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Zimbabwe’s elections this week probably won’t end President Robert Mugabe’s 33-year rule or his policies that stifle investment, according to analysts such as John Meyer at London-based SP Angel Corporate Finance LLP.

Mugabe, 89, and his Zimbabwe African National Union-Patriotic Front forced mining companies such as Impala Platinum Holdings Ltd. to cede a majority share of their local assets to black Zimbabweans or the government. The southern African nation has the world’s second-biggest platinum and chrome reserves as well as deposits of diamonds, gold and coal. Morgan Tsvangirai, who’s challenging Mugabe for the presidency in the July 31 vote, has promised to unravel the measure.

“Few investors would like to see Mugabe remain in place,” Meyer, a mining analyst, said in a July 24 phone interview. “A new government could inspire significant capital investment in Zimbabwe. I don’t think there’s much chance of that happening.”

The economy entered a decade-long recession after Zanu-PF initiated violent invasions of white-owned commercial farms in 2000, decimating agricultural output, including tobacco. Formerly a corn exporter, Zimbabwe was gripped by food and fuel shortages. Inflation soared to 500 billion percent in 2008, according to the International Monetary Fund. A year later, an egg cost about 1 billion Zimbabwe dollars in Harare, the capital.

Violent Backlash

Mugabe and Zanu-PF are more likely to win a close election because of a combination of an “engineered voter roll,” apathy and fear of a potential of a violent backlash if they lose, Jolyon Ford, a political analyst with Oxford Analytica said in a July 25 interview.

“The Zimbabwe Election Commission-led voter registration centers are well-staffed and well-resourced in provinces that favor the Zanu-PF,” Tsvangirai said in an editorial in the Washington Post today. “They are deliberately inefficient in MDC strongholds.”

The 2008 black empowerment law requires all foreign and white-owned businesses to sell or cede 51 percent of their shares to black Zimbabweans or the National Indigenization and Economic Empowerment Board.

It has affected miners such as Anglo American Platinum Ltd. and Aquarius Platinum Ltd. Bankers including Barclays Plc and Standard Chartered Plc are also showing how they’ll comply, indigenization minister Saviour Kasukuwere said in March.

“Western nations will be slow to invest in Zimbabwe if Zanu-PF wins, but countries like Russia and China won’t have the same concerns,” Paul Moyo, chief economist at Twilight Investments, an investment advisory company in Bulawayo, the nation’s second-largest city, said by phone on July 23.

China Trade

Trade between China and Zimbabwe totalled $1 billion last year, according to the Zimbabwean government. Chinese companies also operate Chrome mines in the country.

The Bankers’ Association of Zimbabwe said in an e-mailed statement on July 24 that it wouldn’t comment on the election in case it was “misunderstood.” Zimbabwe’s Chamber of Mines also declined to comment on the ballot. Impala Platinum spokesman Bob Gilmour declined to comment.

“The legislation raises hurdles for operating in the country,” Meyer said. “Some of the businesses are only able to operate because of the low labor costs.”

Under an agreement in September, the minimum monthly wage for workers at Zimbabwean gold mines is $197 and $212 at diamond and platinum mines, according to an industry body. That compares with an average salary for an entry level South African gold-mine worker including benefits and housing of 10,261 rand ($1,055), according to the South African Chamber of Mines.

Inconclusive Elections

The last elections in 2008 ended inconclusively. While Tsvangirai’s Movement for Democratic Change won a majority in parliament, he abandoned the presidential race after leading the first round, saying more than 200 of his supporters had been killed before and after the vote.

Regional neighbors in the 15-nation Southern African Development Community brokered a 2009 power-sharing agreement between the main political parties, leaving Mugabe as president and appointing Tsvangirai, 61, as Prime Minister. Zanu-PF retained control of the security forces, while the MDC took over most economic ministries.

‘Economic Hell’

Tendai Biti, the MDC secretary-general who’s finance minister, abolished the Zimbabwe dollar and allowed the use of the U.S. dollar, British pound and the South African rand. The measure reduced inflation to single digits, where it remains today, and helped supermarkets restock empty shelves. The economy has grown every year since 2009, with Biti predicting 3.4 percent growth this year.

“The MDC has lifted us out of economic hell and most people are content to leave things be because getting rid of the old man Mugabe is easier said than done,” said Joram Murere, who owns a household appliance shop in Harare’s Graniteside industrial area. “At least with Biti’s U.S. dollars we can eat and the shops are full, even if no one is buying much.”

Mugabe blames Zimbabwe’s economic woes on sanctions by the U.S. and the European Union, which impose a travel ban and asset freeze on senior members of his government. They also include an embargo on arms and “equipment for internal repression.” The EU has said it will lift the sanctions if the vote is peaceful, transparent and credible.

Zanu-PF supporters in its mainly rural strongholds believe a Mugabe victory will see blacks “take over the economy,” Tyson Maparutsa, a tobacco grower in the northern Mvurwi district, said in an interview.

‘Our Minerals’

“We don’t need or want foreign or white people digging our minerals from holes,” he said. “They’re our minerals and we must control the wealth. The MDC will sell Zimbabwe to Americans and the British, leaving us as lackeys.”

City-dwellers are more concerned with stability in the economy and lower inflation.

“Mugabe is talking of bringing back the Zimbabwe dollar. No one, not even his own party, wants that to happen,” Tafadzwa Gumbo said in his furniture-making factory in Mbare, a suburb of Harare. “If Mugabe wins, we’re straight back to the stone age.”

(Adds Tsvangirai comment in sixth paragraph.)