German firm cuts supply of banknote paper to Zim
German firm cuts supply of banknote paper to ZimBy Kingsley Kaswende in Harare
Saturday July 05, 2008 [04:01]
THE German company that has been supplying Zimbabwe with banknote paper has with immediate effect cut supply to the Reserve Bank of Zimbabwe (RBZ). This was after pressure piled on Giesecke & Devrient company from the German government as well as activist groups over the past few weeks to stop delivering money to the Zimbabwean regime as part of European Union (EU) sanctions against Zimbabwe.
Last week, German chancellor Angela Merkel urged the international community to take a firmer stance against President Robert Mugabe and asked the company to stop supplying Zimbabwe with money paper.
Resultantly, Germany’s development minister, Heidemarie Wieczorek-Zeul, wrote to the firm asking it to immediately stop the shipments of paper to Zimbabwe because the paper money supplied was used to prop up the Zimbabwean regime.
But RBZ governor, Dr Gideon Gono, said the move would not affect the smooth flow of business. Giesecke & Devrient has been supplying banknote paper to Zimbabwe but the mounting political tension between the southern African country and the EU forced the German government to ask the company to stop supplying the paper.
The company has been supplying blank paper money with security features to Fidelity Printers, a Zimbabwean company that prints the Zimbabwean bank notes on behalf of the Central Bank at its printing presses just outside Harare.
“The Management Board of Giesecke & Devrient GmbH, Munich, today decided to cease delivering banknote paper to the Reserve Bank of Zimbabwe with immediate effect,” a statement posted on the company website reads.
“The company has taken this step in response to an official request from the German government and calls for international sanctions by the European Union and United Nations.”
The statement, signed by the company’s chairman, Dr Karsten Ottenberg, indicated the company’s decision was a reaction to the political tension in Zimbabwe, which was mounting significantly rather than easing as expected.
It said the company took account of the critical evaluation by the international community, German government and general public to arrive at its decision.
“In delivering banknotes and banknote paper, Giesecke & Devrient is subject to strict rules defined by the World Bank. The company continues to rely on the political and moral assessment provided by international trade regulators,” the statement reads.
But the RBZ said Giesecke & Devrient’s move would not affect the smooth flow of business as “proactive and appropriate measures and strategies” had already been put in place once it became clear from international sources that this was the direction banknote paper suppliers were likely to be forced to go.
“Following the widely publicised termination of banknote paper supplies to Fidelity Printers (Pvt) Ltd, by Giesecke & Devrient of Germany, the Reserve Bank of Zimbabwe wishes to advise and assure the nation that this development will not disrupt the smooth flow of business,” Dr Gono said.
He said Giesecke & Devrient had been suppliers of banknote paper to Fidelity Printers for the last 40 years.
“To this end, therefore, the banking and transacting public should go about their business in the usual manner, as the above-mentioned development will not have any impact to the economy,” he said.
However, Dr Gono did not mention the alternative course of action the Central Bank would take.
The move comes in the midst of another shortage of cash that has hit the financial market.
The shortage has been caused by the fast depreciation of the Zimbabwean dollar as well as hyperinflation estimated at over two million per cent, which has been forcing the Central Bank to print more banknotes.
posted by MrK @ 3:31 AM
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Harare has ordered NGOs to temporarily scale back or cease operations, accusing them of illegally channeling funding to the opposition MDC party and in March’s elections of “going around threatening villagers in rural areas that the donations they were handing them would be the last if they voted for Zanu-PF and President Mugabe.” [1] It is out of a desire to eclipse Western interference in the election that the Zimbabwe government has taken this step.
Are the government’s accusations credible?
For the last seven years, the US and its allies have cut off all development assistance to Zimbabwe, disabled all lines of credit, stopped the World Bank and International Monetary Fund from providing financial assistance, and have pressured private companies from doing business with the country. The result has been “a form of collective punishment designed to destabilize the country and shake the population’s faith” in the government. [2] Hundreds of thousands, if not millions, of Zimbabweans — orphans and old people, the sick and the down and out – have suffered. And to hide their hand in creating the misery, the US and Britain and their allies have blamed it all on Harare’s land reform policies, an inversion of the causal chain. It was not Harare’s land reform policies that created the disaster, but the West’s meting out collective punishment in response to the land reform policies that undermined Zimbabwe’s economy and created widespread suffering.
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