Eric Bloch: How the West was lost

LAST week’s statement by President Robert Mugabe that Zimbabwe does not need the West, was economically tragic. 

On the one hand, the need for international aid is immense, and Western countries have continuously shown concern and tangible support for those in critical need of humanitarian aid.  On the other hand, substantive economic recovery has the prerequisite of substantial Foreign Direct Investment (FDI) and considerable inflows of lines of credit, and of supplier credit facilities.  Whilst humanitarian aid, developmental aid, FDI, lines of credit and supplier credit lines have been forthcoming from non-Western sources, the extent that they are provided from such sources is minuscule as compared to the magnitude of Zimbabwe’s critical needs.

Over 80% of Zimbabweans currently have incomes below the Poverty Datum Line (PDL), being the minimum resources to sustain themselves without endangering health.  Approximately two-thirds of those Zimbabweans are so grievously impoverished that they do not even have income at the level of the Food Datum Line (FDL), which is the minimum required to avoid malnutrition. As a result, hundreds of thousands, if not millions, are without housing, cannot afford essential healthcare, and are unable to fund education for their children.

These intensely distressing circumstances are severely exacerbated by the consequences of HIV/Aids and recurrent outbreaks of devastating diseases such as cholera.  Moreover, all of these abysmal circumstances are magnified by the shortage of basic food commodities, for the Zimbabwean government’s continuing decimation of the agricultural sector has contracted the production of maize, wheat, sorghum and other grains.

These dismal circumstances tragically render Zimbabwe desperately dependant upon international humanitarian aid, and that need is intensified by the run-down conditions of national heath services and educational resources, as well as government’s inability to fund social welfare to any meaningful extent.

For decades most international provision of humanitarian aid has flowed from the United States, the European Union, Commonwealth (as have developed, first-world economies) and other countries which constitute the Western world.  The provision of such aid from non-Western countries cannot be belittled, but nevertheless is limited when compared to that which has emanated from the West (and even so when the Western countries were writhing from the ravages of financial and economic recession).  Zimbabwean repudiation of Western support can only intensify exponentially the pronounced suffering and ills of most Zimbabweans.

It cannot be credibly contested that if the Zimbabwean economy is to be revitalised so as to attain comprehensive recovery, it will have to receive extensive FDI.  Investment is an absolute requirement for the establishment of extensive ventures to access and beneficiate the enormous, hitherto only marginally exploited diverse resources which Zimbabwe has.  Billions of dollars of capital, extensive technology transfer and development, access to international markets, and much else, is essential for the long-awaited economic recovery and development.  Much of that investment can be obtained from those non-Western countries as have strong economies, but that which can be forthcoming from those countries cannot possibly meet Zimbabwe’s full investment needs.

Similarly, Zimbabwe cannot conceivably obtain from only non-Western countries all the lines of credit that are necessary to infuse substance and vigour into the presently very emaciated money market.  Almost every Zimbabwean enterprise, be it engaged in manufacture, commerce, mining, tourism, agriculture or otherwise, is under-capitalised.  Capital resources of enterprise were pronouncedly destroyed during the 2008 hyperinflation era, and were then further reduced to minimal levels upon the February 2009 demonetisation of Zimbabwean currency.  Although Zimbabwe has obtained some lines of credit from non-Western sources, such as facilities from the China Export-Import Bank, it needs much, much more. The prospects of obtaining all the funding required from such sources are as lean as that of aliens from outer-space landing in flying saucers in Africa Unity Square!

All of these critical needs for sound, reciprocally constructive and respectful interactions with the West are compounded by the dependancy of any under-developed or developing country upon international institutions such as the International Monetary Fund, the World Bank, the European Investment Bank (EIB) etc, and Western countries wield much  influence upon those bodies, and contribute much of their funding.

 

In addition, Zimbabwe desperately needs developmental aid and technological inputs to rehabilitate its debilitated parastatals and infrastructure. This is especially so in respect of the Zimbabwe Electricity Supply Authority, National Railways of Zimbabwe, Zimbabwe National Water Authority, Air Zimbabwe, TelOne, as well as the many local authorities.  Again, some of that aid can come from non-Western countries, but the prospects of obtaining all the funding from such countries are wholly unrealistic.

Moreover, it is foolhardy to place all one’s eggs in one basket, and that applies to Zimbabwe seeking to access all its needs from only non-Western countries.  Illustrative of that foolhardiness is the extent to which at one time Zimbabwe perceived Libya as its financial saviour, which did not materialise.  Similarly, linkages with Malaysia were heralded as enormously beneficial to Zimbabwe, but linkages must work two ways and, when that country did not experience sufficient reciprocity from Zimbabwe, the strength of the linkage diminished, albeit that the two countries continue to have some positive and desirable economic interactions.

The recently government-promoted courtship of Iran will undoubtedly similarly prove to be an almost non-event, for understandably Iran will wish to receive, as well as to give.  Zimbabwe has some substantial economic interactions with China, but China’s expectations are justly not limited to philanthropic support, and the quid pro quos that it requires cannot possibly be such as will result in it meeting all that Zimbabwe needs.

The reality is that because the Western countries do not disburse unlimited largesse unconditionally, but expect that recipients of their aid, investment funding  and credit facilities, will honour and respect Bilateral Investment Promotion and Protection Agreements, and will ensure adherence to international norms of respect for property and human rights, law and order, and democracy.

Some of Zimbabwe’s political hierarchy has developed contempt for those countries.  That contempt is “how the West was lost”, and in Zimbabwe’s best interests, government must do the necessary and strive to develop mutually beneficial support with Western countries, whilst also looking East, North and South.

By Eric Bloch

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