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At least 80 percent of capital, intermediary and finished goods traded between the EU and developing countries signatory to the IEPA will not be subjected to duty under the terms of the agreement.
Trade expert and academic Dr Moses Tekere believes that the IEPA is unfavourable to countries such as Zimbabwe which are emerging from economic doldrums with their manufacturing industry yet to reach full capacity utilisation.
While, the agreement will allow the country’s agricultural goods such as sugar and ethanol to enter the EU market competitively, Dr Tekere said the country could still have achieved the same goal of accessing the EU market competitively by declaring itself a Least Developed Country, bringing it to levels of Somalia, Central Africa Republic, Lesotho and Mozambique, among the 34 African countries recognised as poor by the United Nations and other development aid agencies.
Dr Tekere believes that for all intents and purposes, Zimbabwe fits in the mould of a Least Developed Country, but the country’s politicians would never admit the fact.
The United Nations defines LDC using the criteria of low income (gross national per capita income of less than $750), weak human resource based on nutrition, health, education and adult literacy and economic vulnerability.
Economic vulnerability uses indicators on the instability of agricultural production; the instability of exports of goods and services; the economic importance of non-traditional activities (share of manufacturing and modern services in GDP); merchandise export concentration; and the handicap of economic smallness.
“Zimbabwe as of today is technically a Least Developed Country. We can deny that but technically we are an LDC,” he said at a recent Zimbabwe National Chamber of Commerce congress in Victoria Falls.
However, what the UN definition does not include is the effects of sanctions on a country.
Zimbabwe has for the past 10 years beenunder economic sanctions from the EU and the United States which resulted in the economy contracting by 40 percent yet most of the countries on the LDC list have not been subjected to sanctions.
Since the formation of the inclusive Government, the performance of the economy has improved significantly.
The country was recently adjudged to have one of the highest literacy rates on the continent, a key factor indicator in defining an LDC.
Permanent secretary for Economic Planning and Investment promotion Dr Desire Sibanda believes that Zimbabwe is not in the same league as Malawi and Mozambique to be declared an LDC.
“Zimbabwe is not a poor country. We were the second largest economy in the Sadc and we have the resources. It’s a question of implementation of policies and sorting out our politics,” he said.
Chairman of the National Indigenisation and Economic Empowerment Board Mr David Chapfika also said Zimbabwe did not qualify to have the poverty tag attached to it.
“Zimbabwe is not a poor country in real terms. We have the highest literacy on the continent. Zimbabwe is pregnant with resources. What is left is to unlock the resources,” he said.
Industry and Commerce Minister Professor Welshman Ncube said although indicators might say Zimbabwe was a LDC, it was not.
But an economic commentator Mr Brains Muchemwa said boasting of massive resources was not enough.
Angola, with its massive oil reserves which are second only to Nigeria, is considered an LDC, so is Zambia which exports billions of dollars worth of copper every year.
He said there was a misconception that mining contributed significantly to the country’s Gross Domestic Product when most of the money earned by mining companies was not repatriated back home to help the economy.
“The mining sector is not contributing to the GDP. Zambia exports $8 billion worth of copper (every year) but is a very poor country. We have a misconception in Zimbabwe.
“What are exports when money goes and does not come back,” he said.
Online Reporter