Futility of economic diplomacy with no reforms

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GOVERNMENT has outlined a new performance scorecard for diplomats serving in several missions, which is anchored on economic diplomacy.

Foreign Affairs minister Sibusiso Moyo announced that diplomats who did not advance Zimbabwe’s economic agenda would be recalled. It is imperative for Moyo to note that the most important economic diplomacy makers are not only states and international organisations but also regional economic and financial organisations, specialised institutions, private companies, non-governmental organisations and other legal entities.

Issues of economic diplomacy are closely related to the economic security and economic strategy of the country.
Zimbabwe’s external debt reached 40% of gross domestic product as at end of 2017; most of which is in arrears (US$5,6 billion) and this has been an albatross on the economy.

Resolving the debt issues and re-engaging with the international community thus becomes paramount in economic diplomacy.

With no budgetary support and an unsustainable trade imbalance, there is no doubt that providing favourable conditions to trade and export development through economic diplomacy is required.

The settling of arrears has to be done in synchrony with the implementation of structural economic reforms that include enhancing investor trust and confidence, state-owned enterprises transformation, ease and cost of doing business and fiscal consolidation.

Diplomatic support in bilateral and multilateral negotiations plays a substantial role in international negotiations for formulating the position of the national agenda as well as mobilising assistance of possible partners on reaching a consensus or a compromise for developing solutions on key issues and providing participation of interested national economic agents.

The International Monetary Fund Staff-Monitored Programme (SMP) is one programme that our diplomats should be well-acquainted with during their diplomatic mission. Their message to the world should go beyond the “Zimbabwe is open for business” mantra.

The SMP is designed to support the authorities’ reform agenda. This programme will be monitored on a quarterly basis, and is intended to assist Zimbabwe in building a track record of implementation of a coherent set of economic and social policies that can facilitate a return to macro-economic stability and assist in re-engagement with the international community.

According to the IMF, economic policies under the SMP emphasise the restoration of macro-economic and financial sector stability through: implementing a large fiscal adjustment, the elimination of central bank financing of the fiscal deficit, and adoption of reforms to allow the effective functioning of market-based foreign exchange and debt markets.

Structural reforms include steps to reform and privatise state-owned enterprises, enhance governance, including in procurement and revenue administration, and to improve the business environment. The SMP also includes important safeguards to protect the country’s most vulnerable people.

With no political reform, many, if not all, diplomats will fail in carrying out their duties for the betterment of this country. — Econometer Global Capital.

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