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Chinamasa's Trafigura deal; a betrayal of the working people of Zimbabwe

by Tendai Biti PDP President
28 Apr 2017 at 20:03hrs | Views
The announcement by Minister Chinamasa that he has found the US 1,1 billion needed to pay what Zimbabwe owes to the World Bank should cause distress to any right thinking Zimbabwean.

The intended payment to the World Bank is being made in the context of an economy on its knees. There is massive deindustrialisation, absent aggregate demand, chocking expenditure outlays and a crippling banking crisis.

Since ZANUPF took over sole custody of the economy in 2013, the economy contracted by 30% in such a short space of time with unemployment reaching 95%.

At the same time poverty levels have increased, 75% of Zimbabweans are now living on less than US$1, 25 per day.

Recently AfrAsia financial Institute in a latest survey classified Zimbabwe as the poorest country on the African continent. We attribute this to the voodoo economics of Patrick Chinamasa.

The repayment of the loan to the World Bank is therefore criminally irresponsible and treasonous. The money would have been a major fiscal stimulus in the economy,injecting resources needed to resuscitate collapsing industries thereby creating much needed employment amongst the huge pool of the jobless poor in Zimbabwe.

Indeed the money should have been directed to the Distressed Industries and Marginalized Areas Fund (DIMAF), Zimbabwe Economic Trade Revival Facility (ZETREF) as well as major capital projects including rehabilitating the railway network.

Repaying the very rich World Bank at a time when 3 million Zimbabweans are receiving food aid is a shocking betrayal to the struggling masses of Zimbabwe .A shocking betrayal of our deep social democratic values and indeed the values of the Liberation struggle.

The payment of the money to the World Bank is in the context of the LIMA plan agreed in Peru on the 8th of October 2015.In terms of this plan the International Community agreed that Zimbabwe must pay the International Financial Institutions to be eligible for fresh funding.     

  • We argued then as we do now that the LIMA plan is a disaster which will not work. It is a disaster for the IFIs and the International community to engage Zimbabwe without structural reforms.
  • We maintain that Zimbabwe must attend to the following:
  • Reforming the wage bill which has ballooned owing to the ghost workers who are part of ZANUPF's election rigging infrastructure.
  • Rationalisation and retrenchment of the government expenditure which is dominated by executive travel abroad and financing of ZANUPF activities.
  • Crafting a new Mines and minerals act
  • Crafting a new diamond policy to deal with transparency, value addition and gem retention proportions.
  • Repealing the Indigenisation Act to promote Foreign Direct Investment and Capital in floors.
  • Address the cash, liquidity, currency and banking crisis crippling the economy.
  • We argued then as we do now that the LIMA plan would fail as there are no reformers in ZANUPF, it is therefore impossible to have reform without reformers. On this call we have been thoroughly vindicated.


On the political side human rights violations are on a rise, ZANUPF has re-introduced the training of its terror militias; in the past year many activists were arrested, tortured, with some abducted and injected with an unknown substance.   

It would be wrong, immoral, dishonest and criminal for the international community to engage Zimbabwe before clear evidence of an irrevocable process towards political reform.

In paying the World Bank without reforms Chinamasa thinks he can have his cake and eat it.

Our contention is that Zimbabwe must not be allowed to have any fresh lines of funding without attending to both political and economic reforms.

It is criminally irresponsible for the AfDB and the World Bank to accept payment from Zimbabwe given the levels of poverty in the country, the money could be put to better use.

By accepting such payment the IFIs are complicit ,aiding and abating ZANUPF's power retention agenda.

We are aware that the World Bank has in the past sided with dictators, recycling autocratic regimes on the African Continent and indeed Latin America. We appeal to the World Bank to stop these shenanigans.

The World Bank and others have for a long time been treating the people of Zimbabwe and its laws as cannon fodder.

The World Bank for instance knows that our Public Debt Management Act and Constitution require parliamentary approval before any debt contraction.

The World Bank also knows that the same Public Debt Management Act prevents government from contracting any debt which will cause total outstanding public and publicly guaranteed debt to exceed 70% of the previous year's GDP.

The World Bank should know that borrowing 1, 1 billion will increase our stock of debt to 120% of GDP something not permitted by our laws.

The World Bank must know that Zimbabwe needs debt sustainability; therefore it would be foolish to borrow through unsustainable rates to selfishly pay the same.

The World Bank would also know that highly indebted poor countries such as Zimbabwe cannot afford to borrow to pay off another debt. They need a sustainable program based on reform including a clean slate on human rights which will convince creditors to forgive and clear their debts.

Since 2004 the World Bank has been at the centre of the Multilateral Debt Relief Initiative, that has helped so many poor  African countries clear their arrears.

The World Bank would thus must be aware that it is creating a  special set of rules for Zimbabwe. Rules which will only benefit the clean shaven Robert Mugabe and his acolytes in Zanu. Rules which will cause further disequilibrium of the Zimbabwean economy. Rules which will further impoverish the Zimbabwean people.

 

In accepting the payment the World Bank must know that it is receiving preferential treatment against other creditors like the Paris Club where the bulk of Zimbabwe's debt is owed.

The World Bank cannot therefore be at the fore front of aiding and abating the violation of known international  finance rules in this case the pari passu rule which requires equal treatment of all creditors by a debtor.

The World Bank, if it had any conscience must be worried by the source of Zimbabwe's loan. It surely would be worried that no credible Bank or Financial House including much vaunted Chinese sources were prepared to back Zimbabwe.

Zimbabwe is sourcing a loan from a totally illegitimate and scandalous institution which over the years has been has been fingered in money laundering, corruption ,the aiding and abating of terrorism.

Trafigura is fingered in many scandals including arms deals, the oil deal blocked by President Sata in Zambia and the biggest toxic waste scandal in Abidjan.  

Trafigura was at the centre of the infamous Iraq oil for food scandal in which middlemen like it profiteered from the terrible humanitarian situation prevailing in Iraq pursuant to the fall of Saddam Hussein.

In 2006 it dumbed toxic waste in Ivory Coast causing deaths of 17 people leaving 30 000 others seriously injured.

As recent as 2016 Trafigura was accused by Swiss Non-Governmental Organisation, the Public Eye of selling toxic fuel to Africa with high levels of sulphur causing harm to people's health.

In Zimbabwe through corruption and collusion , Trafigura is now effectively controlling  Zimbabwe's US$1 billion per annum fuel industry. The World Bank will be aware how Trafigura has bought senior government officials including a Vice President and a powerful lady in the Zimbabwean set up to have this foothold.

The World Bank will also know that from as early as next year Zimbabwe will have to fork out US$ 400 million per annum to service this debt something which this government which cannot pay its salaries will be incapable of doing.

How the World Bank allows borrowing from such shameless cretins reflects being complicit and collusion on their part.

Indeed the World Bank ought to be ashamed of itself. It owes the people of Zimbabwe an apology

Trafigura and the World Bank must understand that Zimbabweans will never accept an arrangement meant to break its laws, the aiding and abating of a predatory regime.

Any future democratic government reserves the right to repudiate and will repudiate the odious debt to the people of Zimbabwe    

Zimbabwe needs a holistic debt strategy in the form of the Zimbabwe Accelerated Arrears Debt and Development Strategy (ZAADS) pursued during the government of National Unity. It does not require mendacity, duplicity and hypocrisy.

It does not require shenanigans from 1818 H Street in Washington DC, the World Bank's headquarters.

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Source - Tendai Biti PDP President

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