Do Western Sanctions Really Hurt Zimbabwe’s Economy

A group of southern African dignitaries has given its stamp of approval to Zimbabwe’s recently re-elected President Robert Mugabe. At an annual summit on Sunday, an influential regional bloc called the Southern African Development Group, or SADC, appointed Mugabe its new deputy chairperson, commended him for a peaceful re-election and called for Western powers to reconsider their sanctions against his administration.

Mugabe will be re-inaugurated this week following his disputed July 31 electoral triumph. Zimbabwe has had no other leader since it gained independence from white rule in 1980; after 33 years in power, the president and his party, the Zimbabwe African National Union-Patriotic Front, or ZANU-PF, maintain strict control over the national economy, politics and media.

Mugabe claimed a high margin of victory over his longtime rival Morgan Tsvangirai, whose Movement for Democratic Change, or MDC, has participated in a unity government with ZANU-PF since the last national election in 2008. That poll also pitted Tsvangirai against Mugabe, but the proceedings erupted into violence after an early survey showed the MDC in the lead. More than two hundred people died, and the SADC stepped in to help broker the power-sharing agreement. Since then, Zimbabwe’s economy has regained some stability after years of runaway inflation and upheaval. But Tsvangirai and other MDC members were often targeted by forces loyal to ZANU-PF; they have suffered political roadblocks, personal harassment and even violent attacks over the past five years.

July’s election was peaceful, but opposition members hotly contested the results. Tsvangirai filed an electoral petition but withdrew it this week, explaining that a fair hearing would be unlikely. That leaves Mugabe to resume his post once again, and the SADC hopes that the election results will herald a re-evaluation of the West’s approach to the ZANU-PF regime. “I believe Zimbabwe deserves better, Zimbabweans have suffered enough,” said Malawian President Joyce Banda, the incoming chair of the SADC, according to AFP.

Zimbabwe’s population of 13 million has indeed suffered. Poverty and unemployment are high, while infrastructure is sorely lacking. Diseases like HIV/AIDS, typhoid and malaria give the country an average life expectancy of 53-55 years — among the world’s lowest. The country is rich in minerals, but this has not been translated into sustainable economic growth nor prosperity for its people.

ZANU-PF officials point to Western sanctions as a major reason for these ills, but Westerners charge that corruption and mismanagement are to blame. Indeed, the outgoing Finance Minister Tendai Biti, who belongs to the MDC, told Al Jazeera in an interview last month that the ruling party was largely responsible for Zimbabwe’s economic woes. “Let’s take inflation – this is not caused by external intervention … Economic management and mismanagement has everything to do with the self-induced policy distortions, and ZANU-PF is the [grandmaster] of self-induced policy madness and macro-economic insanity,” he said.

The United States asserts on the website of its embassy in Zimbabwe’s capital Harare that “U.S. sanctions are not blocking Zimbabwe’s economic recovery,” and that its policy specifically targets “individuals and entities that have undermined democratic processes or institutions in Zimbabwe.”

American sanctions against Zimbabwe were first instituted in 2003. They came in response to disastrous fiscal mismanagement, most notably the land reform program that Mugabe began to implement with new zeal at the turn of the millennium. The program saw thousands of white farmers forced off their homesteads, often violently, which only exacerbated racial tensions and did nothing to spur development in a country where more than half the population still lives in poverty. These problems were only compounded over the years by skyrocketing inflation that imperiled the livelihoods of millions of people.

Then-President George W. Bush signed a presidential order listing 77 individuals who were prohibited from conducting business with American citizens, and whose assets abroad would be frozen or blocked by the United States. The list was expanded in 2005 to include 33 entities and 128 more people. But contrary to popular belief, the restrictions do not prohibit general trade or humanitarian assistance funding. Just last year, the United States was Zimbabwe’s 11th largest trade partner with about $110 million in bilateral exchanges.

The European Union has had similar sanctions in place against Zimbabwe; assets of selected officials and institutions are frozen, but trade continues. The EU was Zimbabwe’s third-largest trade partner last year, with $875 million in total exchanges. (Zimbabwe’s top two trade partners are South Africa and China.) Hundreds of millions of dollars in aid money from all around the world — led by the United States and the European Union — is also still flowing into Zimbabwe, though funding has dropped in recent years due to the stabilization of the country’s economy and recessions in donor countries.

But concerns about corruption and poor governance keep both aid and trade lower than what they could be — and they have also impeded the flow of foreign direct investment. Zimbabwean authorities announced earlier this year that 2012 FDI amounted to $400 million, up from $387 million the year before. Despite this positive upward trend, those figures are quite small considering the country’s dire need of funds. It doesn’t help that Zimbabwe consistently ranks among the worst countries on earth in terms of transparency and ease of doing business.

Improvements in the Zimbabwean economy under the unity government have prompted some easing of restrictions; this year, shortly after Zimbabwe held a referendum and passed a new constitution limiting Mugabe’s powers, the United States removed two Zimbabwean development banks, eight people and one farm from its sanction list. The European Union removed 81 people and eight other entities from its list. Decisions like these are meant to reward and encourage positive steps for growth; removing people and entities one by one gives the Western world an ongoing bit of leverage and influence in Harare.

For that reason, a full removal of sanctions isn’t in the cards yet. Free and fair elections would be a necessary prerequisite for Western power players to bring all of Zimbabwe’s officials and institutions back into the fold, but most observers maintain that this last round of voting was marred by irregularities.

For the time being, President Mugabe will continue to point to sanctions as the primary cause of Zimbabwe’s economic woes — in that way, sanctions give him a rhetorical edge that helps the aging leader curry favor with voters after 33 years of failed leadership. But even as SADC authorities call for an end to restrictive policies from the West, Zimbabwe will have to achieve new levels of domestic political and economic liberalization before global superpowers even begin to reconsider their approach.

COMMENTS

WORDPRESS: 10
  • comment-avatar
    Murairwa 7 years ago

    Why do you think the West hates R. G. Mugabe. Please read for yourselves. This article was not written by a ZANU-PF member. Shame on those who advocate for regime change. So Tsvangirai reverses land empowerment. So world powers grab your land makatarisa. Wonai Linda na Bill Gates vakatopinda kare muZimbabwe and in SADC. Nyaraiwo.

    The other side of the coin
    August 20, 2013 Wenceslaus Murape Opinion & Analysis
    Udo Froese The global north is unable to feed itself. This explains the “land acquisition” (sounds better than land grab) for food crops in Africa. The UN body, the ‘Food and Agricultural Organisation’ (FAO) published a report on this trend in December 2009.The writer/researcher, Thembi Mutch from Dar es Salaam, Tanzania, documented in the London…

    Udo Froese
    The global north is unable to feed itself. This explains the “land acquisition” (sounds better than land grab) for food crops in Africa. The UN body, the ‘Food and Agricultural Organisation’ (FAO) published a report on this trend in December 2009.The writer/researcher, Thembi Mutch from Dar es Salaam, Tanzania, documented in the London based news magazine, NewAfrican, “Rural land grabs in sub-Saharan Africa force peasant farmers into ghettos in cities where jobs are scarce — which will only contribute to further food shortages and crisis in the future.”

    Such ruthless foreign land grabs cause imminent abject poverty and starvation of continental proportions.
    Mutch observes further, “In many African countries there are no mechanisms to monitor land appropriation. Although there are public protectors, an auditor general, anti-corruption units and other controlling mechanisms in place, it is easy to bypass them: they monitor only government and donor money, not private investment.”

    It means, the purchase of land in sub-Saharan Africa will not end. This will lead to further disenfranchisement of already disadvantaged indigenous Africans in their own land on their own continent. They remain hopeless, starving third-class citizens.

    In her article on “land grabbing” in Africa in NewAfrican, Mutch writes, “A whole new industry has sprung up, including commodities and futures trading on African land and water rights, and with it, there has been a concomitant rise in investment firms, many based in the UK, who actively promote partnerships between private companies and brokers based in sub-Saharan Africa.”

    “The British firm, Silverstreet Capital, boasts about its ability to buy up African farms and ‘boost productivity’ by, among other things, abandoning ‘till’ farming — i.e., farming by hand. Smallholding African farmers are at the bottom of the pile. Land acquisition is attracting new players. For example, the Rockefeller/Gates Foundation/USAID partnership is working with Monsanto — US$150 million will be invested by them into an ‘Alliance for a Green Revolution in Africa’ (AGRA) project,” Mutch explains.

    Global land grabbers of huge tracts of African soil include the likes of US, British and European billionaires, the Saudi Arabian government and the Sultan of Brunei for their private use only and without access for the local population. They do not carry Africa’s interests. Those well-heeled foreigners arrange themselves through their elites on the ground.

    They receive tax breaks and exemptions, repatriations of profits, additional free land and water concessions.
    As Mutch documents in her research, “The issue is not necessarily the purchasing. It is the levels of secrecy, the lack of templates or agencies monitoring how the (indigenous) people who already live on the land, will be dealt with.”

    It gets worse. “Numerous ‘pioneering’ Dutch and Swedish farmers are keen to use areas in Mozambique, Tanzania, Zambia and Uganda for biofuels experimentation. The needs of smallholders are sidelined. They are viewed only as potential cultivators for an industry that is still trying out seeds, growing methods and approaches,” as observed by Thembi Mutch.

    The above documented research should be one of the priorities of the African Union (AU), Ecowas and the Southern African Development Community (Sadc) in order to stem the resultant high unemployment, abject poverty, starvation and the destabilisation of a whole continent.

    Farayi Nziramasanga in Harare, Zimbabwe, summed up the actions of the new breed of African leadership writing in NewAfrican, “Over the past couple of decades, nationalist leadership with a pan-African, perspective has been replaced by ‘new democrats’ supported by the (international) West.

    These donor-funded client-leaders have a local focus and dare not annoy their funders. They owe their elevation and sustenance to foreign interests, who in turn dictate policy.”

    Addressing the role of the AU, Nziramasanga, writes, “Our power as a continent lies in us being able to speak with one voice and act in unison on issues of (African) continental interest. And, Nigeria and South Africa have to shed the illusion of continental giants — they are not and never will be.”

    It is important for Africa to understand its position and the foreign interests, the real role, for example, of the US’s continental Africa Command (Africom) and its proxies. This should also mean, the role of South Africa’s former cabinet minister, Dr Nkosazana Dlamini-Zuma occupying the chair of the African Union, is to understand and accept it as her primary task “to pull the Africa-wide power into a continental force for the advancement of Africa-wide interests.”

    Leaders, who secretly sell the birthright of their supporters for a bowl of soup, commit the serious crime of high treason and should be held accountable by the structures of their countries, their regions and finally, the AU. Africa should view the outsourcing of its land as a criminal offense.

    “Western capitalism arose through strong government for the economy and for accessing the resources in the global South (which continuous to this day),” are the final words of Mutch.

    Forget the European ICC in the Netherlands. Cut ties with it. Africa has no option, but to re-establish itself, its land, its wealth and its own souvereign courts.

    Udo W. Froese is an independent political and socio-economic analyst and columnist based in Johannesburg, South Africa.

  • comment-avatar
    jongwe power 7 years ago

    Does telling a bunch of politicians where they can’t do their shopping trips and holidays really hurt a country’s economy?

  • comment-avatar
    Sam Wales 7 years ago

    http://www.globalresearch.ca/understanding-the-crisis-in-zimbabwe/11548

    “The Mugabe government blames all of its problems on the economic war launched by the USA and Britain. For the Mugabe regime, at the core of this economic war, are the targeted sanctions against Mugabe’s top lieutenants under its Zimbabwe Democracy and Economic Recovery Act (ZDERA), passed by the Bush administration in 2001.” [6]

    Campbell confuses targeted sanctions aimed at senior members of the Mugabe government, with ZDERA, an act which blocks Zimbabwe’s access to international credit, and, therefore, affects all Zimbabweans, not just Zanu-PF grandees. According to the act,

    The Secretary of the Treasury shall instruct the United States executive director to each international financial institution to oppose and vote against–

    (1) any extension by the respective institution of any loan, credit, or guarantee to the Government of Zimbabwe; or

    (2) any cancellation or reduction of indebtedness owed by the Government of Zimbabwe to the United States or any international financial institution.” [7]

    Zimbabwe’s economy, like that of any other Third World country, was never robust to begin with, and inasmuch as it has always relied heavily on Western inputs and access to Western exports, was never too difficult to push into crisis by Western governments intent on making a point. To pretend Washington, London and Brussels haven’t sought to sabotage Zimbabwe’s economy, or are incapable of it, is absurd. ZDERA effectively reduces Zimbabwe’s access to the foreign exchange it needs to import necessities from abroad, including chemicals to treat drinking water, a significant point in the recent cholera outbreak. Development aid from the World Bank is also cut off, denying the country access to funds to build and repair the infrastructure needed to run a modern economy. Rather than banning the export of goods to Zimbabwe (the popular understanding of sanctions), the US has made importing goods a challenge. This doesn’t mean that Zimbabwe can’t import goods, or that there is no outside investment. What it does mean, however, is that Zimbabwe is denied access to the kind of financial support poor countries depend on to get by. The intended effect is to make Zimbabwe’s economy scream, and it has. Campbell, who, based on his equating ZDERA with targeted sanctions on individuals, doesn’t understand it, or hasn’t read it, dismisses the idea that the West’s economic warfare accounts for Zimbabwe’s economic troubles. He writes that,

    “What has been clear from the hundreds of millions of dollars of investments by British, Chinese, Malaysian, South African and other capitalists in the Zimbabwe economy since 2003 is that the problems in Zimbabwe haven’t been caused by an economic war against the country.” [8]

    This is like saying anyone exposed to an influenza virus couldn’t possibly be ill because he has received mega-doses of vitamins. Investment from non-Western sources may mitigate some of the problems created by ZDERA, but it doesn’t eliminate them. Chinese investment in platinum mines, for example, will not eliminate a balance of payment problem.

    Understating the effects of ZDERA is not the only area in which progressive scholars go wrong; their failure to acknowledge Western efforts to build up a civil society with a mandate to destabilize Zimbabwe is another. This is inexcusable, since the efforts of Western governments to create, nurture, support, direct, and mentor opposition to the Mugabe government, including overthrow movements, is well documented [9] – mainly because these governments have been open about it — and is hardly new. It has been used elsewhere, famously in Chile, and recently in Venezuela, Belarus, and the former Yugoslavia.

    One reason for the failure of progressive scholars to acknowledge the role played by Western governments and ruling class foundations in destabilizing Zimbabwe may be because they too benefit from the same sources of funding. Campbell’s critique of Mamdani, for example, was published at Pambazuka News. Pambazuka News is a project of the US ruling class Ford Foundation [10], a vehicle to promote color-coded revolutions, in countries whose governments have been less than open to Western exports and investments. Pambazuka News is also sponsored by Fahamu [11]. While Fahamu no longer lists Western governments as funders, it has, in the past, been funded by the US State Department through USAID, by the British Parliament through the Westminster Foundation for Democracy, by the British government through the British Foreign and Commonwealth Office and the British Department of International Development, and by the European Union. The US, Britain and EU are on record as seeking the overthrow of the Mugabe government. They fund the organizations that disseminate anti-Mugabe analyses and sloganeering. They do so with one aim: to overthrow the Mugabe government. Campbell’s protesting that he is opposed to imperialist interventions is a bit like buying crack on the street while professing opposition to drug dealing, or placing a Think Green sticker on the bumper of your new SUV. Similarly, progressive scholar Patrick Bond, whose anti-Mugabe diatribes can also be found at Pambazuka News, describes the overthrow movement Sokwanele as an independent left, seemingly unaware it is on the US government payroll. [12]

    Not only do progressive scholars ignore the links of Zimbabwe’s opposition to imperialist governments and foundations, they celebrate the opposition. Campbell refers to members of Women of Zimbabwe Arise (WOZA) as “brave fighters.” [13] Brave fighters they may be, but Campbell does not let on (or know) what Woza is fighting for. The group’s leader, Jenni Williams, won the US State Department’s 2007 International Woman of Courage Award for Africa, a plaudit presented to Williams by Condoleezza Rice in a March, 2007 ceremony in Washington. [14] It shouldn’t have to be pointed out that the US State Department’s priority is to secure the interests of US corporations and banks abroad, not the interests of the women of Zimbabwe. So why is the US State Department recognizing Williams? Not for her service to women’s rights, but because her activities help to destabilize Zimbabwe and bring closer the day the black nationalist program of the Mugabe government can be swept aside to clear the way for the unfettered pursuit of US corporate and banking interests. A US government report on the activities in 2007 of its mission to Zimbabwe reveals that the “US Government continued its assistance to Women of Zimbabwe Arise.” [15] US government assistance to Woza and other civil society organizations is channelled through Freedom House and PACT. Freedom House is interlocked with the CIA and is a “virtual propaganda arm of the (US) government and international right wing,” according to Noam Chomsky and Edward Herman. [16] It is headed by Peter Ackerman. Ackerman runs the International Center on Nonviolent Conflict, of which Stephen Zunes, another progressive scholar, is chair of the board of academic advisors. Ackerman’s wife, Joanne Leedom-Ackerman, is a former director of the Albert Einstein Institute, an organization which trained activists in popular insurrection techniques to overthrow Venezuela’s Bolivarian Revolution, and has consulted with members of Zimbabwe’s civil society opposition on how to use non-violence to overthrow the Mugabe government. [17] Woza supports two US State Department propaganda vehicles: SW Radio Africa, a US State Department funded short-wave radio station that beams anti-Mugabe propaganda into Zimbabwe, and the Voice of America’s Studio 7, also funded by the US State Department to broadcast US foreign policy positions into Zimbabwe. [18] Zunes says Woza can by no means be considered American agents [19], echoing the progressive scholars’ line that there are no Western efforts to overthrow the Mugabe government; it’s all part of the anti-imperialist rhetoric Mugabe uses to stay in power

    http://www.globalresearch.ca/zimbabwe-us-supported-opposition-defeated-zanu-pf-wins-in-landslide-victory/5345173

  • comment-avatar
    eztechplc 7 years ago

    Sanctions per se are pretty useless. I use the Rhodesian scenario as an example. Ian Smith declared himself independent from Britain, was imposed with full fledged international sanctions in 1965. He did not even bother. With the said sanctions in place, he managed to fight the liberation struggles from so many fronts…..some from Mozambique, some from Bots and Namibia as well as Zambia in the form of Zipra forces, some fighting in Zimbabwe in the form of ordinary Zimbabwean striking, acts of Sabottage but ALL THESE EFFORTS DID NOT WIN ZIMBABWE.

    These Zipra and Zanla forces were fully trained and fully backed by powerfull countries like Russia, China etc. They had all the food supplies they wanted from ordinary Zimbabweans since they were self imposed kings over them, grabbing their goats, cows, chickens etc (i remember them saying gandanga haridyi derere) meaning they needed special form, and they demanded it.

    I am thinking these could also be the very first people to bring HIV and many other diseases as they lived with these disease in the bushes without seeking cure. These big brothers literally had everything including the young women who they could willy nilly take for wives, anyone voicing concern got slagthered.

    Ironically, the zipra and zinlas with all these resources could not overcome Smith who was placed on 100% sanctions (by Britain) until the British realised it too…..hence they sought to negotiate. Zimbabwe is a product of Lancaster house negotiations. THE FIGHT BY THE “BIG BROTHERS”FAILED. SANCTIONS BY COMMONWEALTH AND MANY OTHER COUNTRIES FAILED. ACTS OF SABBOTTAGE AND STRIKES FAILED

    THE CONCLUSION IS SANCTIONS WERE NOT AND SHALL NEVER BE A REMEDY TO ZIMBABWE CRISIS.

  • comment-avatar

    There is a very simple solution to Zimbabwes ‘sanctions’ crisis.
    Internationally organised and monitored elections. Allow all Zimbabweans of voting age to participate, including the disenfranchised young urbanites and the Diaspora. Let the people of Zimbabwe decide who’s policies they would like to persue in elections organised by a neutral organisation. This is all we want. Let the people of Zimbabwe use their collective wisdom to make the decision of who leads them. If ZANU is so sure of the popularity of their policies (and they should be considering their last showing) then they should walk it again and form a Zimbabwean government recognised by the entire world as duly elected by her people. Sanctions gone!

  • comment-avatar

    There’s a lot of hot air being spread around this topic, but to answer the question posed by the title of this article, the answer is, “NO.”

    ZIDERA has zero effect on Zimbabwe’s economy because it only relates to future action by the US representatives to the World Bank and the IMF to vote against giving Zimbabwe more credit. The reason I say future action is because 10 years after ZIDERA became law the Americans have still not yet had an opportunity to cast a vote at either institution regarding Zimbabwe. Up until now the reason that Zimbabwe has not gotten any money from either institution is because the country has not kept current with it’s existing debts. Banks do not lend more money to entities that do not pay their bills.

    Those who continue to cry about how the US and EU are keeping Zimbabwe away from credit are simply misinformed, or are genuine propagandists spreading lies and falsehoods guaranteed to cause confusion and despondency.

  • comment-avatar
    OMAR IBRAHIM MOHAMED 7 years ago

    I wish to say my brilliant idea over the west who always pursuit and chase Robert Gebriel Mugabe, can Mugabe intervene Europian countries when they have election or anything else, do you think he can, the west countries are jealous the development of Africa and the hero of freedom Mr. Mugabe, whether they chase or not Africa has already progressed believe or not; what we think about is not to waste our time with the west’s words or wrong statement over Africa, so Africa is sufficient in any walk of life and that is Allah’s endowment.

    Thanks in advance

    UMAARI

    Cell: +254 712165070