Diamonds help bolster Mugabe

Tendai Biti, Zimbabwe's finance minister, has described the 60000ha Marange diamond field in the country's east as "the biggest find of alluvial diamonds in the history of mankind. "\r\n

‘They have unfettered access to the fields and are using diamond revenue to maintain their grip on power’ Potential revenue is estimated at $1-billion to $1.7-billion a year, about half the crisis-ridden country’s total forecast GDP this year and enough to end its economic woes at a stroke.

Zimbabwean diamond deposits are believed to stretch from the northeast to the central and eastern parts of the country, down to the south and western parts, extending into Botswana, which also has vast deposits of diamonds. This translates to potential deposits which many have projected to be one-fifth of the world’s total deposits.

But if the revenue from diamond sales fell exclusively into the hands of President Robert Mugabe’s Zanu PF, it could, critics argue, spell the return of a single-party dictatorship and end the present shaky power-sharing arrangement between Mugabe and Morgan Tsvangirai’s Movement for Democratic Change (MDC).

Mugabe has practically seized all executive powers and used them to make unilateral decisions, which has left Tsvangirai looking weak.

This has raised the question: is the diamond find a boon or a bane for Zimbabwe?

A power struggle has been raging between Mugabe and Tsvangirai, and it seems Mugabe is resorting to brazen means to consolidate his power and assert his authority.

This is a remarkable comeback from a man who only 24 months ago was on the brink of being labelled a "failure" after his government lost the economic fight, resorting to printing quintillions of almost worthless Zimbabwe dollars in a bid to cope with rampant inflation.

Agricultural sector

Mugabe also oversaw the destruction of the agricultural sector, resulting in the collapse of the country’s economy. His only salvation was the formation of the Global Political Agreement (GPA), which gave him a lifeline.

Tsvangirai went into the GPA saying he was prepared to work with Mugabe to allow him to address the mistakes of the past.

But Mugabe has since found his feet, both economically and politically – and glaringly so following the sale of diamonds from the Marange fields.

Trevor Maisiri, executive director of the African Reform Institute, said the discovery and sale of diamonds "was really the mainstay of the current obstinacy by Zanu PF in defying the terms of the government of national unity (GNU) and also hastily announcing for elections".

"Some of the main motivational factors that led to Zanu PF’s concurrence to a coalition government were the runaway inflation, depleted capital investments, unstable currency and a generally poor performing economy," Maisiri said.

"This is why it was easy for Zanu-PF to agree to apportion the Ministry of Finance to the MDC-T in the matrix of ministerial distribution in the GNU."

Maisiri said the discovery of diamonds seemed to have given Zanu PF an indication on how the party would now be able to run government solely from diamond income.

Respected diamond writer Rona E Peligal said the major beneficiaries of Zimbabwe’s diamonds were "mostly members of the military, officials in corporations who are cosy with the government, and the men in Mugabe’s inner circle".

"They have unfettered access to the fields and are using diamond revenue to maintain their grip on power in the face of international sanctions.

"Mugabe is now part of a power-sharing government with the former opposition, but in fact he’s sharing very little power at all – and none of the diamond wealth," Peligal said.

Maisiri said in the minds of some Zanu PF officials, diamond sales’ certification by the Kimberley Process was a diplomatic victory against the smart sanctions of the Western countries.

The Zimbabwe National Students Union (Zinasu) has said proceeds from Chiadzwa should ideally be invested in education, as is the case in Botswana.

"The students of Zimbabwe will make loud shrills for part of the financial cake from the sale of Marange diamonds after the Kimberley Process certification."

Zinasu added that the benefits should be dispensed in the form of an education levy.

That diamond proceeds are not being channelled into the fiscus was laid bare when government instructed the Zimbabwe Revenue Authority to trace a US$30-million windfall realised from diamonds sold this year outside international processes.

Biti said the funds did not come into the fiscus and no one was being open about the whereabouts of the windfall. He said of the $45-million realised from the sale of 900000 carats of diamonds in August, government pocketed just $15-million.

Health Minister Henry Madzorera said his ministry was eagerly waiting for funds from diamond sales to trickle down to the population, adding that the revival of the health sector depended on these proceeds.

Social commentator Psychology Chiyangwa said with proper management, diamonds could change the finances of the country, but this was not the case at the moment as diamond proceeds were being channelled into political survival.

Blessing

"Of course it is a wonderful blessing to have diamonds," Chiyangwa said. "They give Zimbabwe a chance to hold its head high. The Chiadzwa proceeds should be used to adequately fund schools, hospitals and infrastructural development and then to pay off the IMF and the World Bank.

"Instead they have been used by the military and Zanu PF for individual purposes. Apparently planes-full of our diamonds (regularly) fly to China."

With diamonds, Mugabe does not need the West or the US or even the MDC. He has the financial resources to pay his army, police, judiciary, the war veterans and the Central Intelligence Organisation to keep him in power.

Analysts are agreed that the proceeds from diamonds have given Mugabe and his party the ability to cock a snook at Tsvangirai and the world at large.

But Chiyangwa begged to differ.

"Make no mistake, diamonds or no diamonds, Mugabe and Zanu PF would still be determined to thwart any call for democracy, let alone democratic change. There was no Chiadzwa in 2000, 2002 or 2005, much less before the turn of the millennium but were they any less regressive then?

"Chiadzwa has merely emboldened their resolve to stay in power," he said.

Tony Hawkins, a University of Zimbabwe professor of business studies, said: "There is no doubt that diamond sales will add value to the country’s revenue, but this money should not go into the hands of individuals."

Revenue should be "ring-fenced and channelled into the construction of infrastructure" such as roads, bridges, hospitals and schools, Hawkins said.