Wednesday, August 18, 2010

(STICKY) (SENATE.GOV) INHOFE INTRODUCES ZIMBABWE SANCTIONS REPEAL ACT

This is stunning news.

Senator Jim Inhofe has introduced legislation to repeal the ILLEGAL economic sanctions that the Bush Administration used to destroy the Zimbabwean economy. ZDERA was introduced in December 2001, and unlike landreform, coincides with the collapse of the Zimbabwean currency and trade surplus in 2002.

It put the Zimbabwean government on a credit freeze, and did so outside of the perview of the United Nations. Interestingly, Barack Obama confidant and co-sponsor of ZDERA, came up with a new piece of legislation this year that would extend the economic sanctions against Zimbabwe, called ZTDERA or the Zimbabwe Transition to Democracy and Economic Recovery Act of 2010, S. 3297 of the 111th US Congress (Senate). Also see (TalkZimbabwe) US senator introduces Zimbabwe Sanctions Repeal Act, by Philip Murombedzi, and (NewZimbabwe) Sweden breaks ranks over EU sanctions, Staff Reporter. Also see US Bill to repeal Zimbabwe sanctions by Staff Reporters.

Check out Stephen Gowans' article on these revelations here: US Senator Comes Clean On Zimbabwe Sanctions, reproduced on NewZimbabwe.com here.

From the Senator's page at senate.gov:

INHOFE INTRODUCES ZIMBABWE SANCTIONS REPEAL ACT

Contacts: Jared Young 202-224-5762
Kathryn Junk 202-224-1282
August 5, 2010

WASHINGTON, D.C. – U.S. Sen. Jim Inhofe (R-Okla.), a member of the Senate Foreign Relations Committee, today introduced the Zimbabwe Sanctions Repeal Act of 2010. This new legislation will lift U.S. economic sanctions originally imposed on the African nation of Zimbabwe in 2001, and restore the country’s economy and aide in the nation’s transition to democracy.

In 2001, economic sanctions were imposed against Zimbabwe as a result of President Robert Mugabe’s oppressive leadership and fiscally irresponsible programs that collapsed the economy. These sanctions specifically directed the U.S. to oppose and vote against any extension of loans, credit, or guarantees to the Government of Zimbabwe as well as any debt cancellation or reduction owed by the Government of Zimbabwe to the United States or any international financial institution.

As a result of a 2008 power-sharing agreement engineered by the Southern African Development Community and the United States, Mugabe remains as President, but opposition leader Morgan Tsvangirai holds the post of Prime Minister. Under this new government, the Zimbabwe economy is starting to recover and democratic freedoms are reemerging. Repealing the 2001 sanctions will allow the Zimbabwe economy to recover fully and assist in its process of transition to democracy.

“I am pleased that the African nation of Zimbabwe continues to recover under the new power-sharing leadership set by both the United States and the Southern African Development Community,” said Inhofe.

“I commend the efforts of the power-sharing government there as they have reduced inflation and improved GDP and basic government services like medicine, education, and transportation. It is my hope that my legislation will help Zimbabwe return to being called the ‘Breadbasket of Africa’ and continue on the road to democracy.”


Now there is some rewriting of history in this statement. For instance:

In 2001, economic sanctions were imposed against Zimbabwe as a result of President Robert Mugabe’s oppressive leadership and fiscally irresponsible programs that collapsed the economy.


The problem with that statement, is that by late 2001, the economy had not yet collapsed. So there is a temporal dissonance with that statement. The dollar did not collapse, and the trade surplus did not collapse, and tobacco exports did not decline, until the year 2002, when ZDERA put a credit freeze on the Zimbabwean government, as this statement acknowledges. In fact during the year 2001, trade surplus and tobacco exports GREW.

2000 2001 2002 2003 2004 2005 2006
Tobacco (US$ m) 548.8 594.1 434.6 321.3 226.7 203.8 206.9
Trade Deficit (US$) -295.6 -322.5 18.2 108.3 305.2 387.9 231.3

Source: Table 1: Zimbabwe - Key economic indicators, 2000–2007


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10 Comments:

At 12:59 AM , Blogger MissBwalya said...

MrK,

What I find very intriguing about the text of S.3722 aka “Zimbabwe Sanctions Repeal Act of 2010” is that the first 5½ pages are dedicated to Mugabe’s and ZANU-PF’s misdeeds, Tsvangirai’s rise and the disputed elections, formation of the unity government, etc before it ever gets to the fact that the U.S. did indeed impose sanctions that directed financial institutions to “oppose and vote against any extension…of any loan, credit, or guarantees to the Government of Zimbabwe”. It’s almost like a footnote! Why not just say, “Oh, by the way we imposed sanctions that made it impossible for the government to access credit, which sent the country circling the drain even faster?”

There’s no denying that Mugabe exacerbated some of the conditions that led to Zim’s swift decline, but he wasn’t alone in perpetrating these actions. This will be an interesting bill to follow. Thanks for bringing it to my attention!

 
At 3:30 AM , Blogger MrK said...

MissBwalya,

The first two sections are just a face saving exercise. For instance, they allege that 700,000 people were made homeless by Operation Murambatsvina, even though the total population of Harare is 1.2 million. In other words, they claim that 58% of the population of Harare was made homeless - a ridiculous claim.

They claim that the turnaround of the economy is because of Morgan Tsvangirai and Tendai Biti, even though they are just following the programs of Gideon Gono and Patrick Chinamasa.

What is more, the decline of the Zimbabwean economy accellerated in the year 2002, the year ZDERA came into force, which proves to me that it weren't President Mugabe's policies, but economic sanctions that caused the downward spiral of the Zimbabwean economy.

Please check out this chart, which clearly shows the significance of the year 2002 in the decline of the Zimbabwean currency. Notice that it declined more in the year 2002, than in the previous 6 years.

2002 is the first full year the Zimbabwe Democracy and Economic Recovery Act of 2001 (signed in December 2001) was in force.

 
At 3:35 AM , Blogger MrK said...

I have dealt with the content of ZDERA, and it's impact on the Zimbabwean economy here.

These are economic sanctions, and they had no more of a benevolent influence on the Zimbabwean economy than the economic sanctions against Cuba, North Korea, Iraq or Iran have had on theirs.

I would say that 90% of the negative impact on the Zimbabwean economy has been caused directly by the West, first through Economic Structural Adjustment Programmes from 1991 to 1996, and later through economic sanctions, from 2002 to today.

 
At 4:51 AM , Blogger MrK said...

Beyond The Credit Freeze

There are many more economic sanctions against Zimbabwe than the ZDERA credit freeze. PayPal, Microsfoft, Barclays Bank are also enforcing an economic embargo on Zimbabwe, one that of course directly hurts the Zimbabwean people, as is the intention of economic sanctions.

You are not allowed to donate to organisations in Zimbabwe using PayPal. And as this article shows, even Microsoft is not allowed to deliver software to organisations and universities in Zimbabwe.

Zimbabwe: Nestlé Defies Calls to Pull Out of Country
Farirai Machivenyika and Mabasa Sasa
2 October 2009

Harare — NESTLé, an international food and beverages giant, has become the first foreign company to openly hit out at the West's illegal economic sanctions regime saying an ongoing spirited campaign to have it shut down its Zimbabwe operations will not and will never lead it to close shop.

Over the past week, Western media organisations have carried out a co-ordinated effort to harass Nestlé into pulling out of Zimbabwe because one of its milk suppliers is Gushungo Farm, owned by the First Family.

However, Nestlé, which is headquartered in Switzerland, has hit back saying it would never consider closing shop in Zimbabwe just because some individuals in the West do not like President Mugabe.

In a statement issued on Sunday, Nestlé said: "Nestlé is a truly global company which operates in almost all countries in the world in a wide variety of political settings.

"Despite the ongoing crisis in Zimbabwe, Nestlé has not considered moving its operations out of the country.

"By providing basic food products to Zimbabwean consumers, Nestlé aims to meet the needs of the local population, many of whom are vulnerable and disadvantaged.

"Had Nestlé decided to close down its operations in Zimbabwe, the company would have triggered further food shortages and hundreds of job losses among its employees and milk suppliers in an already very difficult situation."

Sections of the international media have, since the start of this week, been urging consumers to boycott Nestlé products until the company either stops procuring milk from Gushungo Farm or completely pulls out of Zimbabwe.

In its position statement, the company added: "Nestlé is a fully-fledged member of the local community in Zimbabwe, employing 200 people there and providing additional employment for many hundreds of milk farmers and other suppliers."

Switzerland is not a member of the European Union -- which has sanctions on Zimbabwe -- and is not bound by the economic embargo.

An observer yesterday said: "The campaign makes it evident to those, if there are still any, who were doubting that the declared and undeclared sanctions are not targeted at all.

"It is a very systematic process that has as its ultimate objective the desire to squeeze Zimbabweans and make them revolt against a constitutionally-elected Government."

Yesterday, Internet news reports quoted United States Assistant Secretary of State Johnnie Carson as saying Washington was considering extending its economic sanctions regime on Zimbabwe.

 
At 4:51 AM , Blogger MrK said...

(Continued...) This is despite the fact that Sadc, Comesa, the African Union, the Non-Aligned Movement and the recent Africa-South America Summit -- who together constitute over half the world's population -- have declared that the sanctions should be lifted forthwith.

America and the EU have for years claimed that the sanctions are targeted at specific individuals, a claim that has been roundly discredited.

The US sanctions law, the so-called Zimbabwe Democracy and Economic Recovery Act, enforced through a series of presidential executive orders, has sanctioned American companies from doing business with Zimbabwe or risk facing punitive measures.

The sanctions regime also bars multilateral financial institutions in which the US has a representative from approving any extension of funds to Zimbabwe.

In addition to this, Zimbabwean companies like Ziscosteel, ZB Bank and the Zimbabwe Mining Development Company are sanctioned by the US government and have had their overseas accounts frozen.

In 2005, Africa University -- which is ironically funded by American Methodists -- revealed Microsoft had refused to supply them with key software on the instruction of the US government.

Zimbabweans resident in their home country are also barred from opening accounts with California-based PayPal, which is the largest online transacting system.

The company has told Zimbabweans that they were instructed by the US Treasury not to allow them to open accounts.

The US Treasury administers the sanctions regime for Washington.

Another US company, HJ Heinz, pulled out of Zimbabwe in September 2007 after it was instructed not to buy raw materials for the production of cooking oil from "farms stolen from white farmers".

In Europe, Barclays Bank was in 2007 investigated at the instigation of British authorities and the MDC for allegedly lending £750 million to some Cabinet min-isters.

The following year Standard Chartered Bank was also investigated for allegedly breaching the sanctions regime by supporting Zimbabwean companies and for generally operating in the country.

Immense pressure was piled on the banks to halt their local operations.

However, the findings of those investigations were never revealed, suggesting that the authorities were motivated by an agenda to weaken Zimbabwe's economic standing.

In July 2008, Tesco -- one of the largest retail chains in the world -- ceased buying farm produce from Zimbabwe because it was coming from land acquired from white commercial farmers for resettlement purposes.

The company revealed that it had been pressured by the British government and politicians from various parties not to support Zimbabwe's new black farmers.

The cancellation prejudiced Zimbabwe of £1 million in potential yearly revenue.

That same month, Giesecke & Devrient of Germany abruptly stopped supplying Zimbabwe with banknote paper after an official request from that country's development minister.

The move precipitated an acute shortage of bank notes in Zimbabwe.

 
At 8:07 PM , Blogger MrK said...

The upside of the Zimbabwe Sanctions Repeal Act of 2010 is that it repeals Zimbabwe Democracy and Economic Recovery Act of 2001, and the credit freeze that is contained in Section 4C of that act.

The downside is that Section 4C is continued as Section 4D of the Zimbabwe Transition to Democracy and Economic Recovery Act of 2010. I quote:

`SEC. 4. SUPPORT FOR DEMOCRATIC TRANSITION AND ECONOMIC RECOVERY.

`(d) Multilateral Financing Conditions- The Secretary of the Treasury shall instruct the United States executive director to each international financial institution to oppose any extension by the respective institution of any loan, credit, or guarantee to the Government of Zimbabwe unless the proposed extension meets the following conditions:

`(1) There are sufficient controls for transparency and international oversight of the use of relevant funds.

`(2) Relevant funds, in cases where the international financial institutions are providing direct funding to or through the Government of Zimbabwe , will not be administered through or in coordination with--

`(A) ministries that have not demonstrated a commitment to reform and responsible fiscal management; or

`(B) the Reserve Bank of Zimbabwe , unless there are sufficient guarantees and a pattern of evidence that governance problems within the Reserve Bank of Zimbabwe have been addressed such that relevant funds will not be redirected for extra-legal purposes.

`(3) Relevant funds will not be administered by or directly accessible to individuals or financial institutions sanctioned by the United States.


Basically, Russ Feingold wants to micro-manage which ministries can receive funding (MDC controlled ones) and which cannot (ZANU-PF controlled ones).

Also, he wants a land audit.

And most tellingly, ZTDERA, rather than having a footnote on withdrawal from the DRC like ZDERA, has an entire section that is defense of the Oppenheimer Family's mining interests.

 
At 8:07 PM , Blogger MrK said...

SEC. 9. ACTIONS TO STOP ILLEGAL DIAMOND FLOWS.

(a) Findings- Congress makes the following findings:

(1) According to credible human rights organizations, the armed forces of Zimbabwe continue to exert control over diamond mines in the Marange district of eastern Zimbabwe , and have committed horrific abuses against miners and local residents, including extrajudicial killings, beatings, and torture.

(2) A review mission of the Kimberley Process traveled to Zimbabwe from June 30 to July 4, 2009, and documented extensive smuggling of diamonds and abuses against civilians by the police and army forces of the Government of Zimbabwe . The review mission reportedly found there to be `credible indications of significant non-compliance' by the Government of Zimbabwe with the minimum standards of the Kimberley Process.

(3) On December 11, 2009, the United States Senior Advisor to the Permanent Representative of the United States to the 64th Session of the General Assembly stated that the United States has `serious concerns about Zimbabwe's non-compliance with the minimum requirements of the Kimberley Process, particularly relating to smuggling and grave violence in and around the Marange diamond fields'.

(4) The army and police forces of the Government of Zimbabwe continue to serve primarily as instruments of ZANU-PF, and their illegal activities involving diamonds continue to fuel the efforts of ZANU-PF to undermine democratic processes and institutions.

(b) Sense of Congress- In order to promote respect for the rule of law and to prevent further human rights violations by state security forces in Zimbabwe , it is the sense of Congress that, until the Secretary of State can certify that Zimbabwe is in full compliance with the Kimberley Process, the President should--

(1) press for Zimbabwe to be suspended from the Kimberley Process diamond certification scheme;

(2) work with Zimbabwe's neighbors as well as with regional organizations to help stop the flow of diamonds mined in Zimbabwe from crossing their shared border; and

(3) seek to identify and prepare sanctions pursuant to Executive Order 13391 on individuals and entities funding efforts to undermine democratic processes and institutions in Zimbabwe through illegal activities involving diamonds.


Oh and by the way, Kimberley Process qualification is now a done deal. Apparently South African KP leader did not find extensive human rights violations in the Marange (or Chiadwa) diamond fields. These reports came from 'NGOs' sponsored by the US government, and were intended to thwart Zimbabwe's entrance onto the diamond market.

So I guess the language in this legislation is already obsolete. I hope it is not pushed through the Senate.

More on how they want to continue economic sanctions against Zimbabwe in Section 10:

SEC. 10. UPDATING AND TIGHTENING OF UNITED STATES TARGETED SANCTIONS RELATING TO ZIMBABWE .

It is the sense of Congress that the Secretary of the Treasury, in close consultation with the Secretary of State and other relevant officials of the United States Government, should regularly review and update targeted sanctions related to Zimbabwe , giving particular attention to--

(1) the ways in which certain entities directly support or fund activities in Zimbabwe that undermine democratic processes and institutions;

(2) the role and functions of certain entities in activities critical to economic recovery in Zimbabwe ; and

(3) how sanctions could be strengthened against those entities that continue to directly support or fund activities that are undermining democratic processes and institutions in Zimbabwe .

 
At 8:07 PM , Blogger MrK said...

SEC. 9. ACTIONS TO STOP ILLEGAL DIAMOND FLOWS.

(a) Findings- Congress makes the following findings:

(1) According to credible human rights organizations, the armed forces of Zimbabwe continue to exert control over diamond mines in the Marange district of eastern Zimbabwe , and have committed horrific abuses against miners and local residents, including extrajudicial killings, beatings, and torture.

(2) A review mission of the Kimberley Process traveled to Zimbabwe from June 30 to July 4, 2009, and documented extensive smuggling of diamonds and abuses against civilians by the police and army forces of the Government of Zimbabwe . The review mission reportedly found there to be `credible indications of significant non-compliance' by the Government of Zimbabwe with the minimum standards of the Kimberley Process.

(3) On December 11, 2009, the United States Senior Advisor to the Permanent Representative of the United States to the 64th Session of the General Assembly stated that the United States has `serious concerns about Zimbabwe's non-compliance with the minimum requirements of the Kimberley Process, particularly relating to smuggling and grave violence in and around the Marange diamond fields'.

(4) The army and police forces of the Government of Zimbabwe continue to serve primarily as instruments of ZANU-PF, and their illegal activities involving diamonds continue to fuel the efforts of ZANU-PF to undermine democratic processes and institutions.

(b) Sense of Congress- In order to promote respect for the rule of law and to prevent further human rights violations by state security forces in Zimbabwe , it is the sense of Congress that, until the Secretary of State can certify that Zimbabwe is in full compliance with the Kimberley Process, the President should--

(1) press for Zimbabwe to be suspended from the Kimberley Process diamond certification scheme;

(2) work with Zimbabwe's neighbors as well as with regional organizations to help stop the flow of diamonds mined in Zimbabwe from crossing their shared border; and

(3) seek to identify and prepare sanctions pursuant to Executive Order 13391 on individuals and entities funding efforts to undermine democratic processes and institutions in Zimbabwe through illegal activities involving diamonds.


Oh and by the way, Kimberley Process qualification is now a done deal. Apparently South African KP leader did not find extensive human rights violations in the Marange (or Chiadwa) diamond fields. These reports came from 'NGOs' sponsored by the US government, and were intended to thwart Zimbabwe's entrance onto the diamond market.

So I guess the language in this legislation is already obsolete. I hope it is not pushed through the Senate.

More on how they want to continue economic sanctions against Zimbabwe in Section 10:

SEC. 10. UPDATING AND TIGHTENING OF UNITED STATES TARGETED SANCTIONS RELATING TO ZIMBABWE .

It is the sense of Congress that the Secretary of the Treasury, in close consultation with the Secretary of State and other relevant officials of the United States Government, should regularly review and update targeted sanctions related to Zimbabwe , giving particular attention to--

(1) the ways in which certain entities directly support or fund activities in Zimbabwe that undermine democratic processes and institutions;

(2) the role and functions of certain entities in activities critical to economic recovery in Zimbabwe ; and

(3) how sanctions could be strengthened against those entities that continue to directly support or fund activities that are undermining democratic processes and institutions in Zimbabwe .

 
At 8:12 PM , Blogger MrK said...

I hope the statement on the Kimberley Process qualification is enough to make this document obsolete.

ZTDERA should be withdrawn.

 
At 8:29 PM , Blogger MrK said...

Here is a little clip from the 1994 documentary The Diamond Empire, on how the diamond industry works through monopoly and artificial scarcity.

 

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