In class we talked about the importance of political stability to a country's economic growth.
Read the following and think about how you would feel if you had invested in a Zimbabwe company. Would you be interested in investing in Zimbabwe now? Do you think the government's actions are going to lead to an increase, or decrease, in the standard of living experienced by its citizens?
EXCERPT:
"In meetings this week, Zimbabwe's government failed to agree on whether to implement a controversial black-empowerment law. Under the law announced last month, foreign-owned firms have 45 days from March 1 to inform the government how they will achieve majority black shareholding within five years. Top executives at companies that refuse to cede majority shareholdingto locals could face jail.
Prime Minister Morgan Tsvangirai, until February 2009 an opposition leader, has ordered the law withdrawn, saying it will heighten Zimbabwe's reputation as a risky investment destination. He and his partners have said the law was published without their consent.
Mr. Mugabe, 85 years old, and key ministers have dug in their heels. Speaking to reporters at an investment conference earlier this week, Mr. Mugabe, 85 years old, said foreign companies should be content with holdings of up to 49%. "It's only foolish ones who will say no," he told reporters. "Wise ones would take it up."
