Commonwealth return
Zim to benefit from $1 trillion trading club
ZIMBABWE will be part of a more than $1 trillion trade and global greenfield investments club once it joins the Commonwealth grouping, which is predicted to consolidate its economic growth trajectory despite global slowdown since 2008.
President Emmerson Mnangagwa’s administration is working towards normalising relations with the international community after years of isolation, which have taken toll on the economy on the back of crippling sanctions since the turn of the millennium. The return to the Commonwealth, a grouping of 53 independent countries, mainly former British colonies, comprising large and small developed and developing economies, is a top priority under the new dispensation’s diplomatic engagement strategy.
For the first time since 2003 Zimbabwe has been invited to attend the ongoing Commonwealth summit in London on an observer status ahead of planned re-admission this year. Foreign Affairs and International Trade Minister, Dr Sibusiso Moyo, leads the delegation to high-level gathering accompanied by Reserve Bank of Zimbabwe Governor, Dr John Mangudya, among other senior dignitaries.
According to a latest Commonwealth Trade Review 2018 report issued ahead of the London summit, Intra-Commonwealth trade and productive greenfield investment is expected to reach US$1.6 trillion by 2020, in spite of the global trade slowdown in recent years,
The rising share of intra-trade and investment within the elite bloc underscores the growing significance of Commonwealth markets for member countries, says the group’s Secretariat. Zimbabwe withdrew from the Commonwealth in 2003 at the height of diplomatic tensions between Harare and London over the land reform programme.
This was after then British Prime Minister Tony Blair refused to provide compensation for land acquired from white commercial farmers for redistribution to indigenous Zimbabweans as agreed at the 1979 Lancaster House Conference, which formalised Zimbabwe’s independence from British colonial rule.
The Commonwealth Trade Review 2018 says proactive policy measures such as improving trade facilitation or tackling non-tariff barriers could trigger even greater gains for member countries. In 2017, cumulative intra-Commonwealth greenfield foreign direct investment was estimated at $700 billion, creating 1.4 million jobs through 10 000 projects. Trade among Commonwealth countries grew to just under $600 billion in 2016 and is expected to increase by at least 17 percent to around $700 billion by 2020. Together, intra-Commonwealth trade and greenfield investment is expected to surpass $1.5 trillion.
“This is a remarkable indication of the power of Commonwealth connection and of the benefits that accrue to member countries as a result of Commonwealth advantage, particularly with world trade only now emerging from the unprecedented slowdown triggered by the financial crisis a decade ago,” Commonwealth secretary-general, Patricia Scotland, said.
“With rising protectionist sentiments and a backlash against globalisation in many countries, the role of the Commonwealth becomes increasingly important as a positive influence for strengthening trade links across boundaries and building prosperity in which all can share.”
President Mnangagwa has formally informed the British government of this position, which he has said would be buttressed by comprehensive talks at a higher level. Government has relayed the message to British Prime Minister Theresa May’s special envoys, Mrs Harriet Baldwin and Mr Rory Stewart, who have visited the country as a show of confidence on President Mnangagwa’s leadership.
According to the report, global foreign direct investment (FDI) flows to the Commonwealth in general are on an upward trend, with FDI stock now exceeding US$5 trillion amid indications that both world trade and intra-trade within the bloc, are recovering.
In this regard there are tremendous opportunities to boost trade and investment between members and Zimbabwe stands to benefit immensely upon rejoining and adopting pro-active policy measures.
Minister Moyo has said there are no barriers to Zimbabwe rejoining the Commonwealth bloc.
He recently clarified that the new dispensation’s foreign policy thrust is to normalise diplomatic ties with Britain and other Western nations within the broader context of promoting and protecting Zimbabwe’s national interests.
In that regard the new administration has adjusted its foreign policy posture to reverse burdened relations through an open and candid re-engagement process based on mutual respect and acknowledgement of divergent historical perspectives.
“The decision for Zimbabwe to engage in diplomatic efforts to rejoin the Commonwealth is a systemic undertaking. It cannot be compartmentalised and attributed to a specific Government department. A major foreign policy decision of this magnitude hinges on comprehensive cross-cutting consultations within our governance architecture,” said Dr Moyo.
“In other words, it is our intention to bring the counter-productive era of parallel monologues to an end, and supplant “shrill” diplomacy with sober and constructive engagement in the management of our external environment. Real politic has won the day informed by the collective recognition that there are no permanent friends or enemies in this global village but permanent national interests.
“The reasons we left the Commonwealth no longer exist but, whilst we desire to rejoin the Commonwealth, we have not formalised the application to do so.
“However, our rejoining the Commonwealth would be yet more proof that we belong to the family of nations.”
Government has expressed optimistic about prospects for rejoining the Commonwealth and recently Finance and Economic Development Minister, Patrick Chinamasa, visited London as part of a comprehensive re-engagement process.
Dr Moyo has said Zimbabwe was ready and willing to play its constructive and rightful role within the Commonwealth after it has rejoined and committed itself to Commonwealth values, principles and priorities as set out in the Harare Commonwealth Declaration of 1991 and its attendant norms and conventions.
As Zimbabwe restores her political-cumdiplomatic relations with Britain, hopes are high that other members of the Commonwealth would not have any footing to deny the country membership.
However, Dr Moyo has stressed that engagement processes still need to take note of sovereign concerns and mutual interests.
The report findings were prepared ahead of this week’s (16-20 April) Commonwealth Heads of Government Meeting, taking place in London under the theme “Towards a Common Future”.
It also explored, among other things, how Commonwealth members could harness new technologies, especially digitisation, to strengthen their domestic trade governance, further reducing costs and fostering new trade and investment.
The already substantial trade between Commonwealth members and its rising relative significance calls for leveraging the group’s effect for greater trade gains. Global trade experts have observed that while Commonwealth members enjoy an inherent trade advantage that promotes their intra-Commonwealth trade, this unique factor has not been driven by any coordinated policy interventions like the ones under regional or bilateral trading blocs.