/ 3 October 2007

Western sanctions hurt the poor, says Zim

Zimbabwe set out Wednesday to demonstrate that Western economic sanctions were hurting ordinary people, the poor and even the unborn.

In its first detailed policy statement on sanctions, the central bank disputed claims from Britain and the United States that their ”targeted sanctions” — like travel bans on top officials — did not hurt most Zimbabweans.

The bank said that the country suffered from a broad range of ”declared and undeclared” embargoes that hit Zimbabwe’s weakest the hardest.

The drying up of development-project finance and hard-currency loans from international institutions has had ”far-reaching effects on the majority of the people since 2000,” the report said.

”Far from the claim that sanctions are … targeted on a few individuals, the reality on the ground is the tight grip of sanctions is being felt throughout the economy,” it said.

Western officials argue loan support, development aid and investment disappeared not because of sanctions, but because of fears about levels of risk — worsened by corruption, mismanagement and threats of property seizures — and concern over Zimbabwe’s human rights record.

Pregnant women were unable to obtain medication when necessary and lives were lost through the absence of hard currency needed for medical equipment, drugs and food, the central bank said.

”Three quarters of the equipment in hospitals in the city of Harare are not functional and this has had serious repercussions on the ordinary people,” it said.

The landlocked nation’s transport system was grinding to a halt, children were unable to get to school and workers walked to their jobs because of gasoline shortages.

It noted that US computer companies refused to sell equipment to a main university in eastern Zimbabwe, and ”the sanctions have thus spilled over” to technology critical for the learning of future generations.

Britain, the former colonial power, the US and other Western countries insist the sanctions they have applied to protest violations of human and democratic rights are travel bans on President Robert Mugabe and his inner circle and restrictions on their foreign-held bank accounts — measures designed not to affect the poor.

Singled out

The report listed among the sanctions the withdrawal of foreign lines of credit that sharply reduced export competitiveness and forced exporters to hunt for high-risk offshore financing for imported raw materials. It said the withdrawal of development aid programmes left only humanitarian aid, which had no long term benefit to the economy.

It said Western governments and taxpayers, the ultimate source of donor funds, were influenced to stop providing funding by biased Western media reporting on political and economic turmoil in the country since the chaotic and often-violent seizures of thousands of white-owned farms began in 2000, disrupting the agriculture-based economy of the former regional breadbasket.

Many charities and aid agencies closed down in Zimbabwe and even the World Health Organisation moved its regional headquarters out of Zimbabwe, the central bank said. Loans from the International Monetary Fund (IMF), the World Bank and the African Development Bank that kept the economy afloat stopped after 2000 in disputes over economic policy and loan-repayment arrears.

The report said that donor grants fell from about $140-million a year in the 1990s to about $40-million last year. Foreign direct investment went down from about $100-million a year in the 1990s to about $20-million a year since 2000.

Reserve Bank Governor Gideon Gono, in a fiscal policy review on Monday, alleged Zimbabwe was being singled out for punitive measures by the West and said half the developing countries supported by the IMF would be disqualified if they were ”judged in the same manner as Zimbabwe”.

The report said Zimbabwe’s growing budget deficit was financed from inflationary domestic bank sources and the central bank was forced to increase currency in circulation by about 1 000-fold since January 2006. Currency in circulation went up from a factor of 11 000 in 2006 to a factor of 12-million in July this year, the report showed.

The central bank has acknowledged printing extra local money to keep the economy running.

Zimbabwe suffers the world’s highest official inflation, at about 6 600 percent. Independent estimates put real inflation closer to 25 000% and the IMF has forecast it reaching 100 000% by the end of the year. — Sapa-AP