Saturday, October 25, 2014 Local time: 08:54

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Zimbabwean Leaders Differ on Cause of Foreign Direct Investment Drought

Economist Eric Bloch said the opening of a one-stop investment center should clear the pathway for foreign capital, investment decisions are largely driven by political and economic factors, not paperwork

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Thomas ChiripasiGibbs Dube

Zimbabwean President Robert Mugabe and Prime Minister Morgan Tsvangirai officiated Monday at the opening of a so-called one-stop investment center meant to encourage foreign capital inflows, Mr. Mugabe blaming Western sanctions for the scarcity of such investment while Mr. Tsvangirai blamed political volatility in the country.

VOA Studio 7 correspondent Thomas Chiripasi reported from Harare that Mr Mugabe called for an end to sanctions saying this would encourage potential investors. He and about 200 of his closest associates are the target of travel and financial sanctions.

Economist Eric Bloch said that while the opening of a center to simplify red tape should ease the pathway for foreign capital through the bureaucracy, foreign direct investment decisions are largely driven by political and economic factors, not paperwork.

Bloch dismissed remarks by President Mugabe that potential foreign investors have been discouraged by Western sanctions.

He said targeted sanctions imposed by the West and the European Union are only affecting President Mugabe and his inner circle.

Like Prime Minister Tsvangirai, Bloch said Zimbabwe will only attract meaningful new investment if the political environment significantly improves.

The Zimbabwean economy has mended considerably since the current government of national unity was put in place in 2009, but it remains fragile and there remains a lot of uncertainty as to how the government's ongoing indigenization initiative intended to put control of large enterprises into black hands will affect new investment.

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