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Opinion: Zimbabwe law squeezes foreign-owned firms

Mugabe's new indigenization law will enrich his followers at the expense of Zimbabwe's people.

Long after Mugabe and Zanu-PF lose political power, this law will ensure that Zimbabwe's most valuable assets remain in their hands.

Major South African investors have already stated they will freeze any further inflows of capital to Zimbabwe as a result of the new law. Existing mines are talking about freezing their operations.

Harare economists say the new law will virtually stop any new foreign investment in the Zimbabwe. This is bad news for Zimbabwe's economy which is struggling to get back on its feet after 10 years of decline. Zimbabwe's economic decline is the largest ever recorded by a country not at war, according to the World Bank.

This destructive new law should be a wake-up call to South African President Jacob Zuma if he still thinks that he, or anyone else, can do business with Robert Mugabe.

Prime Minister Morgan Tsvangirai opposed the new law and attempted last week to stop it, saying that it was enacted without due process, but Mugabe and his Zanu-PF party rejected the objections of Tsvangirai and his Movement for Democratic Change.

In office for one year, Zimbabwe's power-sharing government has succeeded in improving a few things. The unwieldy coalition has managed to tame the country's hyper-inflation, although it was at the expense of the Zimbabwe's currency. The new government has also brought a measure of stability to the country.

However, this new indigenization law, taken with the failure to liberalize the press and the refusal to fully respect the rule of law, shows that Mugabe still calls the shots and that he intends to wring every last drop of wealth from the country at the expense of the very people who he claims to champion.