eBusiness Weekly
Zimbabwe is pursuing a new dynamism in the conduct of its diplomacy premised on the nurturing and consolidation of friendships as the country seeks to create mutually respectful relations. The new policy is heavily biased on economic statecraft particularly the need to attract foreign direct investment. Foreign Affairs and International Trade Minister Rtd Lt-General Sibusiso Moyo (SM) spoke to Business Weekly editor Happiness Zengeni (BW) on this new thrust and its relationship with its all-weather friends going forward
BW – What are Zimbabwe’s foreign policy priorities both regionally and internationally?
SM – The Ministry of Foreign Affairs and International Trade’s priorities are the normalisation of diplomatic relations with countries we have differed with in the past through a robust policy of reengagement in order to marshal FDI for the economic prosperity of our own people. Our diplomacy will focus on mending broken bridges of cooperation; nurturing and consolidating new friendships as well as strengthening old relations with countries that stood behind the country during some of our most difficult moments in the past two decades. In a nutshell, the country seeks a new dynamism in the conduct of its diplomacy that buries the past and normalises diplomatic relations with all countries in the global community. Some may ask why we should bury the past – but then, it is fact that in international relations there are no permanent enemies but permanent interests. My Ministry manages the total external environment to serve Zimbabwe’s national interests.
BW – . Since the International Trade Portfolio is new, please explain to our readers what this entails and what would be its thrust going forward.
SM – First and foremost, I should say that the Foreign policy and economic policy are non-estranged bedfellows. Since foreign policy mirrors domestic policy, it is configured by economic policy among other domestic policies. To this end, economic policy can be used as a tool to project foreign policy stance. Similarly, foreign policy can be designed in response to another state’s domestic economic policy. Thus, the inclusion of the International Trade portfolio is in tandem with the new thrust of our foreign policy premised on a heavy bias on economic statecraft. We will redynamise our diplomatic efforts towards vibrant trade and quick-win investment as we are cognisant that politics and economics are two sides of the same coin in diplomacy, which complement each other.
You may be aware that our country presently faces a liquidity crunch which essentially is an imbalance between outflows and inflows of foreign currency. This imbalance shows that Zimbabwe is not generating sufficient forex from primarily trade activities. The challenge therefore is to craft international trade policies and strategies that generate significant inflows of foreign currency. If this goal is achieved, the country’s balance of payments will be addressed.
You may also want to note that our diplomats will henceforth be expected to be our foot soldiers in this drive and it will not be business as usual as they have to competently adjust to the new realities, albeit in the shortest time possible. We are cognisant that the world does not owe us anything. Therefore, we need to get up and earn out livelihoods through solid diplomacy and vibrant trade in the many commodities which our nation is endowed with.
BW – . Zimbabwe has missed out on investments and developments targeted for emerging economies over the past two decades. How do you see the future of the country in the context of the global environment? What strategies is government putting in place in order to catch up and what do you think are the low hanging fruits that can attract investment into the country?
SM – As mentioned earlier, for almost two decades, some countries have maintained economic impediments such as trade restrictions, financial sanctions, investment restrictions and monetary sanctions. The logic of the economic sanctions though illegal as a foreign policy instrument is relatively straightforward.
The imposition of punitive economic pain on a target country is intended to force political change. Our task now is to convince progressive sections of the international community that our country is experiencing a new dawn that should propel it forward. We are moving on and we don’t want to be tied down by the past. We are intent on opening a new page for the country’s diplomacy by normalizing relations with those countries we differed with in the past. We want to focus on achievements and correct past mistakes. As enunciated so eloquently by His Excellency the President, Cde Emmerson Dambudzo Mnangagwa, the government will promote and protect democratization and the rule of law will be a linchpin on which to build the confidence our society desires in the new government.
As I alluded to elsewhere, our thrust as a country is on the wellbeing of our people and the improvement of their livelihoods. Our new foreign policy thrust can only be successful through the diversification of domestic economy and value addition. We need both technology and capital investments from our trading partners in order to achieve these milestones in the possible timeframe.
Each sector has low hanging fruits which can be attained within the 100-day period. These fruits are in the tourism, mining, agriculture sectors and to an extent the manufacturing sector. However the quickest pick is in the creation of an environment which is conducive to investors. We will focus on facilitating a global competitive enabling environment for trade and foreign investment. This entails the reviewing of current legislation and the processes around doing business in the country which is already underway. There are other challenges such as the liquidity crunch and this can be solved by accessing new lines of credit and cutting down central government expenditure. This would redirect finances to the capital expenditure.
BW – What is the government strategy to encourage economic integration, trade and economic development in the region? How will you bring back the country’s competitiveness in the export market? Will there be a shift in the country’s state policy?
SM – Zimbabwe is a member of a number of sub regional and regional organizations such as the SADC and the COMESA. At the continental level, it is a member of the AU. Accordingly, the country stands guided by the objectives, resolutions and programs enunciated by these organizations as far as economic integration and trade related issues are concerned.
At the national level, our goal is to achieve the internal integration of the Zimbabwean economy. A region whose individual economies are not internally integrated cannot integrate at the regional level. It will be important to work closely with other line ministries to promote the integration of rural and urban economies; the manufacturing and agro based sections, etc. Our government under the leadership of His Excellency the President, Cde Mnangagwa, has emphasized economic diplomacy as one of the chief instruments that will be used to realize the country’s domestic and foreign policy objectives.
Certainly, to enhance our country’s competitiveness, our resources are a critical factor in achieving our foreign economic objectives. However, it should be noted that these resources should be exploited optimally so that they benefit our people by managing them effectively. In this regard, our county will have to seek ways of quickly improving productivity, value addition to our natural resources as well as deepening and broadening the skills of our workforce. Generally, our products are expensive and therefore not competitive on the export markets. We need to retool to increase efficiency and reduce labour costs which are affected by the use of the US$.
The cost of production has to come down and one of the ways this can be achieved is through attracting cheap finance. If industry is able to attract capital at low interest rates then the cost of production will immediately decrease.
Naturally, there is an absence of own currency, which would have retained value both domestically and comparatively with our trading partners and this is a factor.
BW – . What is Zimbabwe’s position regarding the issues of sanctions and international debt?
SM – For almost two decades, some Western countries have maintained a broad range of economic and financial sanctions that negatively impacted on the country. Frankly, these illegal sanctions were not good for the generality of the people. Personally, I don’t agree with logic of sanctions as a foreign policy instrument because it will not affect the alleged targets. Our main task now is to convince some of these countries that our country is open to business in the new dawn. We acknowledge the country’s external debt to international financial institutions such as the IMF, WB, Paris Club and the European Investment Bank and the AfDB. Some of these institutions have expressed a desire to dialogue with on how to ameliorate our circumstances. I should say so far there is goodwill to dialogue. After re-establishing working relations and credit worthiness with these important international institutions, we expect to attract FDI that stimulates the economy. The steps should also address the country’s key economic challenges which include liquidity.
BW – . What is the government doing about re-engaging the West?
SM – His Excellency the President, Cde ED Mnangagwa, has already articulated a foreign policy vision premised on the nurturing and consolidation of friendships as the country seeks to create mutually respectful relations with all members of the family of nations in which we let go of the past and normalize diplomatic relations. The policy of diplomatic re-engagement, of reaching out to countries and institutions that shunned us over the past two decades has already begun. The re-engagement exercise means reopening up economic cooperation with other countries to the level of strategic partnership. We will welcome all nations who desire to relate with us. Simply put, our country seeks mutually beneficial re-engagement.
BW – . The country has for a long time pursued the Look East Policy following its isolation by many Western countries. Will this remain the policy going forward given that some of the countries have provided critical support to the country when everyone shied away?
SM – As indicated earlier on, the re-engagement exercise does not mean the country will abandon its old friends that stood behind or by the country over the last two decades. We will deepen and consolidate this cooperation with our friends as we seek new frontiers of cooperation beyond the traditional friendly states in Africa, Eastern Europe, Asia, Latin America, the Caribbean and The Pacific. We will welcome all nations of goodwill on an equal footing but we will not abandon nor look back on our old friends.
Our goal will be to seek to integrate Zimbabwe into the global village and by so doing diversify our international relations following also the dictates of the principle of the international division of labour and specialisation. We will on a case by case basis be guided by the desire to economise our national resources and to reduce costs of accessing globally produced goods and services.
BW. – Zimbabwe is reported to have a poor record on honouring BIPPAs which have been violated (mostly through land reform and property rights). Can you please comment?
SM – We will revisit all our policies and seek to correct some of the mistakes that occurred during the implementation of these policies particularly with regard to the land reform. Although the land reform program is irreversible, our government will put in place measures to correct some of the mistakes associated with its implementation. The issue of BIPPAs will be reviewed as we carry out an audit on the land reform program. In the inaugural speech, His Excellency President ED Mnangagwa stated that Zimbabwe will honour all BIPPAs and respect all foreign investments. If there are any policies which contradict this newly stated policy stance.
These will be reviewed. BIPPAs will also be examined to identify any breaches. Where such violations exist, we will allow the law to take its course as regards compensation. We of course acknowledge that settling compensation where it is due will not be an overnight exercise.
This will call for budgeting resources. Therefore, we hope those who we owe compensation will bear with the government’s compensation time frame. The spirit of a win-win partnership should underscore our new relations with the aggrieved parties. The rule of law should reassure everyone in the new era. Foreign Direct Investors will be secure in Zimbabwe as we go forward.
BW – Lately, the UN has been encouraging developing economies to move away from being highly dependent on commodities saying developing countries will struggle to achieve the Sustainable Development Goals unless they break the chains of commodity dependence and yet Zimbabwe is anchoring its economic revival on commodities (agriculture and mining). Do you think that going against the ‘accepted’ grain of reasoning will not affect the country especially given the volatility around commodity prices?
SM – I think the issue is not about moving away from commodities but adding value to them. We cannot wish away primary production and the resultant marketing of commodities in the short term. What is critical is to diversify our economy by focusing more on producing manufactured goods. Thus, resources have to be value added for them to bring in optimal benefits to the whole country.
We also need to embrace the relevant technology and improve the skills of our people. This is why His Excellency President Mnangagwa is continuously stressing the importance of Science and technology so as to uplift Zimbabwe’s global standing and that our people’s livelihoods are uplifted. It is common cause that primary production precedes value addition. Agriculture is the backbone of our agro-industry. When agriculture is enhanced, it creates employment down the value chain and we realise economic development which in turn, improves our capacity to export processed goods.
I challenge those who talk down the critical role played by agriculture in global economies to provide an answer to the ever looming global food crisis. The world is marked by high levels of hunger, starvation and malnutrition as a result of food shortages- due to a number of factors that include the vagaries of the weather; insufficient food production and supply and high food prices.
Some developed countries have up to 75 percent of their GDP contributed from the services sector.
The key is to embrace technology which will enhance efficiency in the extractive industry. We believe that any FDI inflows have to be accompanied by technology. Technology is key in the creation of a competitive economy which can create goods for the export market.
Take note of the fact that, it’s a stage development process. By nature, processes take time to mature and produce sustainable outcomes. We have a very loyal, patriotic and educated population. We are capable and ready to work together in order to carry our nation to the next level. We shall never be found wanting in our collective pursuit of peace, security (human security) and development.
