THE inclusion of two companies quoted on the Zimbabwe Stock Exchange on the United States sanctions list is an unprecedented development which has far-reaching ramifications on Zimbabweâ€™s political landscape.
Itâ€™s now always going to be difficult for the West to label the measures against Zimbabwe as targeted.
Diversified financial services counters Zimre Holdings and ZB Financial Holdings have been added to the list of companies barred from doing business with the US. They feature in a line-up which includes parastatals Ziscosteel, Zimbabwe Minerals Development Corporation, Minerals Marketing Corporation of Zimbabwe, Agribank and several other companies with links to government or Zanu PF. The justification for the inclusion of the organisations is that they have been propping up the government of President Mugabe or abetted the violence that ensued after the first round of polling in March.
“In light of the continued intransigence of the brutal Mugabe regime, the US is imposing further sanctions against this regime and its supporters,” said US Director of Treasuryâ€™s Office of Foreign Assets Control, Adam J Szubin. “These actions send a clear warning to those who would protect Mugabe and his assets at the expense of the Zimbabwean people.”
There has been an attempt to situate the sanctions as an instrument to ring-fence the talks between Zanu PF and the MDC. This is to assume that the sanctions have the desired effect of bringing positive change to Zimbabwe without hurting would-be beneficiaries. Sponsors of the regimen of sanctions since 2002 have argued that the measures form part of the countryâ€™s democratisation process. The inclusion of public-listed companies, parastatals and individual journalists however dilutes all mantras that sanctions are designed to immediately bring democracy and human rights.
There is the argument that including journalists is an attack on tolerance and diversity of opinion while including parastatals is clear evidence that these sanctions seek to cause suffering to people other than those perceived to be opponents. The collateral damage here is even greater considering the thousands of Zimbabwean shareholders in ZHL and ZB whose wealth is now at risk. It would be very hard for the US and EU to convince these shareholders, the thousands of people employed by the affected companies and communities they serve, that sanctions are being implemented to achieve a common good. Can we say those shareholders constitute a group “of those who would protect Mugabe and his assets at the expense of the Zimbabwean people”?
This is not to ignore the fact that government acquired its stake in ZHL through means which former key shareholder Mutumwa Mawere regards as an affront to the rule of law and an assault on property rights. Nicholas Vingirai can also surmise Finholdâ€™s (the forerunner to ZB) acquisition of Intermarket in the same light.
Government controls 63% of ZHL and 68% of ZB. Part of the government stock is held through NSSA which is a key investor on the stock exchange. But individuals and institutions who have bought stock in the companies did not do so in the hope of getting morsels of the ill-gotten wealth. Most, if not all of them, are honest investors whose motivation is not instructed by politics but by a need to create wealth for themselves.
Unless there are other issues at stake in determining the blameworthiness of the two firms to warrant being put under sanctions, there is a danger of making the devil look like a saint. Even in instances where the companies affected have little business interaction in the United States, this raft of sanctions can provide Mugabeâ€™s government with the fuel to power his anti-US propaganda.
He can now go to the communities around Redcliff for example and drive home the point that the US government wants to see the iron and steel plant closed, which would result in unemployment and destitution in the town. Or the government will one day ascribe the failure of agriculture to the failure by Agribank to give loans to farmers. How would the US defend this claim?
Also how would the US console punters with stock in ZB and ZHL when the share prices of the counters start heading south? The real danger here is that the sanctions can have the inadvertent effect of providing our government with ready-made excuses for failure. Our rulers have as always been searching for someone to blame for every obtuse move taken.
It is obvious that the choice of the organisations to place under sanctions is being influenced by information provided by local sources. These informants run the risk of becoming treacherous beings whose actions are influenced by selfish ends and not the quest to achieve positive change in this country. The MDC this week said they had nothing to do with the current sanctions because they concern sovereign states.
Sanctions, the US and EU say, are intended to send a message that electoral violence is unacceptable. That may be true. But they also give a hostage to fortune.