Zimbabwe's Robert Mugage defends local ownership laws

President Robert Mugabe defended his controversial local ownership laws at his 86th birthday celebrations on Saturday, saying they were designed to broaden Zimbabwean participation in the economy.

Mugabe's government passed an "indigenisation" law in 2007 to localise control of foreign firms. On Monday companies will have to provide information on shareholders and plans on how they intend to conform to the new law, which seeks to ensure locals own at least 51 percent.

"This law will enable us to examine every large company in the country and determine whether the ownership principle has been observed," Mugabe told a crowd in Bulawayo, Zimbabwe's second largest city.                                           

"If not, then 51 percent must come to our people."

Companies then have 45 days to present their indigenisation plans -- those who fail face up to five years in jail.

Mugabe maintained the intention was not to nationalise firms but his proposal has split the fragile unity government.                                           

Prime minister Morgan Tsvangirai, who leads the Movement for Democratic Change, said the law was "null and void" as it was not debated by the new cabinet. 

Analysts said that if instituted it would damage the already ailing economy and jeopardise foreign investment.

"No potential investor is willing to be reduced to minority ownership, despite providing the majority of the capital, state of the art technology and ready access to their markets," said Eric Bloch, an economic commentator. 

ZANU-PF has come under fire for throwing lavish celebrations, estimated to cost about $500,000, for Mugabe whose birthday was actually on Feb. 21, while most of the population lives on below a $1 a day.

The power-sharing government  has stabilised the economy after the crisis which many Zimbabweans blame on Mugabe's policies. But aid agencies say over two million Zimbabweans will still need food aid this year. 

Government workers, who earn an average $160 per month, went on strike this month to press for higher wages.

"Holding these huge celebrations, even as civil servants strike for better wages, shows that the inclusive government has done nothing to change the arrogance of ZANU-PF, which insists on maintaining a personality cult around its leader, Mugabe, by nationalising what should be a private affair," said John Makumbe, a veteran political commentator and Mugabe critic.                                           

"It also shows the party's priorities are not in line with the people''s aspirations." 

Critics say the combative Mugabe, who looks fit for his age, should step aside for a younger leader. But he won a new five-year mandate to lead ZANU-PF at its congress last December. Mugabe would be 89 at the next elections, which are expected in 2013.