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By
Tawanda Hondora
IS ZIMBABWE
the subject
of economic sanctions? That was the subject of my
article published on New Zimbabwe.com September 21, 2005. This is
an important question that Zimbabweans need to discuss in the wider
debate over the reasons behind Zimbabwe’s economic crisis.
Nobuhle Nyathi in her response to my article published by New Zimbabwe.com on September 22, 2005 states: “It's Zanu PF not sanctions, stupid!”
Well, ignoring that emotional expletive and others appearing elsewhere in her article, its true: the problem is Zanu PF. However, it is only one of the factors, albeit a very significant factor behind Zimbabwe’s economic crisis. I do not absolve Mugabe and Zanu PF of responsibility over the failing economy. That fact is all too obvious from a dispassionate reading of my article. At the end of the day, being the government in power, the buck must stop with Zanu PF and its leader Robert Mugabe.
It is obvious that Zimbabwe’s economic problems are multi-dimensional, influenced by domestic and foreign factors. We should not delude ourselves into thinking that by simply removing Mugabe and Zanu PF from power, all our economic problems will be solved. And certainly, not all our economic problems stand to be solved through the removal of the economic sanctions, but I argue the removal of both will be a helpful start. Let’s discuss!
Zimbabwe’s economic problems did not start with the introduction of the US Zimbabwe Democracy and Economic Recovery Act, 2001. This is an obvious fact, which is apparent from my earlier article. Zimbabwe’s economy has since 1980 grown in fits and starts, but has on the whole been relatively stable. The economic depreciation since 2000 has been rapid and has been accelerating, but I do not argue that economic depreciation started in the year 2000. I have suggested that one of the significant factors behind the ever accelerating economic decline is the sanctions regime currently in place.
And instead of piling into Mugabe and Zanu PF, as we always do, I proposed that we discuss one other significant factor behind Zimbabwe’s economic crisis: economic sanctions.
Ms. Nyathi’s fire and brimstone fails to address the important issue I raise in my article: are economic sanctions undermining Zimbabwe’s economy? Yes or no? I agree with virtually all the complaints she has against Zanu PF. But is that all that explains Zimbabwe’s economic crisis?
Is Zimbabwe the Subject of Sanctions? Almost everybody will agree that Zimbabwe is currently the subject of international sanctions. The disagreement, depending on one’s persuasion, is whether the sanctions are economic or not.
Sanctions: Economic or Not? I argue that the sanctions currently in place against Zimbabwe are economic in nature.
Ms. Nyathi calls them “smart sanctions,” the US, and EU’s phrase of choice, though perhaps she maybe unaware of just how smart the sanctions are. The sanctions currently in place against Zimbabwe are smart because they are very subtle and indirect, yet devastatingly effective in bringing Zimbabwe’s economy to its knees. It would be interesting to find out just how many Zimbabweans think that the sanctions currently in place are benign as far as Zimbabwe is concerned, and only hurt a few Zanu PF people.
Ms. Nyathi does not engage with the question that I posed, and fails to offer an opinion on whether the US sanctions against Zimbabwe are economic in nature.
| "Ms. Nyathi calls them “smart sanctions,” the US, and EU’s phrase of choice, though perhaps she maybe unaware of just how smart the sanctions are" |
| TAWANDA HONDORA |
Eddie Cross, (of the MDC) presumably writing in his personal capacity, advised me that there are no economic sanctions against Zimbabwe and that my views on the subject are nonsense and unhelpful. He says that there were economic sanctions against Rhodesia, but not against Zimbabwe. I am not surprised by his views, which are not at all at odds with those of his party on the issue. It is important that we discuss the issue.
As I explained in my earlier article, in 2001 the United States of America promulgated a law called the Zimbabwe Democracy and Economic Recovery Act (ZIDERA hereafter). That enactment empowered the US President to instruct US representatives on the multilateral lending agencies – such as the IMF, World Bank and Africa Development Bank, among others – to vote against credit facilities (in all their various forms) to Zimbabwe, until the latter improves its human rights record, observance of the rule of law, holds free and fair elections etc. We know the list, and the accusations against Mugabe and Zanu PF in this regard are not without merit. ZIDERA therefore subtly introduces economic sanctions against Zimbabwe.
The US influence over the IMF, World Bank and Africa Development Bank, among others, is immense because of the size of its shareholding, vote and major donor status, respectively. There are many scholars that have criticised these institutions for being conduits used by the US for its international foreign policy. But I digress.
ZIDERA does not say “we are now imposing economic sanctions against Zimbabwe.” The enactment simply allows the US to prevent Zimbabwe from accessing finance from certain multilateral lending institutions. That’s smart. Brazenly declaring that the US is imposing sanctions on an impoverished developing African nation would be bad public relations. And people will ask questions: why Zimbabwe? Why not the Middle Eastern countries where women are not allowed to vote, where there is no freedom of speech, where there is torture, etc? Why not countries like Pakistan where the current President came to power through a coup? Why not Egypt where presidential elections are predetermined? Why not Uganda where there is no multiparty politics? Why not Ethiopia where elections are rigged, students detained indefinitely, where torture is rife, etc? Why not China, or Libya – the two countries currently doing roaring trade with the US and EU among others, though there is no democracy, or basic human rights observance? I do not for a minute say that because Zimbabwe is no different from other countries there must be no consequences for gross human right violations, election rigging, etc. I do think it is wrong to cause an economic implosion simply to rid Zimbabwe of Mugabe.
It can be argued that what caused the imposition of economic sanctions are Mugabe’s policies of expropriating white farmland, rigging elections and human rights violations. True: but is it right to use economic muscle to blockade Zimbabwe (mark not Mugabe) from the international credit markets as punishment? Who suffers, Mugabe or the people of Zimbabwe, who have struggled to rid themselves of their leader? If that is the current standard, why isn’t half the world the subject of similar “smart sanctions”? Food for thought!
What is the economic
cost of ZIDERA to Zimbabwe?
Have the economic sanctions impacted adversely on Zimbabwe and can the
cost be quantified? I do not have the figures, and I fear, neither does
the hapless Zimbabwe government. But there is an adverse economic cost
and this can be ascertained by analysing the consequences of the US
enactment.
ZIDERA was a significant milestone. From the date of its promulgation, any Zimbabwe foreign currency loan application made to the IMF, World Bank, the Africa Development Bank, among others, stood to be scuttled by the US, directly through its vote, or indirectly through its influence within the institutions. On the international credit markets, with its junk investment status, Zimbabwe became an untouchable, because of its loan defaults and also because of the natural consequences following the promulgation of ZIDERA.
It also meant that any loan application made by Zimbabwe to any multilateral or bilateral international lending agency would carry an exorbitantly high cost, if they were willing to do business at all. This economic cost is quantifiable.
Further, the US position, expressed through ZIDERA meant that Zimbabwe would be unable to reschedule repayments of its debts due to the multilateral lending agencies. Practically speaking, debts became due and payable. And this explains why Zimbabwe paid £120 million to the IMF, and could not reschedule its IMF debt. That is a quantifiable cost.
In addition, again because of US and EU foreign policy, none of Zimbabwe’s international debts have been cancelled, as have those of other countries. It may be argued that Mugabe is to blame. True. But I ask again, is it right to penalise Zimbabweans because of the acts (mostly against Zimbabweans) of Mr. Mugabe?
There have been asset freezes by the EU, and it is reported that the US will also impose an asset freeze in the near future on people or companies associated with ZANU PF. Companies, whether ZANU PF associated or not, contribute to Zimbabwe’s GDP, its economic and industrial development and alleviate unemployment. The economic and social cost to Zimbabwe of these asset freezes is real and can be quantified.
It is on the basis of the above views that I opine that the sanctions regime has had an adverse economic impact on Zimbabwe, and the cost can, and should be quantified.
Others will argue that sanctions have had a negligible economic impact on Zimbabwe because the country was already in arrears with the IMF in particular. It is arguable. However, in the absence of ZIDERA Zimbabwe would have been able to negotiate with the IMF with a view to reschedule or cancel its debt payment, or apply for more finance. I believe that the impact can also be quantified.
On travel sanctions, it is arguable that prohibiting Mugabe, his wife and other ZANU PF members from travelling overseas saves the country much needed foreign currency. Probable; but does prohibiting the Reserve Bank of Zimbabwe Governor from travelling to Australia, New Zealand and other countries to enter into business discussions with Zimbabweans in the Diaspora not have a negative economic impact on Zimbabwe? Let’s discuss.
Zimbabwe’s economic problem is mainly manifested through a critical foreign currency crisis. Only yesterday, Trevor Manuel – South Africa’s Minister of Finance – noted that Zimbabwe required a major injection of capital.
Ms. Nyathi argues
that South Africa stands ready to give Zimbabwe a loan. True. I have
argued elsewhere that both ZANU PF and MDC’s positions on the
South African loan offer are unwise. Zimbabwe needs the money being
offered by South Africa. ZANU PF’s fear that the loan is a Trojan
horse through which the MDC will obtain political power is just another
example of ZANU PF’s paranoia and of how it has failed Zimbabwe.
The MDC’s argument that the loan must contain conditions forcing
ZANU PF to enter into political negotiations, repeal certain legislation,
new elections, etc, is also objectionable, because it elevates its own
political ambitions above the national interest.
To all those that say Mugabe has mismanaged the economy since 1980;
I say you’re right, I agree. I also say that Mugabe has mismanaged
the current economic crisis which has been caused in part, and exacerbated
by the economic sanctions currently in place against Zimbabwe.
Should sanctions be lifted? If lifting sanctions will alleviate famine, the HIV/AIDS crisis, allow Zimbabwe to slowly reintegrate into the global economy once again, boost the economy, however slight; my response would be yes, they must be lifted. Will sanctions be lifted? No, I am under no illusion that they will be lifted until Mugabe leaves office.
I ask, have the economic sanctions achieved their intended goal; of dislodging Mr. Mugabe’s grip from power? Perhaps now is the time to take stock and revaluate the necessity and efficacy of the sanctions.
Lastly, this debate
should be opened up. It should be depersonalised, and I caution against
the use of inflamed rhetoric. We need a sober, introspective debate
on ALL the reasons behind Zimbabwe’s economic crisis, and none
should be beyond consideration.
Tawanda Hondora is a Zimbabwean lawyer. He can be contacted at hondst@yahoo.co.uk
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