Zimbabwe’s economic imperatives may trump political divisions, as the country will need to normalise its international relations to secure much-needed investment, says a new Chatham House report.
Zimbabwe’s International Re-engagement: The Long Haul to Recovery argues that if the country is to salvage its crippled economy and attract investment, the government must demonstrate that Zimbabwe is a worthwhile business destination and credible partner. International re-engagement is a necessary part of this strategy.
The report, co-authored by Knox Chitiyo and Steve Kibble, contends that the government must reduce uncertainty surrounding the continuation of the multi-currency system and the implementation of indigenisation, and complete a full impartial land audit.
Victory in Zimbabwe’s June 2013 election re-instated President Robert Mugabe’s ZANU-PF party as the unitary force in the country, but ZANU-PF now faces the daunting challenge of what is becoming an 'emergency economy' as it faces a crippling liquidity crises.
Economic collapse is not inevitable but, if Zimbabwe is to avoid this outcome, the government needs to adopt policies to build international business confidence; support technocratic and entrepreneurial expertise at home as well as reaching out to a sizable and skilled diaspora population, encourage good governance and reduce inequality.
In February 2014 the EU suspended all sanctions against Zimbabwean officials except those on President Robert Mugabe and his wife Grace, as well as maintaining an arms embargo. The EU later temporarily lifted sanctions against President Robert Mugabe in order that he could attend the April 2014 EU-Africa summit.
But the President has decided to boycott the summit as the sanctions against his wife were not also lifted to enable her to travel to Brussels. The development of more pragmatic relations is essential for Zimbabwe, but the politics of re-engagement are not straightforward.
Although Zimbabwe’s ‘Look East’ policy and south-south partnerships will continue to develop, these engagements on their own cannot close the gaps that so threaten the economy.
The report argues that Zimbabwe’s government needs to re-engage in international diplomatic and business forums, including seeking to re-join the Commonwealth.
Equally, an international attitude of waiting for a change of leadership before normalizing relations is unnecessary. Western policy needs to move away from a particular focus on Zimbabwe and become more regional.
Policy options to recover Zimbabwe’s economy are limited: a decade of uncertainty has resulted in low levels of investment, a diminished consumer base and a reduction in the manufacturing sector. Corruption is also a major problem.
Zimbabwe’s International Re-engagement assesses these huge challenges facing Zimbabwe, but it also notes there are some positive indicators such as dialogue with the local and international business sector and other stakeholders on how to re-stabilize the economy and attract investment.
Notes to Editors
Read Zimbabwe’s International Re-engagement: The Long Haul to Recovery
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