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“Cartel Power Dynamics in Zimbabwe”
Attached is the report and it is worth reading in full as countries like China, South Africa, UAE, DRC, Rwanda, Uganda, Switzerland, Singapore, Mauritius, Russia, Lebanon, Belarus, Britain, Mozambique, etc. are mentioned. Below are a few excerpts.
Maverick Citizen is publishing this report on cartel dynamics in Zimbabwe. Sadly, it is not safe to do so in Zimbabwe at a time when freedom of expression and the press has been brutally suppressed. Journalists and activists are being regularly arrested, imprisoned and sometimes tortured and murdered.
From this study we find that there is consensus across political parties, academics, and wider society that cartels go against the public interest, and they are characterised by collusion between the private sector and influential politicians to attain monopolistic positions, fix prices and stifle of competition.
The study finds three types of cartels: the first being collusive relationships between private sector companies; the second being abuse of office by public officeholders for self-enrichment; and the third and main type being collusive relationships between public officials and the private sector. Case studies in the transport, mining, energy and agricultural sectors are then used to show how Zimbabwe’s political patrons are at the heart of almost all cartels – enabling public officials loyal to them and private sector companies from which they benefit to acquire illicit profits.
Zimbabweans do not trust many of the key institutions in the country. They do not trust in the money issued by their Central Bank, or the electoral process that bestows power on their leaders. They also do not trust their leaders to serve the interests of citizens, and there is no trust in the courts, the military or the police to serve them well.
The international sanctions regime increased Zimbabwe’s reliance on non-Western countries, such as China, South Africa and the UAE, and companies registered in tax havens to enable trade and investment. These countries are either financially secretive or have weak anti-money laundering legislation, which then allows for economic actors (Zimbabwean and foreign alike) to exploit these vulnerabilities by engaging in cartel behaviour.
In many cases, these actors are private individuals but, in some cases, they are connected to state apparatus, as will be shown by examples in the case studies.
Interviewees pointed to the Second Congo War as a key juncture at which collusion between PEPs and the private sector gained prominence in the Zimbabwean political economy.
The War broke out in 1998 between the government of the Democratic Republic of Congo (DRC) and rebels backed by Rwanda and Uganda, and eventually drew in eight countries. Zimbabwe’s army supported the DRC government and was described by the UN as “a major guarantor of the security of the [DRC] government” (United Nations, 2003).
Despite this commendation, the war effort came at a considerable cost to Zimbabweans – an estimated US$1 million a day 76 at a time when the country was defaulting on its loans to the IMF, World Bank and Paris Club creditors. This profligacy was motivated by the self-enrichment of senior military and government officials through looting of diamonds, timber and other resources from DRC. Collusion between these state officials and private sector actors led to the creation of cartels in DRC, which are estimated to have transferred US$5 billion worth of mineral assets from the DRC state into private hands.
Oryx Diamonds Ltd – a diamond mining company in which entities linked to the Zimbabwean military and the Congolese president had large shareholdings. The concession on which the venture was based was valued at $1 billion and had been taken from a state mining company by decree.
Oryx Natural Resources, a third shareholder owned by an Omani businessman, made illegal donations to ZANU-PF during the 2000 Parliamentary elections. Colonel Muammar Gaddafi later became a shareholder in Oryx Diamond mine.
Factional fights in ZANU-PF are revealing the activities of cartels, as each faction tries to dent the popularity of the other. Revelations around the fuel, grain, NSSA, medical import and Marange diamonds cartels have emerged from factional fights. Such revelations are not targeted at triggering genuine reform, but rather serve to spread factional propaganda.