gets a number of cabinet posts. Nonetheless, the South African state, under the leadership of the ANC, will not back the MDC gaining full power in Zimbabwe. In contrast, the US and Britain back the MDC because they believe it offers the best possibilities for the future interests of their capitalists in Zimbabwe.11 Attached to this, they are directly opposed to ZANU-PF because, in their view, it is no longer adequately aligned with, and fully in service of, their interests. This rivalry is perhaps best highlighted by the fact that the US government has spent large amounts of money through the Zimbabwe Democracy and Economic Recovery Act (ZDERA) in a bid to ensure that the MDC comes to power;12 while the ANC has repeatedly provided technical assistance to ZANU-PF around its electoral campaigns.13

In order to understand the above argument, it is necessary to first understand why the South African state should be considered as an imperial power in Zimbabwe. To this end, this article will examine the economic interests that South Africa has in Zimbabwe. This will include demonstrating that many South African companies have been involved in pillaging Zimbabwe’s economy. I will also examine how, over the last few years, the South African state has furthered and protected the interests of certain sections of South African capital in Zimbabwe, despite the widespread economic chaos and collapse that has occurred in the country. The South African state has done this through initiatives such as NEPAD, the SADC Free Trade Zone and bilateral arrangements. In fact, in this article I will show how sections of South African capital have benefited, and stand to benefit, from the economic crisis in Zimbabwe.

It is first, however, necessary to understand the nature and orientation of the South African state in order to understand why it is an imperialist power in Zimbabwe, and sub-Saharan Africa more generally. This includes understanding how and why there is actually a remarkable historical continuation of South Africa’s imperialist role in sub-Saharan Africa, including in Zimbabwe, from the apartheid to the post-apartheid eras.

The historical nature of South Africa’s imperialism
The reality that apartheid South Africa was an imperialist power in sub-Saharan Africa was first recognised by Innes in the 1980s. He felt that South Africa had been an imperialist power since at least the 1960s.14 This was because, already at that stage, the interests of the South African state had fused with the expansionary interests of South African capital. By the 1960s, South African capital was rapidly expanding into other African countries, such as Angola, Mozambique, South West Africa (Namibia), Northern Rhodesia (Zambia), Southern Rhodesia (Zimbabwe), Basutoland (Lesotho), Bechuanaland (Botswana) and Swaziland, with the help of the South African state. Thus, by at least the 1960s, southern Africa was being used by South African capital as a source of cheap labour, cheap resources and as an easy penetrable market for its products.15 By that stage, South Africa was also militarily dominant, to the extent that it was directly propping up a number of settler and colonial regimes in southern Africa, such as Rhodesia, Angola and Mozambique.

When the settler state in Rhodesia declared unilateral independence (UDI) in 1965, South African capital already had a sizable presence in the country through companies such as Anglo-American, Old Mutual, Barlow Rand, and the South African Breweries. South Africa was, at that stage, however, not yet Rhodesia’s main trading partner; that dubious honour still went to the British. Nonetheless, as the UDI years progressed, South Africa became Rhodesia’s main trading partner. It became almost totally dependent on South Africa for vital strategic supplies: everything had to be imported from or through South Africa. Without South Africa, it would have had no access to oil, fuel, weapons, machinery, motor vehicles, or locomotives. South Africa also became Rhodesia’s main export market for its raw materials such as gold and tobacco, through the 1964 preferential trade agreement. Without this, Rhodesia would have had very few export options indeed.16

The power that the imperialist apartheid state had over Rhodesia was revealed in 1977, when the South African Prime Minister, John Vorster, informed Ian Smith that he had to come to a compromise with the movements representing the majority of Zimbabweans. Vorster was doing this not because he believed in democracy; but rather as a strategic measure to ease the growing political pressure that was being applied to apartheid South Africa by Third World nationalist governments. Such a move was also aimed at bolstering apartheid South Africa’s détente with African countries such as Malawi, Botswana and Zaire, through which South African capital was hoping to expand its influence in Africa. Initially, Smith’s government rebuffed the apartheid South African leader’s instructions. However, when Vorster threatened to cut Rhodesia’s fuel supplies, electricity supplies, and military aid, Smith capitulated. By the time white minority rule ended in Rhodesia, 25% of all businesses and shares listed on the country’s stock exchange was owned by South African capital.17

With Zimbabwe’s political independence, the ZANU-PF government initially tried to break its economic dependence on South Africa through a two-pronged strategy. Firstly, it tried to encourage further industrialisation through an import substitution initiative. Secondly, it compromised and grew closer to sectors of British capital. This saw the ZANU government approaching Lonrho to reopen and upgrade its oil/fuel pipeline and railway link to Beira in Mozambique. The idea was that Zimbabwe would import and export through Beira, rather than apartheid South Africa’s ports. Zimbabwe was also hoping to use Lonrho’s oil pipeline to break its dependence on fuel from South Africa’s parastatal, SASOL, and other South African-linked companies. Lonrho’s oil/fuel pipeline and the railway to Beira began functioning fully at the beginning of 1982. The South African state immediately intervened though its army, and through Renamo, blowing up sections of the railway and pipeline, as well as the oil depot in Beira. Indeed, it continued to attack the pipeline and railway for several years, which made them practically unviable. As a result, Zimbabwe was forced to continue to import fuel from SASOL, and South Africa generally, which proved very lucrative for SASOL and other South African-linked companies. It was also forced to continue to rely on South Africa’s railway parastatal and ports to import and export, which again was profitable for the South African state and capital.18 All of this cost Lonrho and the Zimbabwean government dearly.

In this period, Zimbabwe also grew closer to the British company, Lancashire Steel, which was producing steel and wire in Zimbabwe. The idea again was that Zimbabwe would become self-sufficient in steel and wire, and gradually export to other southern African countries. This would break Anglo-American and Iskor’s monopoly over steel and wire in the region. Anglo-American, Iskor and the South African state were simply not going to let this happen. Over a four year period, the South African state and Anglo-American systematically undermined Lancashire Steel and the Zimbabwean government, until Lancashire Steel ceased to be effective. The result was that Zimbabwe had to recommence buying its steel and wire from Anglo-American and Iskor. In the early 1980s, Zimbabwe had also begun to look to Mozambique, and Cohara Bassa, for its electricity. Yet again, Anglo-American intervened to convince the Zimbabwean government to rather build a coal-fired power station in Zimbabwe. Anglo-American cited the fact that South Africa and Renamo were constantly attacking Cohara Bassa as the prime reason why Zimbabwe should not rely on this as a source for its electricity. The Zimbabwean government promptly adhered to this advice and built a series of coal-fired power stations in the country. The main beneficiary of this was Anglo-American as it supplied all of the coal for the power stations.19

Over time, and perhaps somewhat begrudgingly, the ZANU-PF government accepted its economic dependence on the South African state. It also actually began moving much closer to South African capital, whilst maintaining a good relationship with British capital. This clearly shows that Mugabe was, and is, no anti-imperialist. President Robert Mugabe regularly met with the Oppenheimer family, the South African owners of Anglo-American, in the 1980s and promised to protect and further their interests in Zimbabwe. This protecting of Anglo-American’s interests even included using the army and other security forces to break strikes at the company’s mines,20 coal collieries and sugar plantations.21

Throughout the 1980s the ZANU-PF government also regularly received loans and finance from the World Bank and International Monetary Fund (IMF). This was partly due to the fact that South African capital had so successfully stalled Zimbabwe’s attempts at some degree of economic independence. By the late 1980s, capital flight and transfer-pricing from Zimbabwe to South Africa was also a major problem. Zimbabwe was being systematically drained by South African capital. Unable to generate enough internal resources, the Zimbabwean government needed the loans from the IMF and World Bank. In 1991, under the tutelage of the IMF and World Bank, the Zimbabwean government took the decision to implement a self-imposed structural adjustment programme (SAP).22 This saw the Zimbabwean state wholeheartedly embracing neo-liberalism. As part of the SAP, the Zimbabwean government began to privatise or commercialise state-owned assets, implement financial liberalisation, cut food subsidies, and cut social spending. These measures had devastating affects on the majority of Zimbabweans, and led to sporadic riots in the country. The US and Britain, however, praised Mugabe for imposing neo-liberalism on Zimbabweans. In fact, the US and Britain were hoping that Mugabe’s neo-liberal measures would favour their multinationals in the country, such as Lonrho and Barclays. This move by Mugabe showed however that he was no anti-imperialist champion.

Perhaps the most important part of Mugabe’s SAP was trade liberalisation. This saw the Zimbabwean government reducing its import tariffs dramatically. The result was that Zimbabwean manufacturing firms could not compete with the cheaper imports that began flooding in from, and through, South Africa. Thus, it was South African capital that really benefited from Zimbabwe’s SAP as they cornered the Zimbabwean market through their exports. This directly resulted in deindustrialisation in Zimbabwe.23 This systematic de-industrialisation in Zimbabwe in the early 1990s marked the point at which Zimbabwe’s economy went into terminal decline: since then, in most years, Zimbabwe has recorded negative economic growth. Thus, by the end of the apartheid era, Zimbabwe was more dependent on South Africa than it was at independence.

Unfortunately for Zimbabwe, the end of apartheid did not bring any relief from its imperial neighbour. South Africa’s imperial role in Zimbabwe continued into the post-apartheid period. It may no longer blow up British capital’s oil pipelines and Zimbabwe’s railways for South African companies and parastatals, but it does still play an imperial role. It does this through ensuring that ZANU-PF protects and furthers the interests of certain South African parastatals and companies in the country; even to the detriment of British and US companies. In return, the South Africa state protects ZANU-PF and its officials: many of whom are lining their own pockets with the scraps of the Zimbabwean economy that South Africa has left for them. Post-apartheid South Africa’s imperialism is not just limited to Zimbabwe. It uses its hegemonic position in Africa to further the interests of South African capital. This has turned out to be far more effective for South African capital than the violence that the apartheid state had to use to further its interests. To understand why and how the post-apartheid state plays an imperialist role in Zimbabwe, it is first necessary to grasp the nature of South Africa’s political transition.

The fusion of the post-apartheid state’s interests with those of South African capital
Although for much of its history the apartheid system produced super profits for South African capital, by the 1970s the South African economy had started to experience a problem of an over-accumulation of capital and an over-production of goods. Too many goods were being produced for the relatively small white South African market. This saw the profits of the major corporations in South Africa plunge.24 South African capital realised that further expanding into other markets offered one possible solution to alleviate the problem of over-accumulation. However, despite having captive markets in some southern African countries, such as Zimbabwe, Swaziland, and Botswana, from the late 1970s South African capital found it costly and difficult to expand into the rest of Africa, and wider, due to sanctions and South Africa’s pariah status.25 As result, by the 1980s many of the largest South African corporations realised that their profit rates could not be restored under apartheid.

This situation led sections of South African capital to favour a political settlement in South Africa, which they hoped would re-establish the process of capital accumulation. To this end some of the largest corporations began to make contact with the ANC in exile to discuss the future of a post-apartheid South Africa. As 1994 approached, many of the larger corporations presented scenario planning seminars to leading ANC figures in a bid to convince them to adopt neo-liberal economic policies, which would favour capital’s interest and re-establish the process of capital accumulation.26 It appears that these tactics had some impact: by the time of the 1994 elections, the ANC had agreed to an independent Reserve Bank and had steered clear of any more talk of nationalisation. Indeed, the major winner of the political settlement and transition to democracy in 1994 was South African capital as the post-apartheid government has served its interests well.

Since 1994, the post-apartheid state has actively promoted the agenda of the largest South African corporations domestically and within Africa. On the domestic front, the post-apartheid state adopted a neo-liberal economic policy entitled the Growth, Employment and Redistribution (GEAR) strategy in 1996, which was highly favourable to the interests of the large monopolies and financial institutions that have come to dominate the domestic economy. This was undertaken with the explicit aim of returning profitability to the South African economy and furthering the process of capital accumulation. Through GEAR, the South African state has privatised or commercialised various public entities, it has implemented trade liberalisation, and it has allowed for some labour market flexibility.27 Although these measures benefited corporations, they have had devastating implications for working-class South Africans and even smaller companies: such as growing unemployment and growing bankruptcies amongst small manufacturing businesses. Over and above this, and under GEAR, the post-apartheid government has slashed the corporate tax rate from a high of 48% in 1993 to 29% in 2006: in effect embarking on a policy of corporate welfare. The South African state has also redirected billions of Rands under GEAR, which had initially been set aside under the Reconstruction and Development Programme (RDP) to meet peoples’ basic needs, towards projects that are aimed at benefiting some of the largest corporations in South Africa.28 Indeed, the adoption of GEAR marked the fusion of the politics of the post-apartheid state with the drive to accumulate capital. With this fusion of the post-apartheid state’s interests and that of South African capital, and its expansionary agenda, it was inevitable that that South Africa would maintain its imperialist role in the southern African region. In fact, the post-apartheid South African state took a number of measures to directly assist South African capital’s expansionist agenda.

One of the first moves of the post-apartheid government to assist South African capital in the international arena was to ease controls on outward-flowing South African capital. This was done to assist foreign investment by South African companies.29 Manuel has on many occasions explained the reasoning behind this, for example in 2001 he noted that “the global expansion of South African firms holds significant benefits for the economy – expanded market access, increased exports and improved competitiveness”.30 In 2004, the government was allowing all corporations to take up to R2 billion each out of the country to facilitate their international expansion, particularly into Africa.31 Linked to this, regulations have been changed to allow South African corporations to use their domestic assets as collateral to borrow internationally in order to expand into regions such as Africa. In fact, the South African Reserve Bank provides subsidies for companies that embark on such loan schemes in order to protect them against the devaluation of the Rand.32 This has directly resulted in a situation whereby South Africa has become the largest foreign direct investor in Africa, including in Zimbabwe.33 Clearly the above demonstrates that the interests of the South African state have become fused with the drive for capital accumulation both nationally and internationally. This is the main defining feature of a capitalist imperial state. Of course the nature of the post-apartheid state’s imperialism has differed from that of the old apartheid state. It no longer has to rely on outright military aggression; rather it now relies on its political power and hegemonic position in sub-Saharan Africa to facilitate the expansion of South African capital into the continent, including into Zimbabwe.

South Africa’s policy towards Africa: neo-liberalism and NEPAD
In Africa, post-apartheid South Africa has used its hegemonic position, based on leadership by consent and at times coercion, to develop a neo-liberal policy – NEPAD – for the entire continent, including Zimbabwe. The close relationship that exists between the South African state and South African capital is the main reason why NEPAD emerged.34 Representatives of South Africa’s capitalist class, along with other neo-liberal government advisors, played a central role in developing NEPAD. In true hegemonic fashion, South Africa also brought junior partners on board, such as ex-president Obasanjo of Nigeria, so that it could pass its own initiative off as an African initiative. Nonetheless, South Africa’s control over NEPAD is underpinned by the fact that NEPAD’s headquarters are situated in South Africa. It is also no mere coincidence that Thabo Mbeki’s main economic advisor, Professor Wisemen Nkuhlu, is the executive head of NEPAD.

NEPAD itself is based on some of the classic pillars of neo-liberal economic fundamentalism. It views the private sector as the main driving force of the African economy. As such, NEPAD states that all barriers to companies making profits in African countries, such as Zimbabwe, should be removed. It explicitly promotes the development of the private sector; privatisation; free trade; financial liberalisation; labour flexibility; and foreign direct investment in Africa.35 Indeed, NEPAD states that foreign direct investment is its most important pillar. Considering that South African corporations and parastatals are already responsible for the vast majority of foreign direct investment in Africa, it is very clear who stands to benefit. In fact, all of NEPAD’s neo-liberal pillars are creating a climate that facilitates the expansion and profiteering of South African companies in Africa. The reality is that NEPAD aims to further entrench the neo-liberal policies that the IMF and World Bank imposed on Africa, only this time the South African government hopes it will be to the advantage of South African multinationals.36 Wisemen Nkuhlu stated as much in 2003, when he said:

“South Africa’s self interest in the socio- economic development of the continent is well understood by business. South Africa needs markets for her products and access to raw materials that are not produced in South Africa. Countries like Angola, the Democratic Republic of the Congo, Equatorial Guinea and many other countries have resources that are of economic interest to South Africa…. Supporting and sponsoring NEPAD, places South Africa in a strong position to become the preferred development partner by a number of African countries.”37

Over and above this, NEPAD calls for African countries to make all possible efforts to source their imports from within Africa, which they had been formerly sourcing from other parts of the world.38 Considering that South Africa is the only industrialised country in Africa, it is again clear that this aspect of NEPAD is aimed at benefiting South African capital. Indeed, the aim of this clause is to further the trade and export interests of South African companies, and to place them at an advantage in Africa when compared to their rivals from the US and EU.

Initially, in 2001, the Zimbabwean government resisted getting involved in NEPAD, perhaps recognising that the further liberalisation of its economy, which NEPAD calls for, would increasingly extend South African capital’s dominance over the Zimbabwean economy. Within a short space of time, however, South Africa’s Foreign Minister Nokosazana Dlamini-Zuma visited Zimbabwe to convince Mugabe to embrace NEPAD. This visit paid almost immediate dividends for South Africa. A few days after the visit, Zimbabwe’s Finance Minister, Herbert Murerwa, announced in his Budget speech that Zimbabwe would embrace NEPAD, and its neo-liberal dictates. South African capital would have its way. As a reward, Nokosazana Dlamini-Zuma said that South Africa would never criticise the actions of the Zimbabwean government.39

The South African government, however, has not only attempted to use NEPAD to promote trade and investment opportunities and interests for South African capital in Zimbabwe, it has also tried to use the Southern African Development Community (SADC).

Post-apartheid South Africa’s drive for a SADC free trade zone
One of the first initiatives of the post-apartheid state was to use its hegemonic position (and liberation credentials) to push other SADC members, such as the Zimbabwe, Lesotho, Swaziland, Zambia, Malawi, Namibia, Tanzania, Angola, Botswana, Mozambique and the Congo, into working towards creating a free trade area in the SADC region. In 1996, the South African government was successful in ensuring that all SADC member countries signed the Maseru Protocol, which committed members to eliminate all trade and investment barriers and tariffs by 2004 (this target was later revised to 2008). In doing this, the post-apartheid South African state was acting on behalf of South African capital. South African capital wanted and wants a free trade area in southern Africa so that it can expand its export market and investment opportunities in the SADC region.40 In short, they wanted, and want, a SADC free trade area so that they can pillage and plunder in the region, including in Zimbabwe, without any restrictions.

In order to meet the commitments that they made, all of the SADC members have been gradually reducing their import tariffs with regard to goods coming from other SADC member countries, most notably South Africa. This process has, however, not been as smooth as the South African state and capital wished. A number of SADC countries have delayed reducing their import tariffs on certain items. Nonetheless, South African capital has still already benefited from the reduction of tariffs that there has been in the region. They have also already benefited from the SADC initiative in general. This can be seen by the fact that South Africa’s exports to the SADC region, including Zimbabwe, doubled between 1998 (R16 billion) and 2002 (R32 billion).41 However, South Africa’s imports from the SADC region in 2002 only amounted to R4.2-billion. It is, therefore, clear that the relationship is unequal and it is South African capital that is benefiting from trade under the SADC initiative. In fact, South Africa stands to benefit even further when the SADC free trade zone comes into full effect in 2008.42

The post-apartheid state also launched the Cross Border Investment Initiative in Harare in 1995 under the banner of SADC.43 The aim of this initiative was, and is, to increase South African capitals investment into other SADC countries. Under the initiative, SADC members, including Zimbabwe, have identified projects in their countries that South African companies and paratstatals could be involved in. In the first year alone, the Zimbabwean government invited various South African companies and parastatals to invest in 20 different projects in the country.44

Under the direct guidance of the South African state, all the SADC member countries also came together to sign the SADC Protocol on Finance and Investment in October 2006. The SADC Protocol on Finance and Investment commits member countries, including Zimbabwe, to create a favourable climate for large companies to invest in the region. To this end, the Protocol binds member countries to harmonise their investment regimes so that extra- and intra-SADC investment is promoted. Part of this includes member countries altering their domestic investment policies to ensure most favoured nation treatment for investors from other states.45 In short, this means that SADC states would have to open their economies even further to foreign companies, in the case of SADC this is mostly South African companies, and allow these companies to move money freely in and out of their economies. This clause stands to benefit South African capital immensely, as it would be free to invest wherever and in whatever it wished.

The SADC Protocol on Finance and Investment also contains a number of clauses, which are aimed at protecting investments in the SADC region. The SADC Protocol legally binds members to fully compensate investors if any of their assets are nationalised. Added to this, the Protocol states that member countries may only embark upon the nationalisation of an investor’s assets in extraordinary circumstances, and only for public purposes. Even then, the Protocol allows such investors to seek legal recourse on a national, regional and international level if they feel that their interests have been adversely affected.46 Thus, the SADC Protocol provides investors, who happen to be mostly South African transnational companies, with a large degree of protection. Most notably, Zimbabwe has also signed the Protocol. President Mugabe has also explicitly stated that he would adhere to the provisions of the Protocol and was fully committed to the SADC Free Trade initiative. Indeed, he said he would “never let it fail”.47

Despite the highly advantageous provisions in NEPAD and the SADC Free Trade initiative for South African capital, the South African state has also used bilateral measures to promote and secure the investments of South African companies operating in Zimbabwe. The post-apartheid state wants to leave nothing to chance with regards to the interests of sections of South African capital in Zimbabwe.

Post-apartheid South Africa’s bilateral initiatives towards Zimbabwe
One of the first bilateral initiatives that the post-apartheid state undertook was to establish a Joint Commission of Co-operation with the Zimbabwean government in 1996.48 Part of the Joint Commission’s work included, and continues to include, “strengthening the economic ties between Zimbabwe and South Africa”, promoting trade between South Africa and Zimbabwe, and identifying investment opportunities for South African companies and parastatals in Zimbabwe.49 This has seen South African companies using this initiative to further expand their dominance over Zimbabwe’s economy.

In 1997, Zimbabwe’s currency came under speculative attack, which ZANU-PF’s neo-liberal policies had created the space for, as part of the Asian crisis. Within a few hours its currency lost 74% of its value, which increased the pressure on the already ailing economy. Reacting to this – and growing unpopularity and the formation of the MDC – the ZANU-PF government, amongst other things, tightened up its exchange controls in a desperate bid to stop capital flight. In the eyes of the IMF, World Bank, Britain and the US this step violated the terms of their loans to the Zimbabwean government. Indeed, the British and the US governments felt that the imposition of exchange controls was undermining the interest of their capital in Zimbabwe. As a punishment, the US and British governments ensured that the IMF stopped providing finance to Zimbabwe to cover its budget deficit and imports. This also meant that Zimbabwe was forced to use its hard currency reserves to cover both its budget deficit and to service its loans to the IMF and World Bank. The result was that the Zimbabwean economy came under even greater pressure.50 Into this breach stepped the South African government. In 2000, it offered the Zimbabwean government an economic rescue package of approximately R1 billion. Initially, it was planned that this would be made up mostly of a loan. Later, however, the South Africa state changed the structure of the “package” and instead of a loan, it promised to underwrite certain of Zimbabwe’s bonds. Mainstream commentators saw this offer by the South African state as a sign of its Pan-Africanist solidarity with ZANU-PF. However, the conditions that were attached to the “rescue package” reveal that South Africa did not offer it due to some philanthropic Pan-Africanist ideology. The conditions attached to the “rescue package” were exceptionally harsh. In order to get the “rescue package”, the South African government required the Zimbabwean government to liberalise its economy even further vis-à-vis South Africa’s economy. Added to this, as a condition of the “rescue package”, the Zimbabwean government was forced to create over 20 investment projects in the country for South African parastatals.51 This included creating investment projects in construction, tourism and natural gas exploration for South African parastatals, such as the Industrial Development Corporation (IDC).

In 2001, Zimbabwe again came under fire from the US government, and again the South African state positioned itself to benefit from the situation. In 2001, the US government enacted ZDERA. One of the main aims of the ZDERA was to ensure that Zimbabwe’s economy collapsed. The US was hoping that an economic collapse would force ZANU-PF out of office and usher the MDC into power. Section 4(c) of ZDERA explicitly required, and requires, the Executive Directors of the IMF, World Bank and other multilateral development banks to oppose any loan, credit or guarantee application made by Zimbabwe. It also stipulated that the Executive Directors of the IMF and World Bank must oppose any application for the reduction or rescheduling of debt made by Zimbabwe. Linked to this, the US used ZDERA in 2005 to demand that the Zimbabwe government immediately pay the IMF US$210 million to service its debt. If Zimbabwe failed to do so, the US and EU stated that it would be expelled from the IMF.52 Again, South Africa intervened and offered the ZANU-PF government a loan of US$500 to keep it afloat and in power. Yet again, the conditions of the loan required the Zimbabwean government to further liberalise its economy. This loan, however, never happened. Instead, the Chinese government provided a US$200 million loan to Zimbabwe for its own imperialist interests.53 Unlike South Africa, who wants a post-Mugabe ZANU-PF in power; China backs the Mugabite faction of the party and has now entered the imperial game by backing them. Added to this, the Zimbabwean government printed ZW$21 trillion to also cover part of the US$210 million demanded by the IMF. The printing of this ZW$21 trillion came at a massive expense for the Zimbabwean people: it sparked off hyper-inflation.54

With the meltdown of the Zimbabwean economy intensifying, and with President Mugabe occasionally threatening to “nationalise” certain sectors of the Zimbabwean economy (the reasons for this will be examined later in the paper), the South African state has taken a number of steps, beyond the SADC Protocol, to further protect the investments of the largest South African companies in Zimbabwe. In 2003, the South African government and the Zimbabwean government began negotiating an agreement to protect South African companies’ investments in Zimbabwe, known as Bilateral Investment Protection and Promotion Agreement (BIPPA).55 The negotiations around the BIPPA have been completed, but it has not yet been signed by the Zimbabwean government. However, the Zimbabwean government committed itself to respect the investments of the largest South African companies for as long as the negotiations continued, even though it did confiscate the farmland of a number of individual South Africans.56

All of the above bilateral measures have been conducted within the South African state’s paradigm of “quiet diplomacy”. Quiet diplomacy has actually translated into support for ZANU-PF. However, the support that the South African state has given, has been given with the aim of ensuring that a post-Mugabe ZANU-PF would be in power in the future. The South African state’s position towards Zimbabwe, and its drive to ensure that a post-Mugabe ZANU-PF remains in power, has been warmly supported by sections of South African capital. Indeed, sections of South African capital feel that their interests would be adversely affected if the South African state embraced the MDC and did not support “reformist” elements within ZANU-PF. In fact, many South African companies are completely opposed to sanctions being imposed on Zimbabwe as it would adversely affect their interests. Nedcor’s private bank division, B.O.E Private Clients, said as much in a document written for them by a political analyst J.P. Landman. The document explicitly states that:

“As for all the support that SA gives Zimbabwe, with the exception of Eskom, all the ‘help’ is given by private sector companies making money. Oil companies sell oil, banks provide credit, mining houses trade, transport companies move goods and it is business as usual. This is exactly what the French bank Paribas, Barclays in London and lately the Chinese have been doing. So why should SA companies maintain sanctions whilst the French, British, Chinese and others carry on trading.”57

In other words, B.O.E and J.P. Landman are saying: forget about sanctions – and human rights abuses as regrettable as they are – the South African state must continue with “quiet diplomacy” because we make profits out of it!
The B.O.E. document also states that the South African state’s drive to ensure that a reformed post-Mugabe ZANU-PF retains power, offers the best and most realistic option for Zimbabwe, its economy, and by association, South African capital. The document specifically states financial assistance by the South African state to the ZANU-PF government will give it the leverage, through conditions attached to this assistance, to force ZANU to reform, and ultimately further liberalise the economy. Of course further liberalisation of the Zimbabwean economy under ZANU-PF, will benefit South African capital the most. Indeed, the document states that it seems inevitable that ZANU-PF will retain power – as regimes in countries such as North Korea have – therefore, the South African state needs to continue offering financial assistance to the “regime to encourage, not regime change, but a change of direction by the regime”.58 According to the document, such action, which the South African state has and is following, offers “real possibility”.59

Certainly, from the above, B.O.E feels that the South African state has it “spot on” when it comes to its position towards Zimbabwe and the ZANU-PF. This is perhaps not surprising when one considers the extent to which the South African state and South African capital, such as B.O.E., are actually intertwined. The J.P. Landman who provides political and scenario planning for B.O.E, on countries such as Zimbabwe, is the same J.P. Landman who is an advisor to President Thabo Mbeki. Indeed, J.P. Landman is one of the prominent members of Thabo Mbeki’s Economic Advisory Council!60
The reality is that many South African companies and parastatals have benefited from South Africa’s position towards Zimbabwe. Indeed, sections of South African capital are benefiting from NEPAD, the SADC initiative, and South Africa’s bilateral overtures towards Zimbabwe. This can be clearly seen in the trade figures between South Africa and Zimbabwe, and in the expanding investments of certain, although not all, South African companies in Zimbabwe.

South Africa’s trade with Zimbabwe
Despite Zimbabwe’s collapsing domestic economy, South Africa’s exports to the country over the last decade have remained remarkably stable, and have in fact increased slightly. In 1995 South Africa was exporting R6.1 billion worth of goods to Zimbabwe,61 by 2005 this had increased to R7.5 billion worth of goods.62 The vast majority of South Africa’s exports were made up of chemical products; machinery; appliances; plastics; and processed and unprocessed food products. South Africa has also continued to import products from Zimbabwe; however, the value of the imported products has rarely exceeded R3 billion a year. Added to this, most of the products that South Africa has imported from Zimbabwe are raw materials, in the form of various minerals.63 This translates into a situation whereby South Africa mainly exports manufactured goods to Zimbabwe; while it imports raw materials. This unequal pattern of trade translates into a situation where South Africa dominates the trade relationship. Indeed, the pattern of trade between South Africa and Zimbabwe replicates the type of trade pattern found between an industrialised country and a developing country.
The South African state has been directly involved in ensuring that South African companies continue to maintain their export volumes to Zimbabwe through the state-owned Industrial Development Corporation (IDC). Through the IDC, the post-apartheid state has provided South African export companies with over R6.6 billion in finance and support to increase their export volumes to the rest of Africa,64 including to Zimbabwe.65 This has included providing direct funding, export credit insurance, export marketing and other export credit incentives.

The informal export sector from South Africa to Zimbabwe is also flourishing. In fact, thousands of Zimbabweans cross the border each day to shop in South African towns in the Limpopo province. Retailers in the Limpopo province are experiencing a massive boom, especially since the shortage of goods in Zimbabwe was amplified by Mugabe’s implementation of a price freeze on certain products in August 2007. Since then, South African border towns have been making super profits. One South African retailer operating in the Limpopo province experienced a 300% rise in sales. The retailer was quoted as saying: “We don't want the good times to end…we really are laughing all the way to the bank”.66 This form of export trade between South Africa and Zimbabwe goes unrecorded in official figures, but it is believed to be substantial. The most important type of export trade between South Africa and Zimbabwe, however, is not the informal trade; it is rather the export of strategic goods such as fuel and electricity from South Africa to Zimbabwe.

The South African company SASOL, which has close links to the post-apartheid South African state and the ANC through Max Sisulu, has been supplying Zimbabwe with fuel ever since the Lonrho oil pipeline was attacked by the South African state in the 1980s.67 In 2000, SASOL further extended the scope of its fuel exports to Zimbabwe. In that year it concluded a long-term deal with the ZANU-PF government to supply Zimbabwe with 520 000 tons of petrol, diesel and jet-fuel a year.68 This single deal accounts for over 30% of Zimbabwe’s total fuel needs. The Zimbabwean government has periodically had problems keeping up with payments due to a lack of foreign currency. Nonetheless, SASOL ensured that the Zimbabwean government backed up the deal with certain payment assurances, such as collateral, which have probably taken the form of hard assets. If the Zimbabwean government does totally default, SASOL will probably be in line to collect on the collateral that was offered by the Zimbabwean government as part of the deal. SASOL, however, will not divulge any information on what the Zimbabwean government offered as collateral (other deals discussed below will give some insight into what the Zimbabwean government may have offered SASOL as collateral on the deal).

The South African parastatal ESKOM has also become a strategic exporter of electricity to Zimbabwe. At any given time, ESKOM supplies between 4% and 20% of Zimbabwe’s electricity needs from its exports from South Africa.69 By 2003, however, the Zimbabwean government had fallen into arrears with Eskom, to the tune of approximately R100 million.70 From the actions that ESKOM took, it was clear that it, and the South African state, were angered by this. Immediately following Zimbabwe falling into arrears with ESKOM, it slapped a 12% penalty charge per month on the Zimbabwean government.71 A great deal of pressure also seems to have been put on the Zimbabwean government to settle the original outstanding debt, and the 12% penalty charge per month on the debt, by the South African state. The result was that by 2005 the Zimbabwean government had settled the debt completely.72 Ever since this, the Zimbabwean government has remained up-to-date with its payments to ESKOM. Indeed, the Zimbabwean government now pays ESKOM in solid gold bars for electricity.73 For ESKOM, supplying electricity to Zimbabwe has become very profitable. In fact, it has been speculated that should Zimbabwe again default on its payments, ESKOM will use the debt to force the Zimbabwean government to give it equity in Zimbabwe’s national electricity company, ZESA. In other words, should the ZANU-PF government again fall into debt with ESKOM; ESKOM will force the Zimbabwean government to hand over the ownership of ZESA. These are the actions of an imperialist, not a Pan-Africanist neighbour!

In order to get foreign currency to pay for its fuel, electricity, food, plastic, machinery, and chemicals that are mostly imported from or through South Africa, the Zimbabwean government has had to seek loans from private banks in South Africa, and even British banks such as Barclays (it cannot get any new loans from the IMF). In fact, it has been calculated that the Zimbabwe government needs approximately US $ 100 million a month to cover fuel imports.74 The loans that the Zimbabwean government makes at these banks, to pay mostly South African suppliers like SASOL, carry very harsh conditions.

One of the banks that is lending to the ZANU-PF government is South Africa’s First National Bank (FNB). FNB has provided the Zimbabwean government with revolving loan facility of R105 million.75 In the past the Zimbabwean government has used this revolving loan facility to import fuels. In order to get the revolving loan facility, the Zimbabwean government had to offer FNB hard collateral. FNB stated that: “In this instance, FNB is facilitating payments for fuel on a no-risk basis [to itself]…These transactions do not take the form of unsecured loans as payments are secured to FNB by means of various risk mitigation methods”.76 FNB has not, however, released information on what collateral Zimbabwe offered the bank for the loan. Nonetheless, FNB has made huge amounts of money out of this loan facility through interest charges.

Another South African Bank providing loans to the Zimbabwean state is the Rand Merchant Bank (RMB). It has provided cash loans to the Zimbabwean government to cover fuel and food imports. RMB has refused to divulge the amount of money that it has lent to the ZANU-PF government. What is known, however, is that the Zimbabwean government offered RMB two gold mines as cover for the loans.77 This instance of offering up the country’s hard assets as collateral to foreign banks for loans – to pay for fuel, electricity and food – is a common practice of the Zimbabwean government. It has paid off loans to private foreign companies and states – such as China – using land, mines, ivory and tobacco.78 This gives us some insight into the possible collateral the Zimbabwean government was offering to FNB for its loans and to SASOL for its fuel. Indeed, it would also partially explain the Zimbabwean government’s threat to “nationalise” or “indiginise” specific sectors of the economy. The ZANU-PF government is desperately trying to get its hands on hard assets to offer up to banks as collateral so that it can import fuel and electricity (while also ensuring senior ZANU-PF officials benefit through receiving “indiginsed” assets). Without this, Zimbabwe’s strategic supplies would completely cease and ZANU-PF’s grip on power would be even more precarious. Indeed, to service the debts that it owes to foreign companies, including South African companies and parastatals, the Zimbabwean government has even resorted to raiding people’s homes to secure foreign currency.

In order to raise foreign currency, the ZANU-PF government also attempted to sell petrofin bills linked to the National Oil Company of Zimbabwe (NOCZIM) on the international market in 2003. These petrofin bills are guaranteed by the Zimbabwean government and can be used by the purchasers as security when borrowing. Mainstream economic analysts were reported as saying that the bills were quite attractive – that is they offered private investors a chance to profiteer. The company that the Zimbabwean government selected to issue these petrofin bills through was the South African firm, Syfrets Corporate and Merchant Bank. Syfrets was responsible for advertising the bills. In doing so, it targeted insurance companies; commercial banks; merchant banks; financial institutions; and private individuals.79 Through issuing these bills for the Zimbabwean government, Syfrets no doubt spun a nice profit for itself.

Through the combination of trade and loans, Zimbabwe is being effectively drained. Money is flowing out of Zimbabwe to buy imports, such as fuel, electricity and maize from South African companies and the state. To raise this money, in many instances, Zimbabwe is borrowing from South African banks. It has to pay back these loans at high interest rates to these banks, which is very profitable for the banks. If it fails to do so, these companies will take ownership of the assets that the Zimbabwean government has offered as collateral. Of course, South Africa is not alone in draining Zimbabwe through this intertwined imperial trade and loans system. The South African state, parastatals and companies are competing with countries such as Britain, China and France etc. in this process. Each one is looking to maximise its share, and plunder as profitably as possible (as pointed out by the South African firm B.O.E Private Clients). Of course it is not only through this trade and loan system that Zimbabwe is being pillaged and dominated, it is also through companies, including South African companies, that own key sectors of its economy.

South African investments in Zimbabwe
South African companies are responsible for the vast majority of foreign investment in Zimbabwe. In fact, South African companies dominate Zimbabwe’s economy. Over 60% of all shares and companies listed on the Zimbabwean Stock Exchange (ZSE) are owned by South African capital.80 This represents a massive expansion since 1980, when South African capital owned “only” 25% of shares and businesses on the ZSE. Obviously, initiatives such as SADC, NEPAD and bilateral overtures from the South African state have paid off handsomely in terms of South African capital’s expansion into Zimbabwe. Despite the economic crisis, South African companies have actually been expanding their presence in key sectors of the Zimbabwean economy, which are still highly profitable, since 2000.
The most profitable sector of the Zimbabwean economy is the mining sector; more specifically the platinum mining sector. One company, the South African giant – Impala Platinum – dominates platinum mining in the country. Impala Platinum on its own, owns 80% of all platinum reserves in Zimbabwe:81 together with other smaller South African companies they control 90% of the country’s platinum. Impala Platinum only entered into Zimbabwe in 2001 when it acquired Delta Gold’s (an Australian mining company) 30% stake in Zimplats. Since then, it has steadily taken over Zimplats, through buying out other companies’ shares in Zimplats, such as the Australian mining company Aurion. In 2003, Impala Platinum made an unconditional cash offer to the remaining minority shareholders in Zimplats. By the end of this, Impala Platinum owned 82% of all Zimplats shares.82 Recently, in 2005, Impala Platinum increased its share in Zimplats to 87%.83
Impala Platinum’s mines in Zimbabwe alone are estimated to contain 187 million ounces of platinum.84 Platinum mining in Zimbabwe is such a highly profitable undertaking because the expenses occurred are in Zimbabwean dollars (including workers’ wages); while the earnings are derived in US dollars. This arrangement has seen Impala Platinum recording an after tax profit of R346 million in Zimbabwe in 2006.85 As a result of such profits, Impala Platinum has implemented plans, which will cost R1.6 billion, to expand its operations in Zimbabwe. When these expansion plans are completed in 2010, Impala Platinum would have raised its production capacity in the country from 1.8 million ounces to 2.3 million ounces.86 The outcome of these expansion plans will no doubt result in greater profits for Impala Platinum; despite the misery and suffering that surrounds them. Indeed, Zimbabwe itself benefits very little from the presence of Impala Platinum. This is because Impala Platinum repatriates most of its profits out of Zimbabwe. In fact, Impala Platinum currently exports most of its platinum out of Zimbabwe in raw form to South Africa.87 It then refines it in South African and exports it out in value added form to third countries.
Another South African mining company that has been expanding headlong into Zimbabwe is Metallon. In 2003, Metallon acquired five gold mines in Zimbabwe from the British group Lonmin for over R150 million.88 How much Metallon has made out of mining in Zimbabwe has never been disclosed because it is currently a privately-owned company. What is known, however, is that the Zimbabwean government allows it to repatriate the profits that it does make out of the country.89 Metallon must be very happy with this arrangement. By 2006, Metallon had increased its control over gold in Zimbabwe. It now controls almost 60% of Zimbabwe’s gold mining industry and has implemented plans to invest a further R440 million in the country to raise its gold production to 500 000 ounces a year.90 This is sure to produce massive profits for the company.

The owner of Metallon happens to be Mzi Khulmalo. Mzi Khumalo is an ANC stalwart who has very close links with senior ANC and government officials. Indeed, he has formally backed fellow business tycoon, Cyril Ramaphosa, for the ANC presidency. The close link that exists between Mzi Khumalo and the post-apartheid state, explains why the state has been actively working with Mzi Khumalo to list Metallon on the Johannesburg Stock Exchange (JSE). Once Metallon has listed on the JSE, the ANC government plans to use Transnet’s pension fund, Eskom’s pension fund and the Public Investment Corporation (PIC) – which controls government employees’ pensions and has used these to invest over R598 billion91 in companies on the JSE92 – to invest in Metallon in order to massively boost its value. This translates into a situation whereby the post-apartheid government will be using workers’ money to boost the size of a private company, and the wealth of their capitalist crony – Mzi Khumalo – who has already amassed a personal fortune of over R2 billion.93 The idea would then be for Metallon to use its increased value to expand internationally, including in Zimbabwe. It is planned that under this scheme, Metallon will be in a position to invest a further R 200 million in Zimbabwe. This would see Metallon possibly embarking on open cast mining to increase its output to 600 000 ounces a year.94

Mmakau Mining, another South African company, has also recently expanded into Zimbabwe. In 2005, it bought two gold mines in Zimbabwe from the Canadian company Placer Dome for approximately R44 million.95 Mmakau Mining also has very strong links with the South African government and the ANC. The owner of Mmakau Mining, Bridgette Radebe, happens to be the wife of the current South African Cabinet Minister, Jeff Radebe. She is also the president of the South African Mining Development Association, which lobbies government to implement policies that are favourable to the junior mining companies. Added to this, Bridgette Radebe also happens to be a major black economic empowerment partner of Impala Platinum.96 Clearly companies such as Mmakau Mining, Impala Platinum and Metallon have benefited from the close links that they have with the post-apartheid state. Indeed, under NEPAD, SADC and the bilateral initiatives of the South African state, they have come to dominate the most profitable sector of the Zimbabwean economy.

South African companies have also expanded their presence in other sectors of the Zimbabwean economy, besides mining, which have proved profitable despite the general economic chaos. One such sector is the sugar industry. In 2006, the South African sugar giant, Tongaat-Hulett, bought Anglo-American’s stake in Hippo Valley Estates in Zimbabwe for R254 million. This acquisition doubled Tongaat-Hulett’s production capacity in Zimbabwe to 600 000 tons a year.97 By 2007, Tongaat-Hulett was looking to expand its operations in Zimbabwe even further. It has plans to invest another R2 billion in the country. This would increase its capacity by another 400 000 tons of sugar a year. However, it does not plan to use this extra 400 000 tons for food purposes. It rather wants to use this extra crop to convert into biofuels98 – as this would prove far more profitable than producing sugar for food purposes. This in a country where millions of people don’t have adequate access to food!

The financial sector in Zimbabwe has also maintained its profit rates to date. For this reason, a number of South African banks have expanded their presence in the country over the last few years. The Standard Bank Group entered into the Zimbabwean market in 1992 through Stanbic. Following this, it acquired the African operations of the ANZ Bank, including those in Zimbabwe. Similarly, in 2005, Nedcor also expanded its Zimbabwe operations through acquiring the Zimbabwe interests of the Merchant Bank of Central Africa and Trust Holdings. The reason why Zimbabwe is attractive to Stanbic and Nedcor is because they actually benefit from the current crisis. Indeed, most Zimbabweans have shifted their savings and monies away from locally owned banks to banks that are foreign owned and that have foreign shareholder support.99 This has seen Stanbic’s and Nedcor’s client bases grow and has allowed them to remain profitable.
Other major South African corporations with investments in Zimbabwe, and who dominate the respective sectors they are involved in, include Murray and Roberts; African Cables; Barloworld; Pick n’ Pay; Shoprite; Tiger Brands; African Explosives; Group Five; Multichoice; Pam Golding Properties; Spur Corporation; King Consolidated Holdings; Nandos; Steers; Transnet; Telkom; and Sanlam.100 Indeed, many of these companies have substantial interests in the country. For example, Barloworld has R300 million invested in the country through its subsideries Pretoria Portland Cement101 (PPC) and Barzem.102 Most of these companies, although not all, are still making profits in Zimbabwe.

With the economic crisis in Zimbabwe intensifying, many South African companies, but not all, have ring-fenced their Zimbabwe operations.103 This means that they have removed the financial details of their Zimbabwe operations from their overall consolidated group financial statements. Thus, they have effectively written off their assets in Zimbabwe. This action serves a number of purposes. Writing off their assets in Zimbabwe provides these South African companies with a great deal of protection (it can also be used to lower the tax of the parent company). The Zimbabwean operations of South African companies that have taken this step no longer appear as part of their group results, and thus institutional investors on the JSE are no longer concerned whether these companies’ Zimbabwean operations make profits or not. Should Zimbabwe totally collapse and descend into Somalia-type chaos, the share prices of the South African parent companies that have taken this step will be, for the most part, unaffected. Indeed, as their Zimbabwean assets have already been written off, their collapse will not affect the profits of the group as a whole either – the profits or losses of their Zimbabwe operations are already not recorded. In accounting terms, the Zimbabwean operations of these South African companies are independent. They run outside of the group, and thus, for accounting purposes, these Zimbabwe assets no longer exist as part of the parent company. Therefore, if they collapse totally, the South African parent companies, and their shares on the JSE, won’t be hit badly. Of course, if the Zimbabwe economy takes off again – under what many South African companies and the state hope will be a post-Mugabe ZANU-PF government – the South African parent companies could then re-incorporate their Zimbabwe assets under their group financials, and continue to do business as if the crisis never happened.

Other South African companies are actually viewing the crisis as an opportunity to make massive profits. Some have speculated on the Zimbabwean Stock Exchange (ZSE), which has actually boomed since the economic crisis began, and have made super profits: the ZSE rose by 12% in 2006 in US dollar terms.104 Indeed, Zimbabwe’s assets are being snapped up at incredibly cheap prices through the ZSE. For example, Circle Cement can be bought for US$28 million on the ZSE. However, the replacement costs of its actual assets are estimated at US$300 million. This situation has seen the British conglomerate, Lonrho, raising R462 million to buy up companies and assets in Zimbabwe, which offer significant opportunity for future growth. South African companies have also become involved in this buying frenzy, and indeed are competing with Lonhro. Recently, B.O.E hosted 65 individual and institutional investors, mainly from South Africa, in Zimbabwe. The idea behind the visit was to identify investment opportunities that would offer massive rewards in the future.105 In fact, it has been reported that many South African companies and analysts are keenly watching the economic situation in Zimbabwe in order to determine the right moment to invest, and snap up Zimbabwean companies at bargain basement prices. It has been speculated that when Mugabe leaves or dies in office, South African companies will swoop into Zimbabwe to further take over vast swathes of the country’s economy.106 In doing so, they will of course be competing with companies from Britain, the US, Canada and France. Indeed, the corporate vultures are preparing to descend on Zimbabwe and when they have finished there will be little left. The real losers in this will be the Zimbabwean people. However, it would not have been the first time that they would have been sold out – the Zimabwean government has been selling the people out for years to South African capital.

South African capital’s cosy relationship with ZANU-PF
There is no doubt that land redistribution in Zimbabwe was, and is, desperately needed. The farm “invasions” of 2000, however, failed to achieve this. In fact, they were never truly meant to result in real land redistribution. This is because the farms that were confiscated were mostly handed over to Mugabe’s cronies and remained in private hands – putting a lie to the notion that the farm invasions were based on socialism. Rather the land “redistribution” process was part of a desperate bid by Mugabe to stay in power through securing the loyalty of his cronies. Beyond handing over large tracks of land to ZANU-PF cronies, the Zimbabwean government had no plans in place to ensure that the farms were maintained. Where poor rural communities did take over farms, they never received any support from the state, and the farms soon degenerated into wasteland. What is also often forgotten about the land “redistribution” process is that the land of the largest companies and most influential foreign capitalists remained untouched. Mugabe would never really take on the big capitalists head on – he will rather strike deals with them.

The largest individual landowner in Zimbabwe is South Africa’s wealthiest person: Nicky Oppenheimer. It is estimated that Oppenheimer owns approximately 960 000 hectares of land in Zimbabwe. Yet, when the government sanctioned land invasions occurred, the vast majority of Oppenheimer’s land remained untouched. One of his farms, the Debshan Ranch, was invaded by a poor rural community. Soon after this happened, Oppenheimer met with Mugabe, and threatened that unless his farm was returned he would ensure that Anglo-American would leave Zimbabwe. Cowed into submission, Mugabe promised Oppenheimer that his Debshan Ranch would be returned. Added to this, Mugabe also promised Oppenheimer that he would also return any land owned by foreign companies that may have been seized during the land invasions.107 Mugabe adhered strictly to both of these promises. Soon after the meeting, government security forces were sent to Oppenheimer’s Debshan Ranch and the people that had occupied it were promptly dealt with and evicted.

Some South African companies actually made profits out of ZANU-PF’s land “redistribution” process. In 2001, Stanbic made massive loans to some of Mugabe’s cronies to “improve” the farms that they had received: in 2001 Stanbic lent R250 million108 to “entrepreneurs” in the “agricultural” sector at high interest rates. In fact, at the time, Stanbic called on the Zimbabwean government to speed up the land “redistribution” process. They openly said that they wanted the new owners to receive proper title deeds as soon as possible so that they could start making loans to them – no doubt with the title deeds as collateral.109 It is somewhat ironic that a South African white-owned bank was cashing in on the land “redistribution” process, and calling for it to be fast-tracked, at the very same time as conservative white South African’s were condemning it.

Mugabe also has a history of availing his security forces to companies to break up strikes. He has being doing so for Anglo-American since the 1980s. In 2001, the South African-based AngloGold Ashanti also used Mugabe’s riot police to brutally break up a strike at its Freda Rebecca mine in Zimbabwe.110 The workers had gone on strike because of the appalling working conditions. Between 1996 and 2003 there were 120 accidents reported at the mine. To make matters worse, workers at the mine were not given basic safety equipment by the company. Added to this, their wages were simply not enough to feed their families. In order to supplement their income, the miners' family members, including children, were often forced into mining illegally to raise money to survive.111 Illegal miners caught by the company were also swiftly dealt with. For the above reasons, the miners embarked on the strike, and were crushed by the joint action of the Zimbabwean state and AngloGold Ashanti.

A number of South African companies have also formed close relationships with ZANU-PF officials as a strategy to protect their investments in the country. Mzi Khumalo has made a number of visits to Zimbabwe where he has regularly met with leading ZANU-PF figures. In 2006, Mzi Khumalo was personally promised by the Zimbabwean Reserve Bank Governor, Gideon Gono, that his Metallon investments in the country would be protected. Indeed, Gono said that Metallon would be allowed to repatriate all of its profit out of Zimbabwe if it wished. Under this promise, Mzi Khumalo decided to increase his investments in Zimbabwe. As an additional sweetener, Gono promised Mzi Khumalo that if Mzi was not happy with these new investments in Zimbabwe after three months, the Zimbabwean government would return his money back to him at their expense.112
Impala Platinum has also been striking deals with the ZANU-PF government. In 2006, the ZANU-PF drafted a Bill to “indiginise” 50% of all mines in Zimbabwe. The aim of this was to get hard assets to offer to banks as collateral for loans to import strategic supplies, and for ZANU-PF cronies to get their hands on additional wealth. On hearing that such a Bill was in the pipeline, Impala Platinum approached the ZANU-PF government to get itself exempted from the Bill. To this end, the Chief Financial Officer of Impala Platinum, David Brown, had a personal meeting with Robert Mugabe.113 At the meeting Brown committed Impala Platinum to handing over a tiny portion of its land, and the mining rights there of, in return for an exemption from the Bill when, and if, it is passed as an Act.114 The result, therefore, was that Impala Platinum’s substantial interests in Zimbabwe were secured and it could continue profiteering. Indeed, after the meeting with Mugabe, Brown said: “I don’t want to sound corny, but there is a genuine feeling of a win-win situation.”115 A win-win for the ZANU-PF government and Impala Platinum that is; while millions of Zimbabweans continue to suffer as their country is plundered.

The close relationship that exists between South African companies – such as Impala Platinum and Metallon – and ZANU-PF has angered the MDC. In 2005 it stated that should it come into power, it would not necessarily honour the deals that had been made between these companies and the ZANU-PF. The MDC stated that many South African companies were guilty of propping up the ZANU-PF government. Indeed, Morgan Tsvangirai stated that: “It is disconcerting that under such flagrant violations of the rule of law, South African companies such as Impala Platinum and Anglo Platinum are still negotiating deals (with the government).”116 He then went onto say that such deals would compromise the future business interests in Zimbabwe should the MDC take power. In other words, if the MDC took power, it planned to punish South African companies for supporting ZANU-PF. It would do so by favouring British, US and Australian companies over South African companies. It was reported that South African business people totally dismissed these comments from the MDC, “on the grounds that they came from someone who seems increasingly unlikely to be Zimbabwe’s next president”.117

When the need has arisen, or when profits could be made, a number of South African companies have provided assistance to the ZANU-PF government. Most notably Barloworld provided the bulldozers and road-graders that were used by the ZANU-PF to destroy thousands of homes and informal traders’ stores during Operation Murambatsvina. Providing these bulldozers and road-graders proved very lucrative for Barloworld as they sold them to the Zimbabwe government for approximately US$123 000 each. These sales certainly contributed to the R10 billion profits that Barloworld made in the same year that Operation Murambatsvina took place.118

What has also often been forgotten was that a business person, ex-ANC MP, and darling of the South African white business community, Sam Motsuenyane, headed up South Africa’s election observer team to Zimbabwe in 2002. Despite the violence that surrounded the poll, Motsueyane’s team said that the elections has been free, fair and reflected the will of the Zimbabwean people. Indeed, Motsueyane’s mission “endorsed the propriety of the election’s outcome, noting that the opposition had participated actively, thus legitimating the process”.119 In other words, Motsuenyane and his mission gave their full backing to the outcome of a flawed election. Of course, Sam Motsuenyane happens to the president of the South African neo-liberal think tank, The Free Market Foundation. The most prominent members of The Free Market Foundation happen to be the largest South African companies, many of whom have major investments in Zimbabwe. Such members include Barloworld, First National Bank, Pam Golding, Anglo Platinum, and SASOL – all of whom have business relationships with ZANU-PF. Perhaps, this may be one of the reasons why Motsuenyane and his mission ruled that ZANU-PF had won a “free and fair” election despite all the evidence to the contrary. Indeed, from the history that has been outlined in this paper, it certainly is likely that Motsuenyane and his mission backed ZANU-PF in the 2002 elections, because not to do so would have undermined the interests of South African companies, such as Barloworld, Impala Platinum, SASOL, ESKOM, Metallon, Mmakau Mining, Stanbic, Rand Merchant Bank, Syfrets and Tongaat-Hulett. If the South African mission and the state had backed the MDC, these companies’ business associate and customer, the ZANU-PF, would have been out of power. On the basis of business principles, i.e. making money, such a move would have been economically damaging for them.

Conclusion
South Africa has a long history of acting as an imperial power in Zimbabwe. During the apartheid era it systematically, and violently, undermined Zimbabwe. Through this, it ensured that the country remained economically dependent. When the ANC came into power, and its interests fused with those of South African capital, South Africa’s imperial role in Zimbabwe was bound to continue. Of course, the post-apartheid state’s form of imperialism is different in style to that of the apartheid state. It no longer has to rely on bombs and bullets; it rather uses it hegemonic position to drive through NEPAD, the SADC Free Trade Zone and bilateral initiatives with Zimbabwe, which are all aimed at furthering and protecting the interests of South African capital in the country. Such imperialism has been far more effective for South African capital than the apartheid-era style of imperialism. In fact, under such post-apartheid imperial initiatives, South African capital’s ownership of shares and companies listed on the ZSE has increased from 25% to 60%.

The post-apartheid state has also decided, along with certain – but not all – sectors of South African capital that a post-Mugabe ZANU-PF offers the best option for their future economic interests. As a consequence, the South African state provides support for ZANU-PF. Through this, it has become involved in an imperialist rivalry with the Britain and the US, who have actively backed the MDC. They have done this because they believe it offers the best option for their economic interests despite the MDC’s original roots in trade union movement (these roots have been mostly severed as neo-liberal thinking has taken hold in both factions of the MDC). Of course, by backing ZANU-PF, the South African state has also ensured that the largest South African companies have received some protection in Zimbabwe. Indeed, some South African companies, through their own initiatives, have also formed close relationships with ZANU-PF to protect their own interests in the country. Some South African companies have felt so comfortable with the assurances that ZANU-PF has given them that they have even expanded their interests in Zimbabwe. This has taken place through expanding into the mining sector, or other sectors that are still profitable, or by snapping up assets at bargain base prices. In fact, some South African companies are even using the crisis, or are planning to use the crisis, to take over large swaths of the Zimbabwean economy. They are not alone in attempting to do so. British, French and Chinese companies are attempting to do exactly the same thing. Time will tell which countries’ capital will benefit the most out of this macabre race. One thing that is certain, however, is that the corporate vultures are descending; and this is happening at the cost of Zimbabwe’s remaining, and limited, sovereignty. When the economic crisis is over, the vast majority of Zimbabwe’s wealth will be in foreign hands and its people will be much poorer. For this reason, there the best hope that Zimbabwe and its people have, is for the people themselves to build a truly anti-capitalist, anti-authoritarian, democratic and anti-imperialist struggle in the country. Indeed, the basis of such a struggle needs to be founded upon the rejection of all forms of imperialism, whether it is US imperialism, French imperialism, South African imperialism, Chinese imperialism or British imperialism. Without such a struggle, Zimbabwe will be totally dominated by one, or a combination of, these imperial powers.

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