HomeOpinion & AnalysisEric Bloch:Self-imposed new sanctions

Eric Bloch:Self-imposed new sanctions

ZIMBABWE’S ranting and raving against allegedly “illegal” international economic sanctions continues unabated. Aided and abetted by the war veterans, the Zanu PF Youth League, the Affirmative Action Group and other radicals, the president and his political colleagues endlessly persist in their contentions that the cause of Zimbabwe’s economic ills, and of the consequential hardships and sufferings of most of the populace, is almost wholly those sanctions.

In so doing, the focus of Zimbabweans from the real causes of Zimbabwe’s immense economic ills has been progressively, most successfully, diverted from the real sources of the devastation that has been wrought upon the economy.
Although often said before, the reality is that those sanctions that have been imposed have had minimal economic consequences. The Zimbabwe Democracy and Economic Recovery Act of the United States imposes only one notional sanction, being the US veto of funding for Zimbabwe by the International Monetary Fund. There is no substance to that sanction, as the IMF is, in any event barred from giving funding to Zimbabwe for so long as the country continues to be in default in servicing debt on past advances, except for occasional grants of special drawing rights. The US legislation does not prohibit trade with, or investment in, or travel to, Zimbabwe. Effectively, therefore, no sanctions have been imposed by the US which have jeopardised the Zimbabwean economy to any significant extent.
Somewhat more far-reaching sanctions are applied by the European Union (EU), for trade with, and funding for, Zimbabwe’s government, its parastatals, and other entities directly or indirectly linked to government. But, as with the US, no constraints have been imposed on Zimbabwean trade, investment or travel. Despite the recurrent, vitriolic and recriminatory contentions of the Zanu PF elements of government, the reality is that sanctions have had very little impact upon the Zimbabwean economy. The only sanctions of substance are of a non-economic nature, being restrictions imposed upon less than 200 politically-active Zimbabweans, who may not travel to the countries imposing the sanctions, may not operate bank accounts or invest in those countries, and cannot send their children there for education.  Undoubtedly it is these personalised sanctions that have fuelled the ire of the politicians, whilst at the same time it is very convenient to them to be able to blame, although without substance, sanctions for the traumatised state of the economy.  It also suits their agenda to claim that the sanctions are illegal, notwithstanding that it is the right of any country to decide who it will not interact with economically.
However, it cannot be denied that the Zimbabwean economy has been decimated by sanctions. The tragedy is that those sanctions are self-imposed. One of the first and foremost sanctions was against white Zimbabwean farmers.  Instead of addressing very necessary land reform constructively (and equitably), Zimbabwe legislated grossly discriminatory land policies, and implemented them in a manner that very rapidly emaciated the previously virile agricultural sector, which for many decades had been the foundation of the economy. It compounded those sanctions by blatant disregard for the fundamental principles of justice and of international law, and further compounded them by contemptuous breach of numerous Bilateral Investment Promotion and Protection Agreements.
As disastrous as that self-imposed sanction proved to be, it did not suffice to satisfy the government’s determination to regulate and control the declining economy ever more intensively, notwithstanding that in doing so it was achieving naught but to accelerate the decline. 
The regulations, and the controls that they constituted, were naught but further economic sanctions. They ranged from excessive labour legislation, undermining industrial productivity and viability, to two years of devastatingly disastrous price controls which exacerbated product shortages, and fuelled a virile black market. They included vastly excessive direct and indirect taxes (amongst the world’s highest), further undermining the economy and intensifying the survival traumas of formal sector enterprises, of their employees, and of the populace at large. Of course, as these economic “sanctions”, created by those charged with furthering the nation’s wellbeing, intensified the economy’s collapse, those who created the sanctions more and more determinedly sought to disclaim culpability. They attributed all the ills to alleged diabolical stratagems of the international community in general, and especially those of the former colonial powers and their allies. In order to give apparent credibility to these specious contentions, they placed especial emphasis upon the so-called “illegal” sanctions, despite their virtual non-existence.
So great was the political resolve to ascribe all fault for the never-ending contraction of the economy to others, and thereby to delude the populace to believe that the politicians were guiltless, coupled with an equally great, paranoic hatred for the colonialists of old, that the craving to impose evermore sanctions became more and more pronounced.  With Machiavellian cunning, they devised a further sanction par excellence.

 

Recognising the very real need for indigenisation and economic empowerment as a just and necessary action to advance Zimbabweans and activate them in the economy, it resolved to legislate to bring that into being.

 

But, in order to exact revenge upon all non-indigenous Zimbabweans that their hatred of those non-indigenous sought, they legislated in such a manner as to only destroy the economy yet further and to hinder and reverse what had been a slowly developing potential of economic recovery.

They cavalierly disregarded and dismissed all reasoned and rational advice from the existing business community, from intending foreign and domestic investors, from many of the international community, and others.

 

Not only had they legislated destructively, instead of pursuing indigenisation and economic empowerment that would be nationally beneficial and an enhancement of wellbeing for many Zimbabweans, but they have dogmatically refused to heed good and sound, unbiased advice.

 

Those advice, if reacted to positively, would ensure successful attainment of substantive indigenisation, and of wideranging economic empowerment.

Instead, since  February 12, when the regulations were gazetted, the economy has contracted, business confidence decimated, and potential investors almost wholly alienated, concurrently with critically-needed international lines of credit being withheld.

 

Hundreds of intending investors have lost interest in Zimbabwe as an investment destination.  An intending German trade mission, due to have visited Zimbabwe this month, has cancelled the visit (as have several other similar missions from several EU countries). In a nutshell, government has self-imposed yet another devastating sanction upon Zimbabwe.

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