WORLD

Barclays, the official bank of despots?

PATRICIA TREBLE November 26 2007
WORLD

Barclays, the official bank of despots?

PATRICIA TREBLE November 26 2007

Barclays, the official bank of despots?

PATRICIA TREBLE

Doing business in a dictatorship can shine an uncomfortable spotlight on businesses. Just ask Barclays. The British bank, which made a $70-million profit from its Zimbabwean operations last year, is under scrutiny after the Sunday Times revealed that it made loans to at least five of President Robert Mugabe’s cabinet ministers—members of the ruling elite responsible for the nation’s humanitarian catastrophe. The five are also on a European Union sanction blacklist that states that “no funds shall be made available, directly or indirectly, to [blacklisted] people.”

In the first six months of the year, Barclays loaned $1.5 billion to the country’s newly

created black farming elite, including the five cabinet ministers, under a Zimbabwean program aimed at kick-starting the nation’s moribund food sector. The agricultural nation’s food production, and indeed its entire economy, has been in a freefall since Mugabe began seizing his country’s 4,000 white-owned farms in 2000, handing out choice prizes to his cronies. The concern over the Barclays loans is that, at a time when most arable land lies fallow and one-quarter of Zimbabweans are dependent on international food aid, the funds will vanish into private pockets. While Barclays won’t confirm the loans to the five politicians, they say their Zimbabwean operations don’t violate sanctions.

Last week, Europe temporarily lifted its visa restrictions to allow the man who organized the farm seizures, Lands and Security Minister Didymus Mutasa, to testify at a tribunal of the International Center for Settlement of the Investment Disputes. The case involves 10 Dutch citizens who want $50 million in compensation for their old lands. Mutasa, who according to the Times got Barclays money, confirmed what everyone knew: the regime had wrongfully seized the white farms. M