Kenneth Clarke's faux pas.

Position:UK Chancellor of the Exchequer's inadequate knowledge of African politics and economy

British Chancellor of the Exchequer, Mr Kenneth Clarke, brought a silky smooth promotion of privatisation to southern Africa, but his success was limited by his glaring dearth of knowledge about the region's complex political and economic predicament.

Mr Clarke sought to sell the concept of privatisation to South Africa and Zimbabwe in particular. The British view this as the best way of dealing with the two countries' large, loss-making public-owned corporations. However, his quest was confronted by a wary South African Government and a stubborn stance from Zimbabwe.

In South Africa, Mr Clarke hosted a privatisation seminar addressed by several British experts. But President Mandela's Government will not pick up the message without winning the support of the politically powerful trade unions.

He met even more resistance in Zimbabwe. Beset by a crushing budget deficit and crippling interest rates, the country's economy is in bad need of a boost. This year's good rains will bring a short term improvement, but long term economic growth will hinge on efforts to reduce the deficit, currently standing at 13% of GDP. Once that has been brought down, then interest rates, which now stand at nearly 35%, will also drop.

Mr Clarke asserted that revenue from privatisation would reduce the budget deficit and further decrease state expenditure on subsidies to the parastatals. In addition, once the corporations are privately owned they would become a new source of tax revenue.

"Britain has been a pioneer in privatisation and now many other diverse countries are following our lead," said Mr Clarke in Harare. "Zimbabwe may well find that, adapted to suit local circumstances, privatisation maybe a boon to the economy and provide better and less expensive services to the people."

With a bevy of British bankers at his side, Mr Clarke offered expertise in the financial act of properly packaging and selling off state-owned corporations and utilities.

But his efforts appear to have fallen on stony ground in Zimbabwe, where the Government values the state-owned corporations as useful sources of patronage. The number of jobs and sinecures the parastatals provide to political supporters, appears to be more important to President Mugabe than the fact that parastatals are inefficient and carry large debts.

The Zimbabwe Government's intransigence towards privatisation is obvious. Instead of selling the state owned corporations to private buyers, it has taken the...

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