South Africa's ambassador to Zimbabwe, Mphakama Mbete, is cautiously keeping an eye on Harare's latest climb-down on the forced implementation of the 51% indigenisation law. Mbete said he would "play things by ear" to see if Harare follows through with its new stance on the policy.Last month's about-turn on the indigenisation law came from President Robert Mugabe.Mugabe said there were "conflicting positions" in the cabinet that had caused "anxiety" among businesses in Zimbabwe, foreign investors and would-be investors. This had resulted in capital flight.The indigenisation law, enacted in 2007, hands over the controlling stake in foreign-owned firms to local Zimbabweans. An ultimatum issued at the end of March to shut down non-compliant foreign-owned firms triggered panic in the fragile economy.Now Harare is willing to rescind its approach on the indigenisation law in an effort to attract foreign direct investment.block_quotes_start Where there is unfairness, we will ask the Zimbabwean authorities to intervene block_quotes_end"We think it is very helpful to clarify the situation between Zimbabwe and other countries in terms of other countries participating in the Zimbabwean economy," Mbete told Business Times this week."We are trying to make sure as South Africa that our business community and our government understand this law."I think the fact that Mugabe has clarified it shows that the government realises there were some difficulties and some confusions."I will play things by ear and I will watch the situation and manage it as best as I can with the collaboration of the Zimbabwean government."story_article_left1Economic observers suggest the forced acquisition of foreign-owned companies has mostly prejudiced companies that have links with South Africa. Among these companies are some that are market leaders.South Africa has a foothold in all the major areas of the Zimbabwean economy, among them mining, banking, retail, tourism and agriculture.The dominant South African presence in the Zimbabwean economy was evident at last week's Zimbabwe International Trade Fair in Bulawayo.South Africa had the most exhibitions, with 33 companies represented, surpassing even China, which traditionally had the bulk of exhibitors at previous shows.One South African firm that is a key anchor in the Zimbabwean economy is Zimbabwe Platinum , a subsidiary of South Africa's Impala Platinum.Others are Stanbic, a unit of South Africa's Standard Bank, MBCA, a unit of Nedbank, and Ecobank, in which Nedbank holds a 20% stake.Retailer Pick n Pay has the second-largest supermarket chain in Zimbabwe under its TM supermarket group. South Africa is also a big buyer of Zimbabwe's tobacco crop, currently under auction.Mbete said the 51% threshold in the indigenisation law was a concern and a talking point for many South African firms which had an eye on investing in Zimbabwe."Business people are about acquiring profits, so it is always difficult for them to deal with a situation where they have to share profits," he said."We understand that and we are trying to manage it. Where we think there is unfairness in the implementation of this indigenisation policy, which has now been clarified to us, we will ask the Zimbabwean authorities to intervene and assist us in solving those difficulties."block_quotes_start South Africa must benefit, but Zimbabwe must also benefit from that business relationship block_quotes_endMbete said South Africa had benefit ed most from Zimbabwe's economic collapse .Zimbabwe's gross national product has shrunk to almost half the size it was in 2000. Violent and chaotic land seizures have been widely blamed for precipitating the fall in agriculture, once the mainstay of Zimbabwe's economy.South African companies have taken advantage by meeting increased demand for imports and being able to buy struggling Zimbabwean companies cheaply.Mbete said: "It is obvious to anybody watching the situation [that South African companies have benefited], but as I am saying, we want not only to benefit, but to assist Zimbabwe, its society and Zimbabwean people to rebuild their economy."It is understood that South Africa is now out to consolidate its position as Zimbabwe's largest trade partner. It wants to send three trade missions a year, instead of one.story_article_right2This is a deliberate strategy meant to intensify participation in the Zimbabwean economy by South African investors."We regard Zimbabwe as an important trading partner, we are aware that Zimbabwe is one of the top importers of goods and services from South Africa in the African continent and we value that," said Mbete."We want to nurture that and build that relationship, being aware that building this economic and business relationship means we must work towards a win-win situation."South Africa must benefit, but Zimbabwe must also benefit from that business relationship," he said.Trade between South Africa and Zimbabwe stood at $4.2-billion (R62-billion) in 2015, according to the Zimbabwe National Statistics Agency, with South Africa accounting for 48% of Zimbabwe's overall trade.rayzr21@gmail.com..