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Eric Bloch Column

Trade sanctions on Zim a myth

YET again, undoubtedly motivated solely in order to deflect blame from the real causes of the Zimbabwean economic morass, the political hierarchy is alleging that Zimbabwe is the victim of unjust, malicious and economically-crippling

trade sanctions.

They repeatedly contend that the European Union and the United States have imposed stringent sanctions which preclude trade and financial interaction with Zimbabwe. They state that not only are there no justifications for such sanctions, but also that those sanctions are a primary cause (if not the only cause) for the myriad of economic ills that beset Zimbabwe. And they amplify upon such contentions by citing, as corroborative examples evidencing the existence of such sanctions, that most, if not all, lines of credit have been withdrawn from Zimbabwe, that balance of payments support is not forthcoming (and hence the immense scarcity of critically required foreign currencies), and that the USA does not accredit Zimbabwe with AGOA status, which accords manufacturers of textiles and clothing elsewhere in Africa with favoured, duty-free access to USA markets.

The claims that Zimbabwe is cruelly, and without foundation, burdened with such sanctions were frequently a theme of the former Minister of Fiction, Fable and Myth, now vehemently opposed to the same government that was the recipient of his vociferous castigation until 1995, and of his total enthusiastic support until the end of 2004. And he ensured that the diverse media then controlled by him regularly restated the claims that Zimbabwe was iniquitously oppressed by trade sanctions, completely undeservedly.

He, and his media, recurrently argued that the supposed trade sanctions were a deliberate strategy of Zimbabwe’s alleged enemies to destroy the Zimbabwean economy in order to bring about the collapse of the government.

Since his departure from the governmental benches in parliament, and from his ministerial post, the media which he had vigorously controlled and manipulated has continued to publish frequent attributions of Zimbabwe’s economic distress to the trade sanctions which they, and government, have so frequently used in the past to divert the attention of the populace from the real causes of that economic distress.

But recently it has been not only the state media that has continued to promote the theory that Zimbabwe’s economic woes are due to trade sanctions. Many of the political “elite”, including the president and several of his ministers, have once again resolved to promote that theory in many of their speeches, including at recent congresses of some economic sectors.

However, the fact is that no country currently applies legislated trade sanctions against Zimbabwe. The only sanctions that exist are the targeted sanctions of the European Union and USA, directed specifically and exclusively at less than 200 leading members of the Zimbabwean government, its ruling party, and certain public servants in high office.

The Presidium, cabinet ministers and deputy ministers, politburo members and various permanent secretaries have been targeted, to the extent that they are barred from travel (other than for purposes of gatherings of the United Nations and associated organisations) to any countries in the European Union, USA and certain (but not all) Commonwealth countries. These persons are also barred from operating bank accounts and holding investments in any of the countries applying the targetted sanctions.

However, none of those countries have applied trade sanctions against Zimbabwe or any of its people, other than the few specifically stated targets. In fact, most of the countries are actively trading with Zimbabwe, supplying products and services to Zimbabwe, and importing goods and commodities from Zimbabwe. Moreover, although the extent thereof has diminished, many of them continue to provide humanitarian aid to Zimbabwe, supporting non-governmental organisations engaged in health-care, education and support for the destitute.

The argument that withdrawal of lines of credit prove the existence of trade sanctions is spurious in the extreme. Virtually no financier, no banker, and no supplier, anywhere in the world, including those in Zimbabwe, is willing to extend credit to those who are proven defaulters in the settlement of debt, or to those who have little or no prospect of timeous settlement of debt and repayment of credit facilities availed to them. To do so is contrary to the fundamental principles of prudent business practice, and that is the sole reason for any lines of credit having been withdrawn. Moreover, despite such withdrawals, there are still some suppliers who are providing credit terms to their Zimbabwean customers.

The same circumstances pertain to the provision of balance of payments support. The principal provider of such support, internationally, is the International Monetary Fund (IMF) and various other international banking entities, most of whom take their lead from the IMF.

Zimbabwe has a very considerable and grossly overdue indebtedness to the IMF, and that entity is precluded, in terms of its constitution, from making advances of any nature to countries whose arrears in debt repayment are such as to exceed prescribed default levels. In fact, so great is Zimbabwe’s default, that its membership of the IMF is suspended, and there have been serious considerations that Zimbabwe’s membership should be terminated.

Hopefully the IMF will continue to show patience with Zimbabwe, in anticipation of transformation, and not take such a drastic action. However, the non-provision of balance of payments support by the IMF is driven by its constitution, and not by any act of imposition of trade sanctions. In turn, bodies such as the World Bank, European Investment Bank, donor states and others, cannot provide balance of payments support, not because any of them are seeking to impose trade sanctions, but because their ruling structures, and the fundamental principles of fiscal prudency and of good and sound corporate governance, so dictate.

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