Chinese deals pie in the sky

via Chinese deals pie in the sky – The Zimbabwe Independent 5 September 2014 by Owen Gagare

WHILE significant investment deals, worth about US$4 billion on paper, were signed during President Robert Mugabe’s visit to China last week, members of the president’s delegation to Beijing say most of them are just pie in the sky as they may not be implemented due to viability problems.

Officials who briefed the Zimbabwe Independent this week after Mugabe’s return say there is nothing to celebrate from the trip as the agreements are speculative and would depend on whether bankable projects would be initiated from Harare or not.

“By and large it was a good trip, as we signed a number of agreements which can help Zimbabwe move forward mainly in the energy, infrastructure and transport sectors, but the reality is also that these agreements depend on the viability of proposed projects,” a minister who was part of Mugabe’s delegation said this week. “In other words, we got promises of development projects, not money.”

Mugabe was reportedly only given a paltry US$24 million in cash which won’t change anything. Chinese, as a practice, give visiting leaders such “pocket money”, the official said.
This comes as Mugabe has been trying to cheer up the nation after his return from China, although he has failed to give concrete details of his agreements and deals.

Mugabe was yesterday in Kariba, after briefing cabinet and the Zanu PF politburo about this trip this week, to launch the Kariba South Power Station extension project. The project, set to be completed in 2017, is expected to cost about US$533 million, of which China Export-Import Bank, which has funded several local developments, will provide US$320 million.

After launching the project, Mugabe took the populist route to address thousands of locals, including his Zanu PF party supporters at Nyamhunga Stadium in the underdeveloped town where he briefed them on his visit to China to give the impression his trip was an economic game-changer.

However, another official who accompanied Mugabe to Beijing, said yesterday what was not said from the trip was that
the Chinese were sceptical about Zimbabwe’s path and were thus behind the scenes gravely concerned about a number of things, including the country’s low credit rating and political risk. The Chinese were also worried, the official said, about Mugabe’s age and instability within the ruling Zanu PF, factors which contribute to complications businesses and government may face as a result of any political changes that may destabilise the country and operating environment.

Although the government has been celebrating the signing of the Memorandums of Understanding, officials say only when the projects are found to be viable after the feasibility studies would funds be released.

Finance minister Patrick Chinamasa, who played a critical role in negotiating with the Chinese deals, confirmed in parliament on Wednesday that the Chinese would only fund bankable projects, although he did not want to give MPs details.

“What we have been able to achieve was serious engagement with the Chinese authorities. We got a commitment from the highest authority to fund bankable and viable projects,” said Chinamasa.
“China does not give budgetary support to any country. It is interested in giving infrastructural support. We came back with commitment that they are prepared to fund bankable projects.”

Vice-President Joice Mujuru signed a series of deals with China in 2006, but none of those materialised. However, trade between China and Zimbabwe has been growing, while China has funded several projects and given Harare soft loans.