Sunday, January 31, 2010

Strangulation of Zimbabwe

Strangulation of Zimbabwe
By Editor
Sun 31 Jan. 2010, 04:00 CAT

TRUTH and sincerity are priceless virtues in any kind of dealings. These virtues make things better and easier. Yet many people choose to shy away from them.

This is clearly happening with regard to sanctions that have been imposed on Zimbabwe by Western countries, which have caused massive suffering on the innocent and defenceless citizens during the last decade. As if this is not enough, these sanctions have now become the single biggest threat to the life of Zimbabwe’s inclusive government.

The current tiff between partners in the inclusive government - ZANU-PF and MDC – is clearly a result of untruths that have been perpetuated over time.

The inclusive government, which will be one year old in two weeks time, has been hanging by a thread ever since its inception because of endless squabbles. These contretemps led to the near-collapse of the shaky power-sharing government on October 16, 2009 when MDC pulled out, only to be coaxed back by an urgent SADC summit on November 5.

Since then, the country’s leaders have been negotiating to deal with a host of outstanding issues to the full implementation of the Global Political Agreement (GPA) that bore the coalition, with ZANU- PF's main concerns being the removal of sanctions and the closure of foreign based radio stations beaming into Zimbabwe.

The MDC's list of outstanding issues include the “controversial” appointments of Reserve Bank governor Gideon Gono, Attorney General Johannes Tomana, the country's ten provincial governors and the perceived persecution of Tsvangirai's close aide Roy Bennett, who is pending being sworn in as deputy agriculture minister. Before the parties took a break from the negotiations, there appeared to be a breakthrough on the talks as parties covered a lot of ground, clearing most of the issues of the 27-item agenda. The negotiators appeared to be within reach of an ultimate resolution of the issues which have been creating conflict in this shaky coalition until British foreign secretary David Miliband told the truth about the sanctions.

The talks have now been thrown into chaos. They have taken a dramatic turn for the worst after last week’s revelations by Miliband that the EU would only remove sanctions on Zimbabwe at MDC’s request.

Here is what Miliband said while addressing the House of Commons last Tuesday:

“I agree that numerous aspects of the situation in Zimbabwe are of deep concern. It is right to say that, over the past year, the economic situation has changed in a quite fundamental way, although it is not quite right to refer to the detention of Roy Bennett as a continued threat to him through a legal case. In respect of sanctions, we have made it clear that they can be lifted only in a calibrated way, as progress is made. I do not think that it is right to say that the choice is between lifting all sanctions and lifting none at all. We have to calibrate our response to the progress on the ground, and, above all, to be guided by what the MDC says to us about the conditions under which it is working and leading the country. A range of EU sanctions is in place. Some of them refer to individuals, others to so-called parastatal organisations. Different sanctions have been brought in at different points, and different sanctions are the responsibility of different ministries in the Zimbabwean system. I believe that EU sanctions have helped to send a strong message, and that they have had a practical effect without hurting the Zimbabwean people, which would have been a sanction too far.”

Miliband had been asked by North-West Norfolk member of parliament, Henry Bellingahm whether he agreed that sanctions should not be lifted until the arrest of MDC treasurer Roy Bennet and concerns about human rights were addressed.

All along, the MDC has been untruthful and insincere about their role in the sanctions against Zimbabwe by the US and the EU. They have maintained that they have no role in the removal of sanctions. The US and EU have also been untruthful and insincere about the effects of the sanctions. They have maintained that the only sanctions in place are “targeted” at the 203 members of President Robert Mugabe’s inner circle, who are only not permitted to travel or do business in Europe and America.

To the contrary, the sanctions have not affected even one of the so-called targeted individuals. After all, they, including President Mugabe still travel to the US and EU. It is clear for all to see that the sanctions have affected the poor and “untargeted”.

Here is how. It is common knowledge that because of sanctions, the US and EU have suspended all forms of balance of payments support, technical assistance, grants and infrastructural development flows to both government and private sectors and stopped all lending operations to the country. Yes, the humanitarian aid comes in and is channelled through US and European NGOs and agencies, not through the government. Is it not because of sanctions?

The shortage of foreign currency resulted in the country accumulating external payment arrears.

Zimbabwe's balance of payments position deteriorated significantly since 2000 from the combined effects of inadequate export performance and reduced capital inflows. According to government figures, foreign exchange reserves declined as a result, from US $830 million or three months import cover in 1996 to less than one month's cover by 2006.

The foreign exchange shortages severely constrained the country's capacity to meet foreign payment obligations and finance critical imports such as drugs, grain, raw materials, fuel and electricity, leading to hunger, closure of hospitals, fuel shortages, power cuts etc.

We, as a newspaper, have been in Zimbabwe for almost three years now and we have not seen any of the so-called targeted people suffering. Instead, we, along with millions of the poor and untargeted people, have had to deal with everyday problems listed above.

The country has had a significant build up in external payments arrears. Total foreign payments arrears increased from US$109 million at the end of 1999 to US$2.5 billion by the end of 2006.The worsening of the country's creditworthiness and its risk profile led to the drying up of sources of external finance.

The withdrawal of the multilateral financial institutions from providing balance of payments support to Zimbabwe also had an effect on some bilateral creditors and donors who have followed suit by either scaling down or suspending disbursements on existing loans to the government and parastatal companies.

Prior to these developments, Zimbabwe was highly rated in the international financial markets.

The capital account, traditionally a surplus account, has been in deficit since 2000. As such, international investors prefer other countries for investment, depriving Zimbabwe of much-needed foreign direct investment.

Sanctions have also affected the image of the country through negative perceptions by the international community. Zimbabwean companies are finding it extremely difficult to access lines of credit. As a result, they have to pay cash for imports.

As a result of the risk premium, the country's private companies have been securing offshore funds at prohibitive interest rates. This has had a ripple effect on employment levels and low capacity utilisation as reflected by the recent shortages of basic goods and services. Declining export performance has also adversely affected the standards of living for the general populace, and because of the deteriorating economic conditions, the country has experienced large scale emigration, especially of skilled labour, thus further straining the economy. As at last year, three million people were estimated to have emigrated. The country recorded 90 per cent unemployment levels.

The sanctions have adversely impacted on Foreign Direct Investment to Zimbabwe. Investors are shying away and FDI inflows have collapsed from US$444.3 million in 1998 to only US$50 million in 2006.

In addition, Anglo-American companies have been strongly discouraged from investing in Zimbabwe by their home governments. This has adversely affected investment levels into the country, thus accentuating the foreign exchange shortages leading to further shortages of fuel and imported raw materials. The shortage of fuel has a domino effect on all sectors of the economy.

All these things are there for all to see. Zimbabweans themselves have opted to move forward and rebuild their country.

But in order for Zimbabwe’s economic recovery to go ahead, these sanctions must be repealed. This is also a call from SADC and the African Union.

The MDC, which entered into a partnership with ZANU-PF, has always maintained it has no influence over the issue insisting removal of the sanctions. The question is, if the MDC has had no role in the sanctions, why would the British government wait on its advice to remove them?

This only plays into what President Mugabe and ZANU-PF have always believed and have said consistently since 2000, that the sanctions came about following a lobby by the MDC and can only be removed following a similar lobby by the same party. This also plays into what President Mugabe has been saying all along, that actually sanctions were never about conditions in Zimbabwe but about an imperialistic agenda.

The MDC has found itself struggling under the weight of the same sanctions. And as long as these sanctions continue to exist they will undermine the position of the MDC in the unity government. They have been left exposed by Miliband. ZANU-PF can continue to point that the “MDC campaigned for these sanctions, it is their fault this has occurred and we will not implement our side of the GPA reforms until the MDC ask Britain or and the United States to lift these sanctions that these countries campaigned for.”

For Miliband to come out and then say we will take the cue from the MDC; we will wait for the MDC to tell us when to lift them; this is what President Mugabe has been saying all along. So Britain has to conduct itself very, very carefully with regard to the GPA in Zimbabwe particularly to sanctions.

US President Barack Obama is also demonstrating unhelpful double standards by directly negotiating with reclusive regimes in North Korea and Sudan and yet refusing to open direct channels with Zimbabwe.

When he campaigned for presidency, he said he would talk to his enemies unlike George W Bush.

He comes into power and has been seen to be doing this. The diplomatic relations and negotiations are going on with Korea, with Iran, with Al Bashir in Sudan, all these leaders of these countries considered human rights violators. But with Zimbabwe, that direct line between the White House and State House in Zimbabwe has not been re-opened. This only goes to show that there is an iota of vindictiveness against Zimbabwe. The US’s exclusive law on Zimbabwe - Zimbabwe Democracy and Economic Recovery Act (ZDERA) - still remains.

For the interest of progress in Zimbabwe, the sanctions must be removed. There is a stalemate in the inclusive government and, as we have stated before, the sticking point is the issue of sanctions.

However, we think the removal of these sanctions must be a collective effort by all concerned. MDC must play its role. ZANU-PF must play its role. The US and EU must play their role.

MDC must play its role by, according to Miliband, advising Britain to lift the sanctions. ZANU-PF must also play its role by ensuring that conditions that brought about the sanctions are done away with. Political violence, human rights abuses and violent farm disruptions, repressive laws, which were reasons advanced by the West for imposing sanctions, must end completely. All agreed reforms must take place. ZANU-PF must realise that these sanctions are not entirely MDC’s baby.

The GPA does not in any way give the obligation of dealing with the restrictive measures on the MDC alone. It is a collective effort in the GPA between ZANU-PF and MDC in the context and within the aegis of the inclusive government.

The US and EU must play their role by removing the sanctions, letting Zimbabweans solve their own problems.

As long as sanctions remain, the inclusive government will not function smoothly. This means that the necessary constitution, political and economic reforms that are necessary to usher free and fair election within the 24 to 36-month lifespan of the inclusive government will not take place. It also means there will be no free and fair elections even next time around and it will be back to square one.

It will be sad indeed for all these things to happen when everyone concerned knows what to do.

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2 Comments:

At 11:52 PM , Blogger MrK said...

The coming into force in the year 2002 caused the collapse of Zimbabwe's trade surplus, because it put the government of Zimbabwe on a credit freeze. As all international trade occurs through credit, this caused a freeze in trade as well. Going from a surplus from $322 million in 2001, freezing the government's credit lines lead to a trade deficit of $18 million in 2002. This in and of itself is proof that Zimbabwe is under economic sanctions, has been since 2002, and that these sanctions had a devastating economic effect - as they always have around the globe. The MDC campaigned for these sanctions, and members of the MDC (Eddie Cross) helped draught them. The MDC in collusion of it's backers in the US and UK set out to destroy the Zimbabwean economy. Of course, being the cowards that they are and not having the support of the Zimbabwean public, they blame 'mismanagement by Mugabe', hiding behind existing racist ideas about Africa. Again underlining the essentially Rhodesian nature of the MDC. But here is the proof, beyond a doubt.

Zimbabwe's Trade Deficit in millions of US dollars (the negative deficit is a surplus) [1]

2000 -295.6
2001 -322.5
2002 18.2
2003 108.3

Source: Table 1: Zimbabwe - Key economic indicators, 2000–2007
Special Report, FAO/WFP Crop And Food Supply Assessment Mission To Zimbabwe, 5 June 2007

 
At 11:55 PM , Blogger MrK said...

Another 'aha' moment. One of the farms/properties forcibly redistributed belongs to the Oppenheimer family.

Zim: More white farms listed
2003-08-14 09:54

Among the farms listed to seizure this week were six properties belonging to one of the wealthiest and most powerful business empires in Africa, the Oppeinheimer family.

The Oppeinheimer family controls two of Africa's richest companies, the Anglo American Corporation and De Beers, the continent's diamond mining giant.

In Zimbabwe they are believed to have owned the largest tracts of land by a single family or company.

Two years ago in 2001, the government forcibly acquired over 35 000ha of land from the Oppeinheimer-owned Debshan ranch.

Officials said the Oppeinheimer family owned land in Zimbabwe that is almost the size of Belgium.

The family has disputed the allegations arguing that its owns only 137 314ha of land in Zimbabwe, when Belgium's total area is 3 051 900ha.

 

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