TRALAC - Trade Law Centre

Zimbabwe:

Friday, 23 January 2009

Source: Zimbabwe Independent

It is incontrovertible that the Zimbabwean economy has been gravely shattered, and reduced to such appallingly low levels that millions are starving, cholera exists more widely than do basic food supplies.

Much of the infrastructure (including electricity generation, water supply, telecommunications, health care services and education) verges on the edge of total collapse, and hyperinflation is higher than in any country throughout history.

Swiftly, and in deliberate and blatant disregard for realities, government has sought to distance itself from any responsibility for the economic collapse.

It has consistently ascribed the decimation of the economy, and the consequential intense hardships and suffering sustained by the populace, to causes wholly unrelated to government.

To a limited extent it sought, in some of the past 11 years, to attribute the economic ills upon climatic conditions, albeit that on most occasions such contentions were almost devoid of credibility.

However, the most predominant of government’s allegations as to the causes of the impoverished economy, endlessly repeated, is that the Zimbabwean economy has been brought to its knees by “illegal international sanctions”.

Although almost wholly devoid of substance until 2008, government has been vigorously adamant that the alleged sanctions were the cause, almost in entirety, of the economic destruction suffered by Zimbabwe.

As nauseatingly frequent as government has striven to convince all that this was the cause of the morass that constitutes Zimbabwe’s “economy”, so this column has sought to refute those contentions.

At the risk of even greater nauseating repetition, it must be stated once again that government’s claims were almost without foundation until recently, and even now are only partially sound.

Save and except for the provisions of the Zimbabwe Democracy and Recovery Act in the US, which prescribes that that country shall veto any funding support for Zimbabwe by the Bretton Woods’ institutions (the World Bank and the International Monetary Fund), and that the US has not extended to Zimbabwe participation in the benefits of the Africa Growth and Opportunities Act (Agoa), absolutely no economic sanctions applied against Zimbabwe until February 2008, and yet the Zimbabwean economy was in continuous decline since 1998!

Government counters the arguments that economic sanctions did not exist by continuously focusing upon the diminishing provision of aid and of loan funds and lines of credit by donor nations, international financial institutions and private sector enterprises.

But the hard fact is that none will lend to poor credit risks, and Zimbabwe had indisputably become such a risk. It had recurrently defaulted in timeous debt settlement, had an increasing balance of payments deficit, and an ever-contracting economy.

No bankers, lenders or other suppliers make advances if there is little reasonable expectation of settlement being forthcoming. That is not sanctions, but good and sound business practice.

Moreover, an unwillingness to provide loans, lines of credit or aid can in no manner be credibly contended to be “illegal”, although Zimbabwe’s government never makes reference to sanctions without that adjoining adjective.

It is for each country to decide whom it is willing to assist and support, and for each bank, financier and business to decide whom it will trade with.

Decisions not to assist, support or trade do not have to be made by the Untied Nations, or by any other body, and the absence of any such decision neither constitutes the refusals of aid or trade to be sanctions, or that those decisions are illegal.

But government persists in its contentions of illegal sanctions, thereby misleading the populace and intensifying its alienation of the international community in general, and of possible providers of assistance, potential investors and others, thereby further worsening the state of the economy.

However, even if sanctions had previously existed, and recognising that some countries have now resorted to economic sanctions against Zimbabwe (primarily being the US and the countries comprising the European Union), government should desist from its constant endeavours to exonerate itself, and instead should seek to minimise the consequences of those sanctions.

This it can do in several ways. First and foremost would be to seek the termination of those sanctions. Without in any manner surrendering Zimbabwean sovereignty, government should interact constructively with the countries applying sanctions, pursuing reconciliation without subjugation.

In particular, government must intensively restore democracy, respect for human and property rights and maintenance of law and order, with just and humane operations of the police and armed forces.

Not only is it in any event incumbent upon government to do so in fulfilment of its constitutional obligations, but it would significantly restore Zimbabwe’s international relationships.

However, pending the withdrawal of sanctions, government must facilitate the survival of the economy.

As greatly as most people will justly condemn much that the Rhodesian Front government of the UDI period espoused, nevertheless the economy very substantially circumvented many of the hindrances and constraints of the UN-imposed, very comprehensive international sanctions that prevailed throughout 1966–1979.

So too did Israel for years under the yoke of sanctions of Arab states and others supporting them, Iraq under Saddam Hussein, Libya for many years, and others. But what has the Zimbabwean government done to assist the economy’s survival under sanctions? — Absolutely nothing!

In addition, government could energetically pursue the strengthening of economic linkages with those countries that are not applying sanctions against Zimbabwe, and who could be interested in intensified economic ties with Zimbabwe.

To date government’s efforts in this regard have been limited to its “Look East Policy”, with comparatively limited positive results.

It is time — nay, it is long overdue — for the Zimbabwean government to recognise that it must resort to less talk (especially the fruitless, false, perpetually vituperative castigation of other countries, and the repudiation of self-blame), and instead must resort to meaningful action.

By Eric Bloch