United States sanctions are crippling Zimbabwe

US Secretary of the Treasury Steven Mnuchin

In early March, the United States of America sanctions imposed unilaterally on Zimbabwe in 2003 will expire.

But this does not mean that the US is going to remove the noose from the neck of Zimbabwe.

The US senate’s foreign relations committee has called for a review of the sanctions on Zimbabwe with a call for more names to be added to the sanctions list to deter human rights abuses.

Senators Jim Risch , the chairman of the Senate foreign relations committee, and Chris Coons, a member of the sub-committee on Africa and global health policy, have sent a letter to treasury secretary Steven Mnuchin and secretary of state Mike Pompeo requesting that the US department of the treasury update the list of sanctioned persons in Zimbabwe.

“Given the developments in Zimbabwe over the last two years, we urge you to consider enhancing the tools at your disposal, including the use of targeted sanctions, to incentivise changes in behaviour by the government of Zimbabwe,” the two senators wrote.

“An update to the list of the specially designated nationals and blocked persons list should incorporate a balance of new designations with appropriate removals.”

To justify the illegal actions of the White House, which uses a sanctions policy to exert pressure and change unwanted regimes, US ambassador in Botswana Craig Cloud on January 28 met in Gaborone with Sadc executive secretary Stergomena Tax.

Just after the meeting, the US embassy in Botswana tried to spin the meeting by falsely claiming that A Cloud and Tax had agreed that corruption and not sanctions was causing Zimbabwe’s problems.

They also added a hash tag #ItsNotSanctions that was used by the US embassy in Zimbabwe on October 25 last year when Sadc nations rallied behind Zimbabwe in the call for the removal of the illegal Western sanctions.

“Ambassador Cloud and Dr Tax also discussed how failed economic policies and corruption have created the current economic crisis in Zimbabwe. #ItsNotSanctions,” the US embassy claimed.

But Tax was quick to expose the falsehood, saying Sadc did not share the said position.

“This was not part of what was discussed! Might be the position of the Embassy, but definitely not Sadc’s position,” she said.

Tax also reiterated the need to further engage on reforms that will lead to Zimbabwe’s economic recovery.

On the contrary, in a statement on its Twitter handle the regional body said “Sadc ES Dr Tax met with the ambassador of USA to Botswana, H.E. Craig Cloud where Dr Tax reiterated Sadc’s call for the immediate removal of sanctions on Zimbabwe & the need to further engage on reforms that will see a recovery of the country’s economy,” read the tweet.

This statement by Tax shows that Sadc is not going to change its stance.

In August last year, Sadc resolved to set aside October 25 as the solidarity day against illegal sanctions imposed on Zimbabwe and resolved to conduct various activities in their respective countries on the day to call for the immediate removal of the economic embargo.

The regional campaign widened beyond the regional bloc to the entire continent when the African Union voiced its objections to the sanctions imposed on Zimbabwe, calling for their immediate removal.

Internationally, China, Cuba and the Non-Aligned Movement made strong calls for the removal of the sanctions.

And the situation with the coverage of the meeting of the American ambassador in Botswana and the Sadc executive secretary clearly shows how the Americans wishful thinking and use Twitter as an official channel for disseminating false information.

The same US embassy in Botswana tweeted the 5 so-called “facts” about US sanctions in Zimbabwe:

1. US sanctions largely target those who engage in corruption, violate human rights and undermine the democratic institutions or process.

2. Targeted sanctions do not prohibit trade between the US and Zimbabwe.

3. Zidera and targeted sanctions are different, the US has never invoked Zidera.

4. The sanctions list is a living document.

5. Failed economic policies and corruption, not sanctions hinder Zimbabwe’s economic growth.

However, in contrast to the loud statements of the Americans, the facts stubbornly speak of the destructive effect of American sanctions on Zimbabwe.

Sanctions have been detrimental to Zimbabwe’s economy as they have dragged economic progression backward and worsened socio-economic conditions of the general populace ever since they were imposed in the early 2000s.

Meant to choke Zimbabwe’s economy, these sanctions аге two dimensional; the first being Zidera and the second is referred to as а “targeted sanctions programme”.

It is imperative to note that sanctions have negatively affected the economic prosperity of Zimbabwe.

Several government officials and companies in which Zimbabwe had interests were placed оп а sanctions list.

Among them was the Industrial Development Corporation (IDC), а wholly State-owned enterprise.

At the time, IDC had interests in а broad range of Zimbabwean companies such as Olivine, Sable Chemicals, Chemplex and Zimbabwe Fertiliser Company, which have been under-performing as а result of sanctions. These companies had no access to credit lines.

As а result of Western sanctions, Standard Chartered ordered IDC to close its accounts with the bank. Standard Chartered’s fears were not unfounded.

Economists have estimated that Zimbabwe State enterprises account for 14% of the country’s GDP, making them а key component of the economy.

Typically, State enterprises are key to any economy’s growth and largely depend on foreign loans for their capital expenditure.

Such loans have mostly dried up due to restrictions which are encompassed in Zidera.

Thanks to Zidera, Zimbabwe has not been receiving enough foreign direct investment due to the fact that most firms and companies аге handicapped.

So, the US has maintained its theory that the sanctions are “targeted” only some entities and individuals in Zimbabwe and not directed against the people of Zimbabwe. Is it so?

But the reality of the situation is that western sanctions harm primarily the financial services sector and lead to a reduction in foreign investment, so necessary for the development of the economy of the republic.

It’s only a few banks, which can take Zimbabwe’s risk. Zimbabwe is under sanctions and the sanctions are in three parts.

The first one is Zidera, which says no one should give Zimbabwe development finance, be it the (International Monetary Fund) IMF, World Bank or African Development Bank.

Secondly, there is OFAC, which says that the transactions from Zimbabwe should be scrutinised for compliance risk.

The third is Zimbabwe’s exclusion from the African Growth and Opportunity Act (whose purpose is to assist the economies of sub-Saharan Africa and to improve economic relations between the United States and the region), which means we do not have market access.

These three pillars have placed immense constraints on the Zimbabwean economy.

The real effects of the sanctions have been to cut off Zimbabwe from the global banking system.

Here is a situation where the global financial markets have been de-risking Zimbabwe.

The country’s constrained access to international financing has been worsened by the fact that the country has lost over 100 foreign correspondent banks since 2008.

And this is one of the causes of the currency crisis.

But with a currency crisis, creating long-term productive capacity becomes a mammoth task.

Major export earners like mining, agriculture and tourism are frustrated through increased costs of doing business in addition to restricted access to international markets.

Consequently, Zimbabwe’s economy today is half its size, as evidenced by capacity utilization, which hovers below 50%.

That means around US$20 billion of economic potential was lost last year alone.

Now imagine, Zimbabwe is approaching 20 years under sanctions.

By comparison, the US estimates of lost receipts from corruption in Zimbabwe were around US$1billion.

At the same time, Western countries say that despite sanctions, they are increasing support for Zimbabwe through various assistance programmes.

External aid instead of investments in fact perpetuates poverty.

It is actually washing out much needed investments which would otherwise ignite economic growth, boost job creation and support self-sustenance.

If direct investments come to the country, over a number of years Zimbabwe will be self-sufficient and not reliant on any foreign humanitarian support.

But this is absolutely not beneficial to the west.

So-called programmse of assistance actually benefit donor countries, as in return they earn considerable soft power and gain significant leverage over the economic affairs of the host governments.

The fact is the losses from the effects of sanctions alone far exceed the cash handouts dished out by westerners.

For this reason, there is no doubt that in late February – early March, the United States will extend, or perhaps even toughen, anti-Zimbabwean sanctions, and the European Union will follow the American example, doing everything “for the prosperity of democracy in Zimbabwe.”

And those who doubt the “good” intentions of the west, implemented through sanctions, can read tweets by American officials. – The Standard