Zimbabwe; with friends like the Chinese, who needs enemies?

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

After having a conversation with a colleague with regard to Zimbabwe's look East policy, I could not help it but repeat this topic here.

Last year, I wrote a piece titled "Chinese Imperialism in Zimbabwe" and was subsequently invited for a cup of green tea at their trade mission in Harare. We discussed what I had written and I was kindly encouraged to do some more research of 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 in who benefits from China's assistance. China could therefore claim that it is helping the poor but is actually helping Zanu-PF members in Zimbabwe.

I then gave an example of the farming input schemes where inputs 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 and increasing presence of Chinese and their products in Zimbabwe indicating that the relationship with China is in effect strengthening and this poses to us a serious danger.

The CZI continues to warn us that the proliferation of Chinese products here is actually not in the interest 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 can be further from the truth!

Let me share with my readers the simple economics;

In his book "Confessions of an economic hitman" John Perkins laid bared 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 and 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 which are not only monetary, but include an increase of its influence in Zimbabwe including preferential access to our mineral resources. The only difference with 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 USD150 million was awarded to the Chinese who are now sorting out our water issues in Harare. This USD150 million is not cash coming into our economy at all. A company in China bids for the contract to rehabilitate Harare water works and they get it because of their political influence in China and in Zimbabwe.

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

We have not been told what the specifics of the contract are and what the agreements on local content including the actual cost of the job to be done are. 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 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 favors to China by our politicians for services rendered in the past.

So the company comes here with everything it needs for the contract including labor 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 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 USD150 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 own local companies are operating below capacity. The Chinese company stays in business and pays wages in China and this has a positive impact on their economy and 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 ten to twenty years to come! We are indeed complicit in creating our own poverty.

Remember President Barrack Obama was strongly criticized for exporting American jobs to China in the last Presidential elections there. This is such an important issue and has a direct impact on any economy including ours.

So lets us 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 an all weather friend like this, who needs enemies?

What gets at 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. Indigenize, 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 boasting about it.
Oh what educated fools we have become!

Icho!

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