eBusiness Weekly
Golden Sibanda
Government is working around concerns raised by the United States through the Zimbabwe Democracy and Economic Recovery Amendment Act (ZIDERA) in a bid to normalise relations with Washington — weeks after the world’s largest economy renewed a two-decade old economic embargo against the country, according to official sources in Harare.
While the United States’ Senate and Congress passed the amended ZIDERA law only last month citing certain unfulfilled conditions, Washington took note of progress Harare has made towards addressing some of its concerns.
US president Donald Trump signed the amended ZIDERA on August 8 this year after the Bill was introduced in the US Congress on March 22, 2018 and passed on July 25, ahead of Zimbabwe’s general elections on July 30, 2018.
ZIDERA is an Act first passed by the US congress in 2001, which imposed severe economic sanctions on Zimbabwe over its land reform programme instituted since 2001, with the United Nations unsanctioned economic embargo partly to blame for decimating nearly 50 percent of the country’s gross domestic product GDP by 2008.
US sanctions, according to Zimbabwe’s central bank, resulted in the drying up of project finance and balance of payments support, with far reaching consequences on the majority of the people, which manifested through collapse of service delivery, industries and infrastructure.
The US claims about Zidera
However, while Washington claimed ZIDERA was designed to foster a transition to democracy and economic recovery, Zimbabwe undertook the land reform programme to redistribute land from the white minority number just about 4 000, but who held over 90 percent of the country’s productive land, to the landless black majority.
The United States is the world’s superpower, boasting gross domestic product (GDP) of $19 trillion, dominates the world’s economic and political systems and controls levers of global capital flows. With the strongest military and economy, the US is capable of global power projection, giving it significant but often unjust influence worldwide
Government sources told Business Weekly that Finance and Economic Planning Minister Patrick Chinamasa, has since written to Foreign Affairs and International Trade Minister Sibusiso Moyo, bringing to his attention issues raised by the United States through ZIDERA and Harare’s position regarding issues and need engage the US to close ranks on the matters.
The US acknowledged, in the ZIDERA Amendment, that Harare had made satisfactory progress in addressing some of its misgivings among them electoral reforms and settling of long-standing arrears to the International Monetary Fund (IMF).
“What is pleasing to note is that Government is seized with the issues, and Finance and Economic Planning Minister (Patrick Chinamasa) has started working with the Foreign Affairs Minister to start the process of addressing the outstanding issues.
“The US has noted significant progress Zimbabwe has made in addressing some of the issues, for example on economic reforms such as the Indigenisation Policy, opening up Zimbabwe for business, increasing the private sector footprint, sale of state owned enterprises and fiscal consolidation among others.
“The Government is also making concerted efforts to compensate farmers and return to constitutionalism and rule of law,” the source said.
“Therefore, the Government is aware of the need to move with speed to engage the USA and the rest of the world on issues highlighted, in line with his Excellence President Mnangagwa’s inauguration speech commitment,” the source added.
Chinamasa reacts to new Zidera
Minister Chinamasa confirmed to Business Weekly that he had indeed written to Foreign Affairs Minister Moyo pointing out that he “gave him what we consider an analysis of the previous ZIDERA and the new amended ZIDERA.”
“We have done an analysis of the amendment and we have done a comparative analysis of the amendment vis-à-vis the old legislation and there are changes we may agree or not agree with and some which we have satisfied and will continue to engage US authorities with a view to reach an understanding as to some of their comments,” he said.
Minister Chinamasa said Government will engage the US to find an understanding and clear issues regarding disappearance of persons such as opposition activist Itai Dzamara, which he said Washington wanted clarified, but circumstances of which Government was “also in the dark”, not responsible for or aware of and cannot not account for. Further, he said there were issues, such as resolution of issues around the land reform, which Government will only address in terms of the country’s Constitutional provisions for the sole benefit of Zimbabwe and not any external force.
The Minister said some issues raised in the ZIDERA such as satisfaction of a wide range of pre-election issues to do with the voters role, conduct of ZEC and its independence, role of the defence forces in the elections and participation of the civic society and international observers to access and analyse the electoral process had all been met.
Other issues, he said, such as sustained commitment to reforming the economy are ways that promote growth, address unemployment; underdevelopment and restore livelihoods were already underway and were not an event, but a process.
Government will also seek to clarify issues with the US on claims of “private appropriation of public assets” as one of congress findings for failure by Government to render itself eligible to participate in World Bank programmes.
There is reportedly the realization within sections of Government that after the US noted when it amended the economic embargo, that Harare had made progress in addressing a number of issues, it was now easier than before to clear the rest of issues.
“While sanctions are retrogressive on the economy, the amendments represent pointers or areas that the Government should engage USA to ensure that there is continuous dialogue under the re-engagement programme,” a source said.
Outstanding issues from new Zidera
Government sources said among the issues outstanding, according to the amended ZIDERA were further economic reforms (which Government has already embarked on), compensation for white former commercial farmers, clearance of arrears other than IMF, setting up of commissions of enquiry into missing persons to ensure closure.
The US government has by far the largest share of votes in multilateral lenders such as IMF and World Bank and, along with allies, effectively controls their operations. As such, some the people running the IMF and the World Bank are the same individuals who run the US government and the governments of its closest allies and their policies.
“Commissions of inquiry are work in progress, as it is critical to bring closure to such outstanding issues,” a Government source said.
Zidera and its impact
on Zim economy
Due to ZIDERA, Zimbabwe has been unable to participate in programmes created by the International Bank for Reconstruction and Development and IMF fund programmes to assist in the transformation and resuscitation of the Zimbabwean economy.
Furthermore, said exclusion to the people of Zimbabwe from the economic and democratic benefits laid out by programme donors, including the United States, was because of alleged “economic mismanagement, undemocratic practices, and human rights abuses, which Government then led by former president Robert Mugabe, vehemently denied and rebutted as false.
The IMF suspended support to Zimbabwe under a “Stand By Arrangement” in September 1999 that was approved in August 1999 for economic adjustment and reform.
In October 1999, all structural loans, credits, and guarantees to the Government of Zimbabwe were suspended from the International Development Association (IDA). This was followed by a complete suspension of new lending to the Government of Zimbabwe by the IDA in May 2000.
By September 2000, the IDA suspended all funds to the Government of Zimbabwe for ongoing projects. The United States also sanctioned individuals or organised discovered to be cooperating or assisting Zimbabwe in ways that help to sustain the economy and political persons specified by Washington.
As such, the Secretary of the Treasury instructed the US executive director of each international financial institution to “oppose and vote against” the following any extension by the respective institution of any loan credit, or guarantee to the Government of Zimbabwe;
It was also directed that any cancellation or reduction of indebtedness owed by the Government of Zimbabwe to the United States or any international financial institution be suspended.
Conditions set by the US that once satisfied it would lift the sanctions included restoration of the rule of law and electoral Conditions: that Zimbabwe has held a presidential election that is widely accepted as free and fair and the president-elect is free to assume the duties of the office.
Washington also demanded that the Government of Zimbabwe sufficiently improves the pre-election environment, which it has already done following the watershed July 30, 2018 harmonised elections, to a degree consistent with accepted international standards for security and freedom of movement and association.
