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Economic dilemma under Mnangagwa’s dogmatic foreign policy.

  • 3 weeks ago

 

Zimbabwe’s foreign policy has been for decades shaped by its liberation history, the Marxist-Leninist, and Mau Tse Tung’s thoughts and ideologies. Supported by the Soviet Union, the Patriotic Front, Joshua Nkomo’s Zimbabwe African People’s Union, and Mugabe’s Zimbabwe African National Union adopted scientific socialism. When Zimbabwe gained independence, it emerged as a socialist state. Her foreign policy principles were guided by the same principles that guided her liberation struggle. As such, at independence Zimbabwe aimed at moving toward “an egalitarian, democratic and socialist society.” She was “dedicated to the attainment of a socialist, egalitarian and democratic society”; hence she welcomed assistance from socialist states in her reconstruction and development efforts.

 

The collapse of the Soviet Union left Zimbabwe with no choice but to look to the West. Zimbabwe did not abandon the socialist ideology altogether; she maintained it, borrowed some of the capitalist traits, and fused them with socialism. Adopting the Economic Structural Adjustment Programme (ESAP) in 1992, Zimbabwe had a dual economy that included tenets of socialism and capitalism. However, the turn of the 21st century saw relations between Zimbabwe and the West deteriorating. This was due to the West’s reaction to Zimbabwe’s Land Reform Programme of 2000. As condemnation, demonization, and pressure from the West mounted, Zimbabwe reacted by looking for friendship and acceptance elsewhere. Friends and acceptance, she found in the East. The “Look East Policy” was officially promulgated by the Zimbabwean government in 2005 and has been the foreign policy stance of the Mugabe Regime until its downfall after a military coup in 2017. 

Robert Mugabe’s ouster as President of the Republic of Zimbabwe has led to a re-engagement, strategic rethink, and significant foreign policy and diplomatic shift. The “new” Mnangagwa regime inherited a country whose relations with the world were less than cordial. The international community, including the East, had grown weary of the Mugabe regime. As it is often referred to, the new administration has adopted the mantra of “open for business,” which has become its framework and foreign policy stance. The most interesting factor was that Mnangagwa had been Mugabe’s right-hand man since independence. And the volte-face has taken place despite ZANU PF still being the party in power. The Mnangagwa regime has sought to steer Zimbabwe towards a pragmatic foreign policy seeking new allies, maintaining ties with traditional ones, re-engaging those with whom relations had become estranged, and above all,placing emphasis on economic ties and promising to be bounded by international rules. 

The government tasks the Ministry of Foreign Affairs and International Trade to champion the re-engagement with the Western world and International Financial institutions from which the country had been estranged. The Mnangagwa regime rebranded the ministry to include International Trade to reflect the realities of its so-called new political dispensation of focusing on economic and trade diplomacy. Attracting Foreign Direct Investment, promoting Zimbabwe as a tourist destination, and engaging the Zimbabwean diaspora to contribute to the democratic development of the state become the ministry's mandate. Notwithstanding, what is scuttling FDI in Zimbabwe under Mnangagwa’s dogmatic foreign policy is the weak rule of law, continual human rights violations, policy inconsistencies, corruption, nepotism in public institutions, and shortages of foreign currency. Zimbabwe is open for business mantra failed to yield both global and domestic capital. 

 

Data sources on FDI show a rapid fall in the investment climate in Zimbabwe since the doon of the “new dispensation.” After a few years of international goodwill, FDI has begun to fall, decreasing sharply to $280m in 2019 after doubling to $745m in 2018 from $349m in 2017. Figures from the Reserve Bank of Zimbabwe (RBZ) show a further decline during the first half of 2020 to $71.2m compared to $111.6m recorded in the same period in 2019. While according to the UN Conference on Trade and Development, FDI inflows fell to USD194.0mn in 2020, from USD280.0mn in 2019 (and USD745.0mn in 2018). While if the modest improvements to the operating environment can uptick the FDI over the medium term, risks remain weighted to the downside given slow progress in human development and the continual human rights violations in Zimbabwe. 

Another factor to note is that following the completion of Zimbabwe’s Staff Monitored Programme (SMP) agreed with the IMF in March 2020; the government reverted to seeking international lines of credit without a genuine commitment to development. This perpetuates the rent-seeking behavior for which Zimbabwe has become infamous. Whether or not this perception is accurate is irrelevant; it manifests in a material lack of support for the Harare regime from international partners. The issues of poor governance, human rights abuses, and conflictive relations with the West are combined to estrange Zimbabwe from the international community. And the Western sanctions and ill-informed domestic policy decisions negatively impacted the Zimbabwean economy. 

Under Mnangagwa’s dogmatic foreign policy, Zimbabwe continues to be excluded from the African Growth and Opportunity Act (AGOA), introduced in 2000 to promote trade between Africa and the United StatesTo benefit from AGOA meaningfully, the regime must fulfill membership eligibility requirements, including improving its democratization process and observing human rights. The Mnangagwa administration is aware that Zimbabwe's economy will continue to suffer by not being a part of AGOA and in a highly globalized and intertwined economic environment. Part of the challenge is that since 2000 the country has remained an uncompetitive investor destination. International investors boycott it because of its inability to export to the US and other global markets competitively. Through its former Minister of Foreign Affairs, Dr. Moyo, the Harare regime met with then British Foreign Secretary Boris Johnson on the sidelines of the Commonwealth Heads of Government Meeting in April 2018, and discussions centered on Zimbabwe’s readmission into the Commonwealth. This was a departure from the previously held view, which saw it as a colonial vestige. 

The Minister also spoke at Chatham House, a prestigious British think-tank, where he once again stressed the “Zimbabwe is open for business” mantraApart from that, the mantra received less attention as Washington pointed out that the military which backed Mnangagwa’s seizure of power was behind state-sanctioned violence in the past. As one of Mugabe’s supporters, he was privy to these operations. The Trump administration was prepared to lift sanctions only if substantial reforms were made, and by now, under the Joe Biden Administration, the reforms have not yet been addressed. This has presented a conundrum for the Harare regime as it knows the importance of Washington, but instituting reforms may upset the military element within the government, which wields power and influence in the operations of the state. 

The Mnangagwa administration is keenly aware that Mugabe’s belligerent, bravado-filled, and verbally acerbic attitude, antagonizing the West and adopting a siege mentality, was economically disastrous to the country, isolated it, and made the Zimbabwe brand less than attractive to investment. The new strategy towards the international community was a break from the Mugabe policy of telling the West to “go hang a thousand times” as well as an indication of a new foreign policy direction of openness, dialogue, engagement, and a call towards business and capital to invest in Zimbabwe. Mugabe’spolitical grandstanding and rhetoric on the international stage damaged the Zimbabwe brand, and its standing in the international arena suffered and diminished. The future of Zimbabwe’s investment opportunities and investor attraction relies on its foreign policy.