Zimbabwe's 'time is coming'
One of President Robert Mugabe's most successful recent propaganda campaigns is that "sanctions" are responsible for the pitiful state of the economy.
He and his colleagues call the sanctions "illegal" without explaining which country’s laws were broken when the EU and US first decided to punish those it believes are responsible for extreme political violence, disappearance of the rule of law and massive looting of public resources.
Every shortage, every dry water tap or every child which goes hungry is blamed on EU and US "sanctions".
Mugabe’s shrill "sanctions" campaign has persuaded some, even loyal supporters of the Movement for Democratic Change (MDC), that these sanctions have in some way destroyed their lives.
Prime Minister Morgan Tsvangirai is repeatedly blamed for imposition of sanctions. But he had nothing to do with the events that triggered the sanctions.
Political violence and land invasions started after Mugabe lost a referendum to the MDC in 2000. The violence roared ahead during the general election in June that year and continued for the next seven years.
The US moved first.
But it took until December 2001 for Senator Bill Frist to steer a US law, the Zimbabwe Democracy and Economic Recovery Act (Zdera), through Congress.
It instructs all US citizens on boards of multilateral lending institutions to oppose any lines of credit or support to Zimbabwe until the president has been able to certify that certain conditions pertaining to the rule of law, democratic elections and legal and transparent land reform have been met.
But at the time of Zdera’s passage, Zimbabwe was already ineligible to receive loans from the IMF and the World Bank’s International Development Association anyway because it was in arrears to those institutions for debt payments.
After it had defaulted to the IMF, few international financial institutions wanted to lend to or invest in Mugabe’s administration, Zdera or no Zdera.
After a visit to the country in March 2009, the IMF noted positive steps toward fiscal discipline under the unity government and offered to provide further policy advice.
But it also warned that IMF funding would not be renewed until Zimbabwe begins to repay its debts.
The initial sanctions, imposed in 2003, ban travel to the United States by "senior members of the government of Robert Mugabe and others… who formulate, implement, or benefit from policies that undermine or injure Zimbabwe’s democratic institutions or impede the transition to a multi-party democracy".
In 2003, President George Bush also issued an executive order freezing assets held in the United States by 75 Zimbabwe officials and President Mugabe’s wife, Grace.
Nine companies and commercial farms were added in 2004 and the list was further expanded in November 2005.
Bush added additional names to the list in 2007 and 2008 and President Barack Obama renewed the sanctions on March 3, 2009.
The EU also acted against Mugabe’s government, imposing targeted sanctions on 19 members of Zimbabwe’s elite and their spouses after pulling the EU presidential election observer team out of Zimbabwe in February 2002, mainly because of the political violence.
These "light" sanctions were upgraded by the EU to target 35 Zimbabwean leaders and have been renewed yearly.
Current EU sanctions include a travel ban on over 160 members and beneficiaries of the Zanu-PF, an arms embargo and an asset freeze.
In 2002, the British Parliament imposed its own targeted sanctions on leading members and affiliates of the Zanu-PF regime, as well an arms embargo and an asset freeze. The UK has imposed travel bans on over 100 members of Zanu-PF and close affiliates of the party.
From September 2002, Australia has implemented targeted autonomous sanctions against listed Zanu-PF leaders and their close supporters.
These cover restrictions on financial transactions with Zanu-PF leaders, including senior management officials of state-owned companies.
Australia, like other countries, has also stopped defence links with Zimbabwe and restricted arms exports and has downgraded government-to-government links at multilateral forums and cultural links.
In April 2002, the New Zealand government imposed targeted sanctions against the Mugabe regime.
In July 2005, New Zealand instigated a ban on all sporting teams representing Zimbabwe, at any level, from entering New Zealand (except those teams which New Zealand did not have a say in playing here).
Most recently, a ban has been implemented on study in New Zealand by any Zimbabwean adult children of those individuals subject to a travel ban.
On September 4, 2008, Canada’s special economic measures (Zimbabwe) regulations came into force, banning arms exports to Zimbabwe, freezing assets of listed Zimbabweans and prohibiting Zimbabwean aircraft from flying over or landing in Canada.
The largest number of companies affected by all these targeted financial sanctions are held in the business wing of Zanu-PF, Zidco Holdings.
All the countries and organisations maintaining sanctions continue humanitarian aid to Zimbabweans and most have increased it as the humanitarian conditions decline.
In 2002, when these restrictions started being introduced, they were called "smart " sanctions. Later additions, particularly last year when banks and parastatals were added, toughened them up significantly.
Among all the economic injuries suffered by Zimbabwe, sanctions became merely a post-trauma bruise, most economists say, not a blood injury.
How much impact they have had is not quantifiable as even without the restrictions on loans or trade with listed companies, parastatals or individuals, economists question what international financier or bank would have taken the risks of investing in Zimbabwe when it was printing tons of money, had inflation of more than 200 million percent, and was seizing white-owned properties and proposing 51 percent "indigenisation" of all companies.
Obama has just renewed restrictions in March. The EU is due to renew them, alter or lift them when 35 European countries meet to debate them in Brussels in February.
If ongoing inter party dialogue is jolted into completion of the political agreement by President Jacob Zuma’s team of mediators, some in the MDC will call for the sanctions to be lifted.
According to German ambassador Albrecht Conze recently, the West’s bottom line to end sanctions and provide government to government donor support is completion of the constitutional review process.
He pointed to the Friends of Zimbabwe Group of 17 individual western countries, the EU, the African Development Bank, the UN, and the World Bank and its declaration in Berlin on October 26 which he said was "calibrated to re-engagement".
The EU and US believe that Zanu-PF leaders on the lists object more to the visa bans which stop them travelling to Europe and the US than sanctions against companies and parastatals.
If restrictions are lifted in stages, optimists believe the first to go will be two significant parastatal companies freed of restrictions, Zimbank and the parastatal, Agribank.
MDC Finance Minister Tendai Biti wrote to a US congressional staff member soon after the unity government was established in February, asking him to assist with lifting restrictions on the two banks.
"If the sanctions are so useless and don’t work as so many claim, then why keep them?" said an MDC leader recently.
"It’s the only weapon we have against Zanu-PF," countered another.
"The time is coming when some of the financial restrictions will have to go so that Zimbabwe can compete for investment, particularly now that the Reserve Bank of Zimbabwe appears to be more under control," said a senior Western source in Harare. IOL