8 November 2018

Zimbabwe: Hey America, It's Time to End Zimbabwe's Economic Punishment

Photo: Elizabeth Glaser Pediatric AIDS Foundation
U.S. sanctions under ZIDERA impose heavy conditions on Zimbabwe’s government, but hit ordinary citizens hardest.
analysis

Almost a year since Robert Mugabe was removed and months since elections, Zimbabwe's economic crisis continues to deepen. A severe lack of foreign currency has crippled local businesses. Inflation is skyrocketing. And dire shortages of fuel, medical supplies and other essentials threaten social unrest.

There are many reasons for this worrying economic situation. Among them are decades of government mismanagement, widespread corruption and mistrust. But a significant part of responsibility for the ongoing crisis is in the hands of policymakers thousands of miles away.

Ordinarily, one would expect Zimbabwe's economy to be improving right now. Its authoritarian strongman Mugabe is no longer in power. Multi-party elections have been held recently. And the new government, which includes respected technocrats in some key positions, has repeatedly declared the country "open for business". One would have expected these changes to prompt promises of Western development assistance, access to IMF and World Bank credit, and international investment.

All of these things would be fundamental to stabilising Zimbabwe's economy, and many Western partners are keen to invest. But this re-engagement has been made much more difficult because of US sanctions. These measures are undermining Zimbabwe's ability to access credit from international financial institutions and attract much-needed foreign investment.

Renewing US sanctions

On paper, the US Zimbabwean Democracy and Economic Recovery Act (ZIDERA) is about rule of law. It was first passed in 2001 at the height of Zimbabwe's land seizures and was purportedly a reaction to the Zimbabwean government not protecting the property rights of white farmers. The act was part of US- and UK-led efforts to cut off lending by international financial institutions, impose political and economic sanctions, and isolate Zimbabwe.

Specifically, ZIDERA placed individual sanctions on Mugabe and his cronies. It also enshrined into law the US stance that funding from the likes of the IMF and World Bank could not be reinstated until the act was lifted.

When President Mugabe was finally removed in 2017, many hoped that his departure would pave the way for Zimbabwe to end its isolation. President Emmerson Mnangagwa vowed to break with his dictatorial predecessor and allow democracy to flourish. The UK and others signalled their willingness to improve relations.

Yet ZIDERA remained in place. Not only that. This July, US Congress introduced an amended version of it. Passed just days before Zimbabwe's first ever elections without Mugabe, this renewed act included the extra demand that the vote be free and fair.

It is debatable whether Zimbabwe's 30 July elections passed that test. On the one hand, the defeated opposition alleged widespread fraud and irregularities. The army killed six people who were protesting the electoral commission's delays in announcing the results. On the other hand, the polls were probably the most inclusive, free and fair elections ever held in Zimbabwe.

The real reasons behind ZIDERA?

Either way, President Trump signed the amended ZIDERA into law shortly after. In theory, it is possible that the US' continued punishment of Zimbabwe is about rule of law. But this seems unlikely. Instead, it is more likely that the real reasons lie elsewhere.

When ZIDERA was recently amended, it also added another important requirement. It stated: "Zimbabwe and the Southern African Development Community (SADC) should enforce the SADC tribunal rulings from 2007 to 2010 including 18 disputes involving employment, commercial, and human rights cases surrounding dispossessed Zimbabwean commercial farmers and agricultural companies."

These rulings claimed that Zimbabwe's land reform was illegal. The tribunal demanded the government pay compensation to dispossessed white farmers. The sum for what these claims would cost has been estimated at $30 billion.

18 years since the land seizures, the landscape in Zimbabwe has dramatically changed. Instead of 6,000 commercial farmers controlling 70% of valuable farm land, there are an estimated 200,000 new small-scale farmers. In 2018, the country experienced its largest tobacco harvest ever. This new reality on the ground is accepted by most Zimbabweans, both white and black. So rather than being a realistic demand, the inclusion of this steep demand in the amended ZIDERA has been interpreted by many in southern Africa as a warning.

As South Africa and Namibia currently debate how to address historical injustices around land, Zimbabwe's harsh treatment could be seen as a threat for what not to do. Adding weight to these suspicions, President Trump tweeted his concerns about South Africa's land reform process shortly after signing ZIDERA into law. He is reported to have been informed by fringe white farmer lobbies in South Africa who have growing alliances with white supremacist groups in the US.

Punishing ordinary people

How much longer can Zimbabwe's economic punishment be justified? If it is about property rights and land reform, will the new dispensation be ever recognised without the country being drawn further into debt? If it is about the rule of law and politically related violence, then would not the likes of Kenya, Cameroon, Uganda and many more warrant similar measures?

Under the current conditions, it is Zimbabwean citizens that are suffering most. ZIDERA is not so much stopping land reform or punishing elites, but contributing to economic collapse, which hits ordinary people hardest. Lines for petrol, shortages of basic medicines and business closures only bring more hunger, disease and social instability.

The new Zimbabwean government should certainly do more to strengthen transparency, tackle corruption and safeguard human rights. But ZIDERA is not about such concerns, and even if it were, it would not be helping.

While President Trump demands American sovereignty, Zimbabwe's ability to manage its own economy is severely hampered by the US. No country in our globalised world can both balance its budget and stabilise its currency without support. Zimbabweans have already paid a heavy enough price.

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