Sun continues to rise from the East but brings no manna
‘WE have turned East, where the sun rises, and given our back to the West, where the sun sets,” President Mugabe told Zimbabweans on Independence Day at the National Sports Stadium last year.
He added: “The hostility we have faced from Western countries in response to our land reform programme has taught us to diversify our source and export markets. We have turned East, we have turned to our region and other sub-regions on our continent. With this support, we have started building mutually beneficial partnerships that will help us build a strong national economy, our ultimate goal.”
To buttress his point, President Mugabe visited China in July last year where his handlers said new agreements had been secured, including a US$6 million deal to import maize, financing of the expansion of Hwange thermal power station and a loan to the Zimbabwe Electricity Supply Authority.
As part of the tie-up China sold Zimbabwe planes and buses and transformers to Zesa. Zimbabwe was also granted the “approved tourism destination status” to open the country to Chinese tourists. As part of the plan, Air Zimbabwe started to fly to Singapore and Beijing in the hope that our planes would bring back loads of Chinese tourists.
The Chinese dream is collapsing as exemplified this week by admissions by the Zimbabwe Tourism Authority that all was not well on the Chinese front. Arrivals had declined 70%, the sharpest decline of any source market.
That is not all. It has been reported that the planes flying to the Far East have been making huge losses of up to US$980 000 every month. That is the cost of looking east.
There is no visible Chinese investment in electricity generation and the country has a huge power deficit.
We warned that the euphoria about “looking east” would not benefit the country as long as Zimbabwe did not have foreign currency and was instead reducing itself to a dumping ground for substandard Chinese goods.
The government had experienced a similar delirium in 2001 when it tried to forge ties with Malaysia. We are still waiting for electronic firms and agro-processing plants which we were told would be set up under numerous trade deals. The much-heralded YTL deal with Hwange power station in 1997 was stillborn.
The reality of trade with the Far Eastern countries, which we pointed out early on, was that nothing would come Zimbabwe’s way on the house. The Chinese, like any economic power, demand international commercial rates for whatever services they render to Zimbabwe. This entails the country generating forex, which it is not doing, hence there have been no real benefits from looking east.
This explains why another Look East venture — a US$200 million deal with the Iranian government to refurbish the Kariba hydro power station — has not taken off. Zimbabwe cannot raise the US$30 million deposit agreed in the deal.
Despite the bold Look East statements, Reserve Bank governor Gideon Gono last year burnt the midnight oil printing cash he used to buy foreign currency to repay IMF debts. Of late President Mugabe has been making overtures to the West through talk of “building bridges” with Britain.
The West has set conditions for any future engagement which are premised mainly on Zimbabwe observing democratic norms and principles — a big task from the current regime which has never admitted any wrong-doing in abridging citizens’ fundamental rights.
The decision to look east was based on the thinking that the Asian Tigers supported Zimbabwe’s disastrous land reform and human rights policies and hence aid would flow in without issues of democracy being raised. Zimbabwe can be assured of moral support from China on these “internal affairs”. That is about all there has been so far.
But despite extended periods of looking at the rising sun, President Mugabe’s government has not been blinded to the benefits of forging ties with the West. It has put out a US$277 million appeal for humanitarian assistance and we can be sure China’s contribution to that basket will not constitute the largest package.
It is the usual arch-enemies — the USA, the UK and other Western countries — that will show up when real friends are needed.
Mugabe could soon learn that those who burn bridges usually find it difficult to rebuild them.