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Nathan Muchemwa Herald Correspondent
Revisiting one of the characterisations of economic sanctions or coercion, which refers to the imposition of economic pain by one government on another to attain some political goal, it is evident sanctions on Zimbabwe were meant to be punitive.
Western countries imposed sanctions on Zimbabwe with a view to punish the Government by inducing hardships upon the populace, thus inciting them to engage in acts of civil disobedience and ultimately remove the Government from power.
The impact of economic sanctions on the Zimbabwean economy can be assessed with reference to aspects such as aggregate economic performance using nominal Gross Domestic Product (GDP), or GDP growth as a proxy, inflation trend, flow of financial assistance from multilateral financial institutions, Foreign Direct Investment (FDI) flows and social service delivery to name but a few.
The transmission mechanism of sanctions into the economy has largely been through a decrease in external lines of credit, lack of Balance of Payment support, reduced FDI flows, non-eligibility of the country for Highly Indebted Poor Countries initiative (HIPC) to get debt relief and reduced trade which resulted in severe foreign currency shortages which trickled down in the form of shortage of critical imports.
The contraction of the economy due to illegal sanctions manifested itself through inflation.
Households and corporates faced severe hardships through loss of value of assets, income, savings and or investments.
The hyperinflation resulted in speculative activities and arbitrage arising from the conversion of the Zimbabwe dollar into foreign currency.
The mining industry has been targeted and affected by the sanctions in the past two decades.
Gold production in Zimbabwe which reached 28 000 kilogrammes in 1998 had declined to below 6 000 kg per year for the period 2005 to 2010.
It goes without saying that the sanctions are to blame as mining houses could not secure off-shore lines of credit to meet working capital and expansion requirements.
As a result, Zimbabwe was delisted from the London Bullion Marketers Association (LMBA) for failure to deliver the minimum 10 tonnes per year.
However, with the coming in of the Second Republic, gold production has been above the minimum 10 tonnes requirement.
In 2022, gold production amounted to about 35,38 tonnes which was a 19,5 percent up from the previous year’s output.
Moreover, the tourism sector has not been spared by the sanctions.
Several foreign airlines suspended flights into the country due to economic challenges induced by illegal sanctions, which contracted the economy by 50 percent.
Among the airlines that stopped operations in Zimbabwe are Austrian Airlines, Swiss Air, Air France and TAP Air Portugal.
But there has been renewed interest in Zimbabwe among foreign airlines since 2017 after the coming in of the Second Republic.
Zimbabwe’s air space has recorded an increase in flights as Ethiopian Airlines, Kenya Airlines, British Airways, Emirates, Airlink, RwandAir have been flying into the country.
As if this is not enough, the introduction of the engagement and re-engagement policy by the Second Republic has seen the warming of relations between Zimbabwe and the European Union (EU).
The EU exhibition at the Zimbabwe International Trade Fair (ZITF) in April and at the Sanganai Hlanganani World Tourism Expo, October 2023 was testimony to the fact that Zimbabwe is open for business and the Second Republic was focusing more on economic diplomacy.
It is in this light that the Western countries have stopped sponsoring opposition parties such as the CCC as it is tantamount to pouring money into a sinking hole.
Trade sanctions limit the country’s exports or restrict its imports. Trade barriers such as embargoes and quantitative restrictions are thus imposed.
In Zimbabwe, trade sanctions have taken the form of denied access to foreign lines of credit, which ordinarily finance external trade.
The market for the country’s exports is also shrinking, as export competitiveness crumbles under the adverse perceptions.
Additionally, financial sanctions, especially involving trade finance, interrupts trade and ultimately constrains the economy’s foreign currency generating capacity, as well as economic activity in general.
Effects of sanctions or trade restrictions by Western countries has seen Zimbabwe being sidelined to access the US markets under the Africa Growth and Opportunities Act (AGOA).
From an international relations perspective during the bipolar period, some countries survived sanctions due to the Cold era Capitalism vis-à-vis Socialism rivalry that existed between the US and the Soviet Union, where assistance could be obtained politically from rivalry blocks.
The proliferation of multiple centres of economic influence such as the BRICS and other emerging economic powerhouses may serve to negate the effects of sanctions by the few senders.
With the current shift in the world economy, the US dollar is slowly depreciating as countries are now considering other currencies such as the Chinese Yuan.
Hence, Zimbabwe being a friend to all and enemy to none can join BRICS so as to bust the illegal economic sanctions.
In addition to the bi-polar or multiple polar rivalry, countries tend to adopt sanctions bursting measures such as Import Substitution Industrialisation and switching trading partners.
Given the fact that the main objective of economic sanctions is to achieve political goals, mainly of regime change as is the case for Zimbabwe, the sanctions by the Western countries have been a failure.
It is not in doubt that the sanctions have caused a lot of hardships as outlined above.
The Second Republic under the leadership of President Mnangagwa has adopted counter measures to mitigate the effects of sanctions.
Zimbabwe’s foreign policy ‘friends to all and enemy to none’ has seen the country embarking on the engagement and re-engagement policy which has seen the Second Republic attracting investors.
Support from bilateral and regional blocks such as SADC, COMESA and the African Union as seen 25 October of every year being declared the Anti-Sanctions Day.
Moreover, measures adopted by the Second Republic that included the introduction of the Transitional Stabilisation Programme (TSP) and the National Development Strategy 1 (NDS1) have registered significant growth towards the economy.
The Second Republic has a vision coined Vision 2030 which will see Zimbabwe being an upper middle income economy by the year 2030, and this will see the NDS2 taking over from NDS1.
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