Reform economy first
THINK ON IT by CHRIS CHENGA
It’s true; without the United States removal or significant relaxation of ZIDERA, Zimbabwe will remain prejudiced from international lines of credit and comfortable perusal by western private financiers. Thus, international engagement has to be focused on and resonate with the United States’ foreign policy. In this regard, it is probably wise for President Mnangagwa’s administration to form a strategy with greater economic relevance than emphasizing political narratives to appease its US Congress. Political ideals, as interpreted for sanctioned nations, demand an arduous persuasion that chases no comparably definitive standards. For instance, there is no uniform means of measuring political ideals, such as the human rights of US friends. A serious foreign affairs and congressional strategist should comprehend that friendliness with the US is not determined by any consistent parity in human rights. Of course this is not to discount the importance of what one may perceive as the respectable treatment of Zimbabwean people; rather, it serves to convey that a strategy towards vague political benchmarks is not likely to achieve Congressional consensus. This is perhaps why presently Mnangagwa’s administration is chasing its own tail with regards to ZIDERA.
Economic ideals, however, are definitive and concise. Economic persuasion is much more effectual in moving US congressional attitudes as progress in economic benchmarks is clearly measurable and objective, and likely to be alluring to US interests. On that guidance, the Zimbabwean government should assess whether it is scoring any economic progress that could be of mutual interest with the United States. It is a long shot, but where the target should be aimed.
United States economic policy for Sub-Saharan Africa is arm’s length as articulated in an AGOA policy framework. In fact, nations have to be eligible to fit into this framework. Currently, only 1,5 percent of US exports are to sub-Saharan Africa. US imports from Africa are 0,8 percent of its total import bill. 90 percent of this US – Africa trade is in crude oil and commodities. This shows the distanced extent to which the US directly does business with the region. By all measures of productivity and yield, whether capital availability or economies of scale, Sub-Saharan Africa lacks realistic capacity to boost its share in US global trade of goods and services in the near term. Agriculture, for instance, the region’s greatest sector after commodities exported $261 million worth of produce to the US in 2014. Total US agriculture imports for that year were $114 billion. Sub-Saharan Africa’s largest consumer markets, Nigeria and South Africa, retain income per capita of less than 10% that of the US average. Furthermore, these economies show deplorable income disparity that has over half their populations closer to poverty.
This outlook may suggest to erudite governments that transatlantic attraction would be less about trade competitiveness or direct business in goods and services. At this point, US interests would be more responsive to matters of portfolio investments, transfer payments, and net financial assets. This is the greater context of which Zimbabwe should perceive US foreign policy interests. Accordingly, economic reforms should be exceptional in creating structures that exude significant potential for profitable, secure, and expansive financial flows of US funds into Zimbabwe, and perhaps be a model for other regional frontiers.
It is important to be cognizant that US funds represent incomes and savings of US citizens. Congress is custodian in legislative guidance as to which jurisdictions these funds can venture. Thus, if there is to be any cooperation between the US and Zimbabwe in relation to these funds, economic relations would be interpreted on the proposition that Zimbabwe would be a profitable, secure, and expansive frontier for US incomes and savings. This is what “Open for business” simply means from a US perspective. President Mnangagwa’s administration should start to improve towards this high, but measurable and comparable benchmark. If this cannot be incontestably certified in US Congress, then ZIDERA, like any other US foreign policy legislation is likely set in stone for generations to come.
While Zimbabwe may be in a haste to see sanctions removed, the emphasis should not be focused on scoring vague political benchmarks that are difficult to win over a majority of Congress. The focus should be on whether or not the government is realistically moving towards proposing a profitable, secure, and expansive frontier for US incomes and savings. That is the key economic persuasion for the majority of US Congressmen to shift their present attitudes. Political narratives are not as essential as this benchmark. They only matter in as much as US Congressmen can be assured that by freeing Zimbabwe off sanctions and allowing US incomes and savings into the economy – through lines of credit and western private financiers – these funds will not re-vitalize humanitarianly compromised governments.
Perhaps then, a strategy to pursue the removal or easing of ZIDERA would be to convey how a disentangled Zimbabwean economy can be of benefit to the US through financial infrastructure like franchises, intellectual property, investment trusts, portfolio investments and other vehicles that US funds move through. There is a scope for such as the United States typically has the excess liquidity and assets looking to expand into new frontiers.
It was fitting that Strive Masiyiwa recently spoke on sanctions. Masiyiwa’s business models have thrived because he has proven to be a reliable financial conduit for western incomes and savings into the region. Consider Kwese’s delivery of ESPN, an entity owned by the Walt Disney Company. The Econet Media Group is an active foreign portfolio investment for US incomes and savings. Through its subscriptions model, it sends returns back across the Atlantic with no traceable exposure to humanitarian deplorables for Congressmen to hazard. Masiyiwa is doing exactly what the Zimbabwean economy should show greater capacity to do, which is to assimilate US interests through financial portfolio business models that are profitable, secure, and expansive. The yields can be measurable and objective to US interests. Done right, US Congressmen can consider such progress in deliberation towards relieving sanctions.
Perhaps controversial in certain interpretation, but this weighs more than vague and subjective political benchmarks of which Zimbabwe is currently pursuing. The more enterprises which can become conduits for US incomes and savings, the stronger the case for Zimbabwe to be removed from sanctions. The challenge today is that the Zimbabwean economy has yet to win over the confidence that US incomes and savings can find a profitable, secure, and expansive haven in Zimbabwe. That is what the sanctions narrative should be focused on.
