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Transforming rhetoric into reality

Dr Alex T Magaisa

THERE has been much hype about the so-called “Look East policy” from the government in the last few years.

erif”>The thrust of this policy appears to be that Zimbabwe must build alliances with, and increase trade links with countries such as China, Malaysia, Singapore, etc located mainly in South East Asia and the Far East. This is partly a response to political differences between the government of Zimbabwe and predominantly Western countries such as the USA and the UK which have strained relations and isolated the country which for some years has been trying to pursue Western-oriented economic policies. It is also a demonstration of the historical connections between the liberation movements whose leadership now constitutes the country’s government and the Asian countries like China, which were supportive. It may also be a recognition of the economic potential and opportunities in the emerging economies of those East Asian countries.

In this article, I argue that while the policy of building stronger economic relations with the East Asian countries is a commendable strategy, it is necessary to translate rhetoric into reality.

Secondly, we argue that the pursuance of such a strategy does not necessarily mean that Zimbabwe should ignore or break relations with the Western countries and institutions.

There is much substance in pursuing economic opportunities with the East. China has become one of the most powerful economies in the world with huge exports that surpass big economies such as the UK and France. With a fifth of the world’s population (a massive 1,3 billion people!) China has a huge reservoir of consumers, which makes it a much sought after market. Currently the sixth largest economy in the world, it is projected that in the next 10 years it will be in the top three, while in 50 years it may have overtaken the US economy. Undoubtedly, building connections with China and other Eastern countries with vibrant economies could bring vast benefits to the country in the long-run.

However, Zimbabwe must recognise that there is intense competition for these opportunities in China. The US and European giants recognised the importance of China a long time ago and over time they have been working on strategies to enter the Chinese market. They also recognise the competition that will result from the entry of the Chinese economic players. However, unlike most African countries, which place emphasis on rhetoric, these European giants have been doing and continue to do something about it.

According to the Financial Times, high profile leaders in France and Britain have been making frequent trips alongside top businessmen to China to build connections and open opportunities.

There is for example the 48 Group, a British business alliance whose mission is to assist British businesses to open economic channels in China. Clearly there is intense competition to enter the Chinese market and less talk and more action will make the Look East policy more effective. Indeed, while we castigate the West and proclaim the Look East policy, we must remember that we do not have exclusive rights to enter China. The so-called enemies, in response to whom Zimbabwe apparently took this policy, also have their own “Look East” policies and are probably ahead of us in exploiting the opportunities.

One interesting connection between the East and the Western states is in the higher education sector and in my view, this has implications in the economic arena as well.

Britain and the US are probably the largest hosts to thousands of students from China and other East Asian countries. The universities are filled with Asian students in all disciplines including business, law, engineering, etc.
Through academic fees and living costs they bring immense income to universities and local communities but more significantly these Western countries have an opportunity to create invisible exports through this system. Not only do the multitudes of students return to their countries with an appreciation and assimilation of Western cultures and values, but their education is also reflective of the Western world-view. These students are likely to be in positions of leadership in both government and business in the future and their connections with the places where they have received their training will be vital.

In my view, one must question whether Zimbabwe is pursuing any strategies to build similar connections that will be useful in the future. This is the same whether it’s with the East or other countries in Africa and elsewhere.
There was a point when our education system was highly regarded across Africa and the world and we could have easily become a leading centre at least in the sub-region. Through our institutions we could have recruited and trained foreign students who would have a long-term connection with the country. Zimbabwe could have enjoyed long-term benefits from the visible and invisible exports through such a system. That hope may be remote now but it is not yet lost.

In addition, the government’s insistence of the Chinese and other Eastern countries as being good friends sometimes gives the impression that these countries are keen to extend favours to Zimbabwe. The reality is that these are not necessarily charitable organisations. They, like the West are also seeking to build their economies, open opportunities and make profits. The governments may be friends but the businessmen and women are competing on the same global stage with their Western counterparts and are seeking to expand their markets beyond China to enhance profits. Some excess products will find their way to open markets. That is perhaps why Zimbabwe is awash with cheap Chinese products while there may be limited exports from Zimbabwe to China.

Ultimately, our Look East policy might produce the very same problem from which we are running, whereby Zimbabwe and other African countries have little access to the Western markets while the Western companies can dump excess and cheap products on our markets.

China and other East Asian countries are not as paranoid about the West as Zimbabwe has become in the last few years. There may be good cause to be critical of the dominant Western countries whose trade policies often negatively affect developing countries’ economies. However, even China itself realised that it had to join the powerful World Trade Organisation, which has overall authority on the global trading systems. China is becoming a leading decision-maker on the global stage and the Financial Times newspaper recently reported that even the powerful G8, the rich industrialised nations’ club is courting China to become more actively involved in its activities.

One can see a deliberate and calculated attempt to woo China and in the long-run China may respond positively in order to occupy a position of influence to protect its own interests. It does not necessarily follow that because there are disagreements on one front, a country should pursue a policy of isolation. A policy of constructive engagement and positive action will do much to assist the country out of its present predicament. Otherwise while we turn away from the West and look East, the East itself is actually constructively engaging with the West. Where then does Zimbabwe find itself in all this?

Zimbabwe needs to identify its key strengths and research about the opportunities in the East. Having identified those strengths and opportunities the country can calculate strategies of entering into that market more competitively. There is no reason why the government should not be more supportive of companies such as Econet Wireless, which has made several in-roads in different countries.

The East is very strong in technology and helping our companies to build partnerships and open business links will benefit the country substantially.

China is the world’s largest consumer of products such as iron and steel because of its booming construction industry. Given that Zimbabwe is endowed with iron ore and has in Zisco a potentially large steel manufacturing company, surely this is one of our key strengths that we can utilise to fight for a share in the Chinese market.

While tourism is generally a strong point, because of the country’s image it is not one of the major selling points at present and it is too dependent on individual choice and interest. As long as we sort our image problems, I am sure the usual European tourist market will be available.

We have not created the necessary goodwill to enhance our tourism potential. Even after the catastrophic Tsunami, more Europeans will soon be travelling to East Asia before they begin to visit Zimbabwe and there is currently a large Western effort to rebuild confidence in the East Asian market.

It is the Europeans that constitute the bulk of the tourist market and just as the East to whom we are looking, we should be doing more to enhance our image by rebuilding our political environment which is currently considered to be a huge risk.

In conclusion, there is much to commend about having an interest in the East but it does not mean that we should completely ignore the West. It cannot be ignored because whether we like it or not, the Western countries and institutions wield great power in the global economy.

The best strategy is constructive engagement which even our friends in the East are pursuing with the West despite their differences. Our friends in the East will not always offer us charity — they are also in it for the profits.

In the same way that we want the West to open their markets we must also insist on and take active steps to open and access the Eastern markets. The West is also making huge in-roads into that market while taking active steps to build strategic and positive relationships to build and safeguard their interests.

We cannot afford to spend time on rhetoric — rather, time and effort should be spent on identifying our strengths and ensuring that as much as we want the Chinese to invest, we must also have opportunities to enter their markets. Otherwise we will become net importers of cheap products which will only do harm to local industries.

Many countries build relationships with their key entrepreneurs yet it seems, the few that we have in African countries are unnecessarily hounded out and end up establishing bases elsewhere. If the Look East policy is to bear fruits, more positive action needs to be taken at these early stages.

*Dr Alex T Magaisa is the Baker & McKenzie lecturer in corporate law at The University of Nottingham. Contact at alex.magaisa@nottingham.ac.uk

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