Impact of sanctions on FDI in Zim
RESTRICTIVE measures commonly known as sanctions are a form of coercion used by a state, or an international organisation against another state for a myriad of reasons.
These restrictive measures may be imposed multilaterally or unilaterally, with the former being imposed by the United Nations Security Council (UNSC), and unilaterally by individual states.
The United Nations Charter (UN Charter) addresses the imposition of multilateral restrictive measures by the UNSC.
The use of multilateral restrictive measures is within the legal framework of the UN Charter, hence, under international law, the measures are permissible. The UNSC has imposed restrictive measures through resolutions on many occasions. On the other hand, unilateral restrictive measures are imposed by individual states as part of their foreign policy tool in order to unduly influence the conduct of the target state. Unilateral restrictive measures are outside the framework of the UN Charter and are prohibited under international law.
Individual states such as the United States of America have imposed unilateral restrictive measures on a number of countries and Zimbabwe is a victim of such unfettered discretion that is in complete violation of international law, but wrongly justified under the doctrine of state sovereignty through exercise of foreign policy.
While the US has over the years argued that sanctions imposed on Zimbabwe are targeted, the undeniable truth has been that the collateral damage that they have had on foreign direct investment (FDI) and the general public.
Undoubtedly, these sanctions were meant and are still meant to trigger regime change in Zimbabwe. It is common cause that officials of the US government have made it clear that by imposing sanctions, the intention was to make Zimbabwe’s economy “scream”, as in the words of Senator Chester Crocker.
Ironically, the US government has consistently argued that these are targeted sanctions. If they are targeted, why would Senator Chester Crocker want the economy to “scream”?
It does not need a rocket scientist to interpret that the aim has always been to strangle Zimbabweans through an economic embargo disguised as targeted Sanctions. It is not in dispute that Zimbabwe has lost an estimated US$40-42 billion in FDI due to sanctions. Therefore, it is a fallacy to argue that the sanctions are a blessing to Zimbabweans and they should be retained.
Whether one supports President Mnangagwa’s Government or not; whether one belongs to opposition parties or the ruling party; whether one is religious or not; whether one is in business or not, the bottom line is that sanctions must be condemned by all right thinking patriotic Zimbabweans.
Foreign policy
The imposition of sanctions by the US against Zimbabwe is part of its foreign policy expressed in the form of Zimbabwe Democracy and Economic Recovery Act of 2001 and Amended in 2018 (ZIDERA) that is administered by the US Department of Office of Foreign Assets Control.
ZIDERA’s substance is twofold. First, it is to direct or influence the Western type of democracy in Zimbabwe, which democracy has failed in the West, particularly in the US, with the blacklives matter movement being a good example.
Second, ZIDERA is meant to influence Zimbabwe’s economic trajectory by dictating and influencing who invests in the country. Zimbabwe is blessed massively with strategic mineral resources that have been historically milked to build both the economies of Britain and the US.
From their inception in 2001 to 2020, what have been the gains of sanctions to the US? The answer is zero.
Simply put, the sanctions debate is a project that has failed for the US. It is a failure of the US foreign policy on this aspect. The time has come for the US to do the right thing, that is, to unconditionally remove the sanctions
The imposition of sanctions on Zimbabwe was a miscalculated move on the part of the US government, and the continued bullish behaviour of insisting on their existence is not only harsh, but unreasonable, given the changing circumstances in the political and economic reforms that the country has been undergoing since 2017.
The New Dispensation has substantially complied with the requirements of ZIDERA, especially in the area of law reform. Of course there is room for improvement, but the pace on the reforms by the previous Government cannot in all earnest be compared to what has been done so far.
The US government has consistently argued that the economic meltdown in Zimbabwe has been caused by corruption rather than sanctions. No one has defended corruption or disputed the corrosive nature of corruption not only in Zimbabwe, but the world over.
Corruption by its nature, even in the US, is difficult to police. The Zimbabwean Government is making reasonable strides in fighting corruption. This was acknowledged by Transparency International Corruption Perception Index of 2019 where Zimbabwe moved positively up the ladder; a feat that had evaded the country for a longtime.
Not only that, the recent signing of the Economic Partnership Agreement (EPA) between Zimbabwe and Britain is a positive appreciation that the country is poised for growth.
With all its intense due diligence there is no way the British would have signed the EPA with Zimbabwe had it not been convinced that there is light at the end of the tunnel. Therefore, for Zimbabweans and the British to fully enjoy the benefits of the EPA, the sanctions must be unconditionally removed.
In actual fact, it will be in the interest of the British to support the unconditional removal of sanctions considering the effects of Brexit without a trade pact.
◆ Dr Willard T Mugadza is the leader of Bethel Christian Party. He holds a Doctor of Laws (LLD), and is an expert in public procurement, corruption, international trade, governance and policy. He has done work for the World Bank Group, African Development Bank and Transparency International.
◆