Zimbabwe

Q. 1. The potential tax income of the draw of merchandise. Find the most sure figure for this, tell where you obtained it and explain wherefore you think it is the most bona fide figure that you could obtain. Ans. 1. Zimbabwe started selling infield and earned more than ?1 billion by selling infield (The rouse Association). The soldiers forced throng to take shape laboriouser. They also tormented them and their children with heavily armed force. There is no official estimate for the taxation from selling stones and rhombs in that sector but an unofficial estimated range is demonstrate ?1. billion from that field in Zimbabwe (The Press Association).The easterly alluvial baseball field fields of rhombus estimated to meet one-forth read of the total demand of adamant crossways the world in 2006. They earned spirited gear revenue and take in by trading rhombs into several countries, like, Israel, India, Lebanon and Russia. The regime of Zimbabwe earned $20 one million million million from the effective sale of rhombs in 2008 (The Press Association). scarce the serious liaison is that most of the earned income and revenue of exploit baseball fields is felonious and it has no political or official record.If a Chinese dig compevery wants to position up a legal incitenership with Zimbabwe establishment then it depart achieve great revenue with high profit and growth by minelaying diamond in Marange which is a newly founded diamond field in Zimbabwe. This particular field of diamond is situated in the eastern field which earned high revenue through and through diamond excavation in Zimbabwe. To expand their trade facilities, they arranged some private political programes to aim buyers from foreign countries. Most of the diamond fields in Zimbabwe argon vicious and distributing conflicting diamonds to many a(prenominal) countries.These nonlegal digging fields ar expecting high profit and thus they forced poor people to work harder downstairs the mechanism of Dig or Die (The Press Association). Poor people be bound to work under the heavily armed shelter guard in these bulge outlawed fields of diamond. According to Abbey Chikane, the Kimberley Process everywheresee for Zimbabwe, marked the Marange rhombus field in Zimbabwe as a evidence diamond field to export conflict-free diamonds to meet the demand of diamond across the world (Mutsaka, Wonacott and Childress, 2010).The tender right organization of Zimbabwe is avering the diamond mining though several sinful diamond fields which atomic number 18 doing illegal activities through killing many poor helpless men, raping women and hurt children to nourish hard work from them. To solve these problems, the government of Zimbabwe has survive very serious to qualify up legal diamond mines to export conflict-free diamonds. Q. 2. Who controls the Mining Development batch? Do they have any existing joint venture partners? Who in the Zimb abwean government leave behind influence decisions regarding the enthronisation?Ans. 2. Diamond merchandise and supplying business is currently controlled by the government of Zimbabwe. Though it is controlled by the government, thither is a front man of great powerful illegal diamond fields in Zimbabwe and these fields are engaged in several illegal and non- estimable activities with the help of the armed police and security guard force of Zimbabwe. The presence of political battle and high rate of corruption in the Zimbabwean economic, political and social atmospheres guided the government to a wrong direction. organismness the Zimbabwe monitor of the world diamond control body, Abbey Chikane, also stated that the diamonds are ready for sale in the international market to provide stripped international standard of diamond (Mutsaka, Wonacott and Childress, 2010). According to the investors, the mining of diamond in Marange was conducted through use of virtual slaves under th e control of armed soldiers in 2008 (Mutsaka, Wonacott and Childress, 2010). Therefore, this field is non working legally or the government whitethorn be non serious about fact of diamond mining in Zimbabwe.The Kimberley Process is an international supervise body to control conflict-free diamond supply from apprised diamond fields under governmental rules and regulations. Mr. Chikane proclaimed that Zimbabwe sight start trading the Marange diamonds under desirable guidance of the government of Zimbabwe. According to him, the Zimbabwe government has taken several effective steps to pose legal diamond fields and to remove illegal sources of diamond. The Kimberley Process did not consider the fact of taking steps against governments which violated the rules of the human-rights organization in Zimbabwe in diamond mining.The Kimberley team investigated that the heavily armed security forces killed many people, raped women who were illegally mining in the Marange fields in July, 2008 (Mutsaka, Wonacott and Childress, 2010). But the officials denied these charges against them and the government and they told that the security guards were there to give protection to the governmental part of the Marange diamond fields in Zimbabwe. The Kimberley members restricted sales of diamonds by the Marange diamond fields as they were supplying non-certified stones in the international market with proper certificates.This helped to get certification for the diamond fields in Zimbabwe. It also allowed merchandise several some other legal diamond fields into the foreign market. Zimbabwes government earned $20 million from the legal fields of diamonds in 2008 (The Press Association). There are some political conflicts in Zimbabwe in the snub of diamond exporting and mining from legal and illegal diamond fields of the country. After the election in Zimbabwe in 2008, the situation in Marange diamond field has become very much concern about their posture of the Kimberley P rocess.A top member of the World Diamond Council, Martin Rapaport reigned from the Kimberley Process to protest against their activity and controlling mechanism of the work at. Human rights organizations in Zimbabwe are presently become very much concern about the export of diamond in the international market subsequently getting the green symptom to restart the sale of diamonds from the Marange diamond fields, where heavily armed soldiers deployed by the electric chair Robert Mugabe have been charged for conducting illegal activities (Peta, 2010).The Zimbabwean government investigated that more than 4 million carats of diamonds were founded from the controversial fields of the Zimbabwean diamond fields. Marange was one of them. The estimated look on of the total sale of diamonds will be around $1. 7bn according to the Zimbabwes 2010 reckon and that will be very much helpful to provide a boost to the economic condition of Zimbabwe (Peta, 2010). Investment from the foreign inv estors is always back up the mining emergence corporation of Zimbabwe.To meet the international demand of diamond, they are gradually expanding their international business through legal export of conflict-free diamonds of certified diamond fields of Zimbabwe. To sum up their revenue, the government of Zimbabwe is very much interest to incorporate many foreign investors across the world. The director of the Centre for interrogation and Development which is a Zimbabwean human-rights organization was tracking the operations in Marange diamond field in Zimbabwe (Peta, 2010). According to them at the remainder of 2008, there was no improvement in the condition of the human rights in the Marange diamond field.Mr. Maguwu, the director of the research and bustment centre, also showed how diamonds from the Marange Diamond field were being smuggled out from Zimbabwe to Mozambique and it became a profitable strategy for the soldiers of Zimbabwe through illegal diamond export to other f oreign countries (Peta, 2010). The Zimbabwe government forced the African Consolidated Resources to take back their claims against the government and their officials in the issue of diamond supply and export from the Marange diamond field in Zimbabwe at the end of 2006.The high court of Zimbabwe decided that all diamond mines should hand over their power of illegal diamond export to the central bank of Zimbabwe and those mines could get back their power after resolving the dispute in 2008 (Peta, 2010). Therefore, after the political and social battle in Zimbabwean diamond fields, it has become mandatory to get certified by the government, the diamond research and victimisation centre and also by the human rights organization of Zimbabwe. Game surmise Q. 3.Game theory is very useful in preparedness strategy. Your firm, if it decides that it is a good investment, wants to win the rights to develop the mine. Explain how you can use grainy theory to plot a winning strategy. Ans. 3. If the Chinese firm decides that it will be a good investment and also wants to win the rights to develop the diamond mines in Zimbabwe, then they should decipher a strategic plan with plump for theory application. The firm can invest in the Marange diamond field through legal contract of partnership with the mining company.They should be aware of the fact that there are no illegal activities in the mining field against the human rights organization in Zimbabwe. The government of Zimbabwe should follow ethical motive of the social and political aspects in the case of diamond mining from different legal fields of diamond. According to the perfect formation of the game of this case of development in the field of diamonds, the most effective and suitable pay-off will be the combination of the investment of the Chinese firm and the investment in the legal fields of certified diamonds in Zimbabwe.The investment of the Chinese firm will be more profitable if the firm can invest into a l egal field of diamonds, rather than investment into an illegal field of diamonds. There are some other factors related with social, honourable and legal perspectives of the country in the case of diamond mining. These aspects should be passing concerned by the Chinese company who is very much interested to get with some Zimbabwean mining company through legal partnership contract. The Chinese company can get high revenue and profit if it makes a contract with an illegal company but other social, legal and ethical aspects will not be there.There may be several strategies but only one pay-off will be economically, financially, legally and ethically viable for this case. Pricing Strategies Q. 4. Explain why the damage of diamonds in international markets is so high. Note that a good cause to this question will involve research into the pricing strategies of the firms that sell diamonds as well as the application of basic economic principles. Ans. 4. The charge of diamond is very high in the international market. If demand increases for a trade good, the expenditure of that commodity will also increase keeping other factors as unchanged.The demand curve of a commodity is downward slopping in the price of the commodity and the quantity demanded for the commodity framework. Demand Curve of commodity outlay Demand Curve Quantity Demanded (Source varian, 2003, pp. 4-6) The price of the commodity and the quantity demanded of the commodity are taken respectively as the vertical and the horizontal line of the diagram. The demand of diamond is gradually change magnitude in the international market. In the above diagram, according to the basic concept of the demand curve, the demand is symbiotic on the price of the commodity.Therefore, the price of any commodity should also be dependent on the demand of the commodity. In general, if the demand increases, the price should make up according to the demand curve. But in this case, the price of diamonds is graduall y increasing with the increase in the price of the diamonds. The price of the diamonds is very high in the international market to reduce the demand of diamonds in scarcity of diamonds in the global market. The scarcity of diamonds is the main indicate for the increasing price of diamonds in the international market.At present, there are few diamond mines from which high quality diamonds can be found. On the other hand, there are few diamond mining companies in the world. Therefore, the competition in these companies is negligible. If a firm with monopoly power in a market increases the price of its commodity, there will be no change in the demand of the commodity. This service for the diamond mining companies encourages them to increase the price to achieve high revenue and profit from this business.In the competitive market the firms can not increase the prices of their products because if they increase the price the demand of the product will reduce in those firms and the consu mer will prefer to buy from any other firm at lower price of the commodity. There is another important reason for the increase of the price of diamonds in the international market. Most of the exported diamonds are smuggled out from the African diamond fields in different countries. These smugglers have pertinacious very high price for these diamonds in the foreign market.Though this reason is illegal and not providing any economic theory, it is a very important reason for the high price of diamonds. Ethics Q. 5. What is the Kimberly Process Certification schema? What are the elements of the scheme? Does this investment satisfy these? Why or why not? Ans. 5. Mines Minister of Zimbabwe, Obert Mpofu, stated that more than 90% of the total demand from the international market was achieved by the trade watchdog, the Kimberley Process group in November in 2009 (BBC News, 2009).The armed police force in the diamond mining field killed more than 200 poor people by torturing them at the M arange field of diamonds (The Press Association). The activists wanted to remove these pathetic and illegal activities which were gradually reducing the socio-economic culture of the economy. They also announced to reform the planning and controlling strategies of diamond fields in Zimbabwe and they fixed 2010 as the deadline of this reformation (BBC News, 2009).The Kimberley process is a controlling body under the governmental power in Zimbabwe. With the help of this organization, the government earned a lot revenue and profit but it was not helpful to maintain social, legal and ethical aspects of the economy. To achieve high profit and growth, this organization forced people to work harder in the diamond fields of Marange. The security guards killed many people, raped women and forced children to work continuously in the fields. The Kimberley Process decided to work against the human rights groups of Zimbabwe.Therefore, this process is not concern about the ethics of the organiza tion and they are away from maintaining social responsibilities in Zimbabwe. The government denied these charges against their officials and they are still not very much worried about the fact. The 70-member Kimberley Process group authorise a compromise diamond contract at a visor in Namibia in 2009 (BBC News, 2009). To maintain balance in the socio-economic aspects of the economy, an independent monitoring body with independent inspector was established. This organization mainly monitors the diamond mining from the controversial fields.As this process is completely away from maintaining ethics and any other social responsibilities, the investment in this organization will not provide any knowledge of social, economic, legal and ethical responsibilities. This will not be suitable or helpful for the future in a long-run perspective. Q. 6. Do you think that this investment is ethical? Why or why not? Ans. 6. Investment in this organization or process will not be an ethical decision for the Chinese mining company. This process helped to work illegally to achieve high profit in an illegal diamond mining sector.This process is not maintaining any ethics which should be helpful for long-term planning. This process also affects the environmental adulteration in Zimbabwe. It is also damaging farming irrigation systems in Zimbabwe (Conflict & Blood Diamonds, 2009). If the Chinese mining company wants to observe a sustainable growth and development for a long-term perspective, they should not go for the partnership contract with the Marange Diamond mining fields and should not even go for investing in these illegal unauthorized and non-certified diamond mining fields in Zimbabwe.