daniel chigunwe
THE finding by United States President Donald Trump that some American aid has been used for “promoting ideas in foreign countries that are directly inverse to harmonious and stable relations internal to and among countries”, that is regime change, backs up allegations made by Zimbabwe and many other countries.
This was one of the reasons why most US aid around the world was suspended for 90 days during a review to see if it was advancing the foreign policy of the United States as set by the President.
There have been waivers, but it is not yet known precisely which programmes, and in which countries, may benefit from the humanitarian and health aid waivers.
But starting from the two facts that there is a new US administration, probably keener on its headline core policy of putting America first rather than trying to run the world, and that the President agrees that much regime change activity is unnecessary, there is an opportunity for a reset of relations between the US and Zimbabwe.
The principle leverage the US uses to try and change Zimbabwe is the sanctions regime. These are basically financial sanctions to deny Zimbabwe access to global financial institutions, where the US is usually the largest shareholder with the largest vote although not a majority vote any more, and to prevent US banks and businesses dealing with a variable list of named Zimbabweans and any business they might be involved in.
Both sets of financial sanctions hit the entire country. The lockout from the global institutions is being overcome with the active efforts now in place to sort out the Zimbabwean arrears.
This process will almost certainly culminate in a rescheduling of debt coupled to a payment plan, probably based on a modest percentage of foreign earnings. That will at least allow Zimbabwe access to the concessionary development finance, although we can also be certain that the present Second Republic Government will be very careful about the sort of development it is willing to borrow money for, basically just those projects that produce immediate revenue that can used to service the debt.
For example, borrowing to build a power station, so long as it will generate regardless of floods and drought is acceptable, since Zesa can sell almost anything that is generated and so have revenue to repay loans. The same goes for building dams, when the water can be sold to farmers, mines and towns.
The highway programme could be accelerated by moving away from what amounts to a cash programme, contractors taking on the next portion when there is enough cash from the toll gates, to a faster programme whereby the new road is generating the tool fees that are used to repay a partial loan.
Capital works for social programmes, mainly education and health, would still have to come from taxes as these do not generate income, but would now be getting most of the Government capital budget paid by taxes. The second set of sanctions, what are wrongly argued to be targeted sanctions, have a far wider effect and explain why US-Zimbabwe trade is so small.
It is quite possible for a US business to do business with a Zimbabwean company, but there are a whole lot of expensive checks to be done by the company and its bankers to make sure that the tightly enforced US sanctions do not apply.
Generally the cost of these checks is far greater than the profit on the deal, so the commercial solution is just to dump Zimbabwean business as not worth the effort.
A lifting of the US sanctions, and this can be done by Executive Order under the Zimbabwe Democracy and Economic Recovery Act legislation, would probably help speed up the deals now in progress with global institutions.
This would be especially useful in opening up greater US-Zimbabwe trade when US businesses and banks do not continually have to do a whole lot of expensive work to prove they are not violating sanctions.
They would seek business, rather than reject business as being too costly.
It is unlikely that Zimbabwe and any US administration will ever be the best of friends, but a fairly dramatic upturn in US-Zimbabwe relations would come about if the US simply left Zimbabwe alone. The Zimbabwe foreign policy consistently followed by President Mnangagwa has been to be a friend to all and an enemy of none. We simply seek normality with the US.
Even the land reform programme, for which Zimbabwe is sanctioned, has been settled with the deal between the Government and the white former commercial farmers.
Zimbabwe is slowly paying off what it owes the former landholders for improvements, but there has always been the feeling that with access to global finance this could be paid off quickly. The new farmers are now already in many crops, led by tobacco and wheat, producing far more than the former landowners and so generating the cash that could be used to pay off the agreed debt, whether directly over several years or via repayments on a loan that paid off the former farmers in one fell swoop.
The question of health aid, largely granted through the President’s Emergency Plan for Aids Relief, Pepfar, comes through the State Department’s Bureau of Global Health Security and Diplomacy rather than the United States Agency for International Development which might well be wound up with any programmes wanted to be retained or initiated being administered through the State Department directly.
Everything is still in the air both for any detailed temporary waivers of the aid ban or whether it will continue after the assessment. The Government has already made it clear that the core of the programme, the ART medication that keeps so many healthy and necessary testing, will continue.
If we did have to find the money ourselves to replace US aid payments we could almost certainly boost efficiency by having the programmes going through the Ministry of Health and Child Care, rather than via NGOs that the United States favours as local contractors for distributing its aid. The removal of a middle level of NGO management, with their salaries and vehicles, would be a major saving while retaining the staff on the ground and the actual work being done.
Online Reporter