via Unravelling IMF sanctions myth November 15, 2013 by Zechariah Mushawatu Zimbabwe Independent
Zimbabwe has been unable to access loans from the International Monetary Fund (IMF), World Bank (WB) and the Africa Development Bank (AfDB) for over a decade.
Various schools of thought in Zimbabwe have given different explanations for the country’s inability to access funds. Conflicting accounts of how the sanctions came about have caused confusion in the minds of ordinary citizens prompting me to write in an attempt to demystify the issue of sanctions on Zimbabwe in as far as the IMF and the WB are concerned.
The Reserve Bank of Zimbabwe, in a document titled The Impact of Sanctions Against Zimbabwe attempts, but fails, to explain the real cause of the imposition of sanctions.
According to this document, Zimbabwe’s inability to access loans from the IMF and the WB is as a result of the controversial land reform programme which angered the West and consequently led to punitive measures against the country by institutions controlled by the West.
What is mind-boggling though in this document are the conflicting sentiments. It kicks off by conceding that Zimbabwe is unable to access loans because of its arrears to the IMF and the WB, but later makes a somersault, stating that the refusal by these institutions for Zimbabwe to access loans was in direct reaction to the country’s land reform programme. The document is thus not clear on the real cause of sanctions.
Zanu PF offers a less self-contradictory argument. The party maintains that the failure by Zimbabwe to access these loans is solely as a result of “illegal sanctions” in direct response to the land reform programme which sought to correct colonial land imbalances.
These views from Zanu PF can be found on the party’s website in an article titled Sanctions On Zimbabwe are Real.
In sharp contrast to the above arguments, other Zimbabwean sectors maintain that the country’s inability to access loans from the Bretton Woods institutions is purely as a result of failure to service its debts to these organisations since 1999. One major proponent of this view is leader of the opposition Mavambo/Kusile/Dawn, Simba Makoni.
Before going any further, it is imperative to give a short definition of sanctions and ascertain whether or not the measures the IMF and the WB are carrying out against Zimbabwe can be referred to as such.
Simply defined, sanctions are measures carried out against one party by another in order to make the party under sanctions behave in a way desired by the party implementing the sanctions. Therefore, the measures currently being carried out by the IMF and the WB against Zimbabwe fit the bill of sanctions since they seek to compel Zimbabwe to behave in a certain way.
Having established that the IMF and the WB have imposed sanctions against Zimbabwe, what remains is to interrogate the cause of these sanctions and examine whether they are being carried out solely because of the country’s arrears to the multilateral financial institutions or their implementation is a sinister move that used Zimbabwe’s arrears to the Bretton Woods institutions as a guise to punish the country for carrying out the land reform.
Determining the causes and circumstances leading to the barring of Zimbabwe from accessing the loans is an activity that requires some research which I have carried out.
If one examines the measures used by the IMF and WB in dealing with countries that have arrears, one will find that these institutions have clearly laid out procedures aimed at uniform and standardised remedial actions for defaulting countries. For instance, the WB has procedures in its debt servicing handbook which outline the timeframes under which defaulting of payment will result in sanctions.
When Zimbabwe was barred from accessing IMF loans, it had defaulted on payment for over a year. Similarly, when the WB decided to take measures against Zimbabwe, it had failed to service its loans for over a year. The governing procedures of these institutions allow them to implement measures against countries that have defaulted on debt repayment for such periods as the ones mentioned, hence the sanctions.
It is thus my view that remedial measures by the Bretton Woods institutions, which include the suspension of voting rights and barring of the country from accessing loans and technical assistance, were implemented against Zimbabwe solely as a result of the country’s inability to service its debts.
The claim that IMF and the WB sanctions against Zimbabwe were carried out as a result of the land reform is a myth. There is no evidence to support this claim.
If anything, the fact that Zimbabwe was barred from accessing the loans around the same time the land reform programme was taking place is a mere coincidence that has been milked by some sectors in Zimbabwe for political expedience.
Failure to repay
This well thought-out lie unravels when one digs deeper into the sanctions issue instead of a cursory look.
Those who claim that the sanctions against Zimbabwe are as a result of the land reform agenda would have to answer whether other countries that have had such measures implemented against them because of failure to service their debts, such as Somalia and Sudan, are also being punished because of land reform or similar programmes?
Recently, Argentina was on the brink of being denied access to IMF loans for not disclosing full information to the institution; does that necessarily mean that this country was being punished for some action other than its failure to provide necessary information to the IMF?
The truth of the matter is Zimbabwe was barred from accessing IMF and WB loans because of failure to repay its debt.
If this were not the case and the IMF and WB had not followed procedure in implementing sanctions against our country, we have great legal minds that would have successfully challenged the Bretton Woods institutions through the international legal system.
Mushawatu is a UZ political science and administrative studies graduate.