With friends like these, who needs enemies?

2013-11-05 00:00

AFTER having a conversation with a colleague with regard to Zimbabwe’s Look East policy, I could not help but revisit the topic here.

Last year, I wrote a piece titled “Chinese imperialism in Zimbabwe”, and was subsequently invited for a cup of green tea at the Chinese trade mission in Harare.

We discussed what I had written and I was kindly encouraged to do some more research on the role that China has played in assisting Zimbabwe.

My main issue in that meeting was that since China prefers government-to-government deals or assistance, and given that the Zimbabwean government is partisan, this results in a situation where the government is selective when deciding who benefits from China’s assistance.

China could, therefore, claim that it is helping the poor, but it is actually helping Zanu-PF members in Zimbabwe.

I then gave an example of the farming input schemes, where inputs are distributed by Zanu-PF and preference is given to Zanu-PF members, and this denies needy communities the assistance they desperately require simply because of their political beliefs. So, in effect, China, through its assistance, strengthens the dictatorship in Zimbabwe.

Further to that, we have seen an increasing presence of Chinese and their products in Zimbabwe, indicating that the relationship with China is strengthening and this poses a serious danger to us.

The Confederation of Zimbabwe Industries (CZI) continues to warn us that the proliferation of Chinese products here is actually not in the interests of reviving our industry, and I concur. There have been various very large contracts awarded to the Chinese because they come with the funding, and this has been sighted as a positive development for the country. Nothing could be further from the truth.

Let me share with my readers the simple economics.

In his book Confessions of an Economic Hit Man, John Perkins laid bare to all of us how in the past, the World Bank was in effect an institution of regime change. It would fund large infrastructure projects to get developing countries into debt that they could not get out of. This would strengthen the influence of the World Bank, which could eventually lead to political change or regime change. All this was, of course, framed as aid.

In my opinion, we in Zimbabwe are getting into the same rut and seemingly enjoying it, or boasting about it.

China is funding our infrastructure projects for good returns that are not only monetary, but include an increase in influence in Zimbabwe, including preferential access to our mineral resources. The only difference from the World Bank is that they are not seeking regime change just yet.

Let me give you a very simple example.

A contract worth about U.S.$150 million (R1 523 775 000) was awarded to the Chinese, who are now sorting out our water issues in Harare.

This $150 million is not cash coming into our economy at all. A company in China bids for the contract to rehabilitate Harare Water Works and it gets it because of its political influence in China and in Zimbabwe.

The Chinese company then brings in as much equipment and piping and personnel from China as it can. I hear that even fridges are being brought from China, at a ridiculous cost, for the homes of the imported labour. Remember that Zimbabwe can manufacture fridges.

We have not been told what the specifics of the contract are, or what the agreements on local content are, including the actual cost of the job to be done. All the costing of the project is, therefore, done by China and I will not get into the issue of pricing here, but be assured that super profits are being made — in China, of course, and then some.

However, be assured that this must remain opaque and unclear, due to the nature of the clandestine political intrigues happening in Zimbabwe, and the need to return political favours to China by our politicians, for services rendered in the past.

The company comes here with everything it needs for the contract, including labour and even food. The benefits to Zimbabwe are therefore minimal. Local jobs are not created and our industry will not benefit by manufacturing the piping or the tooling required for the job.

This also means that the disposable income that could go into Zimbabwean pockets and be spent by locals here in Zimbabwe is minimal. We as a country lose out on the potential multiplier effect of such a contract.

So what has happened in effect is that the Chinese government has given the assistance, or the $150 million, to a Chinese company that then comes to Zimbabwe to do the job. Remember this is a “loan” to Zimbabwe. So the money must be paid back by ordinary Zimbabweans in the future.

There are no immediate benefits to Zimbabweans except clean water, we hope. However, our future income is being used to fund a Chinese company in China, while our local companies are operating below capacity.

The Chinese company stays in business and pays wages in China, and this has a positive impact on its economy but not on ours. We are exporting jobs to China and yet we have 90% unemployment here.

We ordinary poor Zimbabweans are, in effect, loaning the Chinese company money we do not have to do a job that we can do. We will also be paying it back over 10 to 20 years. We are, indeed, complicit in creating our own poverty.

Remember, President Barrack Obama was strongly criticised for exporting American jobs to China in the last presidential elections in the United States. This is such an important issue and it has a direct impact on any economy, including ours.

So let’s be very clear here: China is not helping us at all, but is helping its own people through us, and this relationship is being framed as helping Zimbabweans.

With a fair-weather friend like this, who needs enemies?

What gets to me is that we claim to be educated and intelligent, and yet we have a government that is mortgaging our future and exporting jobs to China. Indigenise, empower, employ and educate are increasingly sounding hollow aren’t they?

Now remember, this is just one contract. Imagine what is happening in the mining and retail sectors, just to name a few.

Imagine the impact of all the other deals we do not know about.

Zanu-PF is clearly complicit in the further underdevelopment of Zimbabwe and is boasting about it.

Oh, what educated fools we have become. — Politicsweb.

• Vince Musewe is an economist based in Harare and you may contact him at vtmusewe@gmail.com

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