| UNIVERSITY OF PENNSYLVANIA - AFRICAN STUDIES CENTER |
Sierra Leone: Statements/Updates, 1 Date distributed (ymd): 000518 Document reposted by APIC
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Region: West Africa Issue Areas: +economy/development+ +security/peace+ +US policy focus+ Summary Contents: Despite the capture of rebel leader Foday Sankoh, it is unclear whether prospects for de-escalating the immediate crisis in Sierra Leone have improved. The fundamental problems of implementing a sustainable peace remain. Without consistent engagement of the international community, with adequate support for peacemaking, attention to accountability of all parties, and effective action to implement arms embargoes on illegal arms transfers, any improvement will be momentary. Sierra Leone still raises the fundamental question whether or not the world will break away from the double standard of second-class treatment for African crises.
This posting contains two documents: a press release and letter from Friends of Sierra Leone and Friends of Liberia, and an update on the humanitarian situation by the U.S. Committee for Refugees. Another posting sent out today contains statements by two Sierra Leonean groups, press releases by Human Rights Watch on the arms embargo and other issues, and pointers to other on-line sources on information with background and updates on the current crisis.
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Press Release For Immediate Release Date: May 14, 2000
Friends of Sierra Leone and Friends of Liberia Call for President to Exercise Leadership in Sierra Leone
Contact: For further information or comments, please contact Billie Day at 202 544 5063 or Kevin George at 202 251 1497. Friends of Sierra Leone may be contacted at fosl@erols.com or at P.O. Box 15875, Washington, DC 20003-0876. Friends of Liberia may be contacted at 703-528-8345 (voice), 703-528-7480 (Fax), (703) 525-0192 (FAX & Voice) or at Liberia@FOL.org (e-mail).
Friends of Sierra Leone and Friends of Liberia, organizations representing returned Peace Corps Volunteers, Sierra Leoneans and Liberians, today called upon President Clinton to "exercise leadership to avert a humanitarian and political catastrophe in Sierra Leone."
With 500 peacekeepers still held hostage, unprecedented barbarity against civilians, and the further diminishing of the stature of the United States in Africa, the "...consequences of failure in Sierra Leone justify a robust course of action by the United States that leads, first and foremost, to the restoration of security in Sierra Leone," said the organizations in their letter to Clinton.
With no troops on the ground, the United States "has a special obligation to provide strong financial and logistical support urgently need to transform the United Nations peacekeeping force (UNAMSIL) into a more effective peacekeeping force and deterrent."
Noting his role in "resolving conflict and threats to the peace in Bosnia and Kosovo ", the organizations declared that the President's "intervention is now critical to focusing international attention and resources on bringing Sierra Leone's misery to an end."
The complete text of the letter to President Clinton is below.
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May 14, 2000
President William Jefferson Clinton The White House
Dear President Clinton:
Friends of Sierra Leone (FOSL) and Friends of Liberia (FOL) urgently request that you exercise leadership to avert a humanitarian and political catastrophe in Sierra Leone.
We have seen a rapid and disturbing deterioration of the peace process in Sierra Leone over the past several weeks instigated primarily by the Revolutionary United Front (RUF). The RUF has attacked and murdered peacekeeping troops, stolen their equipment and held up to 500 peacekeepers as hostages. These actions by the RUF have undermined the effectiveness of the United Nations peacekeeping force (UNAMSIL) and its capability to protect civilians and deter factional fighting.
Clearly, UNAMSIL is not adequately prepared to cope with the current crisis in Sierra Leone. The Security Council expanded UNAMSIL's mandate in February pursuant to Chapter VII of the Charter to compensate for a vacuum created by the departure of ECOMOG, the West African regional peacekeeping force. Member States failed to contribute the means, particularly increases in military personnel, for UNAMSIL to fulfil its expanded mandate and to deter aggression. The RUF, whose desire for control of natural resources may exceed its commitment to peace, undoubtedly has taken advantage of UNAMSIL's limitations to keep control of valuable diamond mining areas that have fueled the banditry of the conflict.
What is the cost of failure in Sierra Leone? With fighters already primed by earlier stages of intense barbarity, we can expect the murder and mutilation of civilians on an unprecedented scale. Massive numbers of displaced persons and refugees will overwhelm neighboring countries requiring a dramatic increase in the need for international humanitarian assistance. Failure by the international community in Sierra Leone will also have a serious impact on the broader efforts of the United Nations to resolve conflicts in other areas of Africa. A resurgence of factional control in Sierra Leone will further destabilize an already fragile West Africa. The United States, with democracy and human rights as cornerstones of its policy on Africa, will have its stature diminished if it fails to fully support the peace process it has promoted for Sierra Leone.
The consequences of failure in Sierra Leone justify a robust course of action by the Unites States that leads, first and foremost, to the restoration of security in Sierra Leone and then a strengthening of the Lome Accords. We urge you to take the following actions to achieve these objectives.
1. Enhance Troop Levels and Peacekeeping Capabilities. We believe that the United States, with no troops on the ground, has a special obligation to provide strong financial and logistical support urgently needed to transform UNAMSIL into a more effective peacekeeping force and deterrent. Not only should the United States assist other governments to fulfill current troop commitments to UNAMSIL, but it should offer substantial support for the expansion of UNAMSIL beyond the 11,100 military personnel now permitted under its mandate. In view of the urgency of the crisis the Administration should continue to use its drawdown authority as needed to provide logistical support to UNAMSIL until other funds can be allocated from the budget.
2. Swiftly Develop Consensus on an Effective Assistance Package. Firm, substantial and timely commitments of support beyond your "drawdown" authority should back the commitment of the United States to peace in Sierra Leone. Your leadership and personal intervention with the leaders of the United States Congress are vital to the development of an effective assistance package. A logical starting point is to seek the release of the "hold" in the Senate of the ninety-six million dollars that is the United States' assessed contribution for peacekeeping in Sierra Leone. We also encourage you to actively promote passage by the U.S. Senate of the Sierra Leone Peace Support Act of 2000, passed by the House of Representatives on May 3 and referred to the Senate Committee on Foreign Relations. This legislation will provide funding for the disarmament, demobilization and reintegration of combatants and for a truth and reconciliation process in Sierra Leone.
3. Support Regional Peacekeeping Forces. The United States should encourage and support the accelerated contribution of troops from ECOWAS member states preferably as a component of UNAMSIL. Alternatively, if these forces compose a separate regional peacekeeping force, they should have a command and control system that is closely coordinated with UNAMSIL and monitored to ensure the observation of human rights by military personnel.
4. Protect Civilians. The United States should seek the strengthening of UNAMSIL's mandate, as amended by the U.N. Security Council on February 7, 2000, to give peacekeepers a clear duty to protect civilians, and identify, apprehend and detain violators of international laws of war and crimes against inhumanity.
5. Prevent External Support of Rebel Factions. The United States should take steps, including the imposition of international sanctions, against any government that is providing direct support to a warring faction in Sierra Leone or facilitating their trade of natural resources in contravention of Article VII, Section 6 of the Peace Agreement.
6. Give High Level Diplomatic Attention. We understand that you have dispatched Rev. Jesse Jackson, your Special Envoy for Africa, to West Africa. Rev. Jackson should deliver a firm message to the President of Liberia that the United States will no longer tolerate his support of the RUF. A visit to the region by Secretary of State Albright should closely follow Rev. Jackson's mission.
7. Appoint a Special Envoy A Special Envoy whose sole mission is to help resolve this crisis should be appointed as soon as possible.
Your leadership had a direct impact on resolving conflict and threats to the peace in Bosnia and Kosovo. Your intervention is now critical to focusing international attention and resources on bringing Sierra Leone's misery to an end. We hope that you make peace in Sierra Leone part of your legacy.
Sincerely yours,
Cynthia Barron, President, Friends of Sierra Leone
John Kucij, Chairman of the Board, Friends of Liberia
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FRIENDS of SIERRA LEONE
Friends of Sierra Leone (FOSL) is a US-based voluntary, not-for-profit organization dedicated to serving Sierra Leone. FOSL is non-political and supports all of Sierra Leone, regardless of ethnicity or region.
FOSL was founded by returned Peace Corps volunteers who had served in Sierra Leone in an effort to share news about Sierra Leone, and find ways in which they could contribute to the development of the country they served.
Their vision was to create an organization to include all persons - Sierra Leoneans and non-Sierra Leoneans - who are interested in the welfare of Sierra Leone. Today, FOSL has over 500 members around the world. About 65% are former Peace Corps volunteers; 25% are Sierra Leoneans and Sierra Leonean-Americans; and 10% are others who have worked, lived or studied in Sierra Leone.
FOSL strives to educate Americans about Sierra Leone's peoples, cultures and history. FOSL also supports small-scale development and relief projects in Sierra Leone.
FOSL's relief and development assistance is designed to respond to Sierra Leone's changing needs. Between 1991 & 1999, FOSL sponsored over six million dollars of relief and medical materials to aid refugees and displaced Sierra Leoneans - victims of a protracted rebel war.
FOSL advocates for America's attention to Sierra Leone issues via direct visits to congressional leaders & administration officials; and organizing nation-wide grass roots letter writing, & telephone campaigns. FOSL is widely regarded as a major advocate for Sierra Leone issues in the United States.
Funding for FOSL's development & relief projects comes from membership dues and donations from individual and/or group supporters. As a 501(c) (3) voluntary organization, FOSL members perform all tasks without pay.
FOSL may be contacted at fosl@erols.com or at P.O. Box 15875, Washington, DC 20003-0876
FRIENDS OF LIBERIA
Friends of Liberia (FOL) is dedicated to helping Liberians achieve peace, democracy and the reconstruction of their nation. The thirteen- year old organization, with the support of our 800 members, has conducted fact-finding missions, provided relief and medical assistance, implemented community-based reconstruction projects, trained Liberian teachers, built the capacity of Liberian nongovernmental organizations (NGOs), brought representatives of warring factions together in public forums and conflict resolution workshops, and advocated for effective policies on Liberia. Friends of Liberia's 34-member delegation observed the July 1997 election in Liberia.
Friends of Liberia is a tax exempt 501(c)(3) non-profit organization that is recognized and registered by the U.S. Agency for International Development as a private voluntary organization (PVO). We are a member of InterAction, the association of international humanitarian organizations, and affiliated with the National Peace Corps Association.
Friends of Liberia may be contacted at 703-528-8345 (voice), 703-528- 7480 (Fax), (703) 525-0192 (FAX & Voice) or at Liberia@FOL.org (e-mail)
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U.S. Committee for Refugees (USCR) Contact: Eleanor Bedford / Jeff Drumtra 202-347-3507 (office) 202-588-1068 (home). For more information, see USCR's website (http://www.refugees.org).
No. 4 Sierra Leone Humanitarian Situation: Update On a Rapidly Changing Situation May 12, 2000
Internally Displaced Persons: Situation Fluid
o An estimated 15,000 to 20,000 persons fled toward Freetown earlier this week, but many have reportedly returned home as British and UN troops have restored a sense of security to the capital, Freetown, and to nearby towns.
o New population movements in the country's inaccessible rebel-held territory remain unknown.
o Even before recent events, Freetown already hosted some 50,000 displaced people from previous years of conflict. Some 500,000 to 1 million people are internally displaced throughout Sierra Leone after ten years of war, according to widely divergent estimates.
Refugees from Sierra Leone: Large Flows Not Expected
o Approximately 500 refugees have fled from Sierra Leone to neighboring Guinea during the past week. Most new refugees settled into Guinea's long-established camps in Fourecariah. About 60 Sierra Leoneans refugees fled by boat to Guinea's capital, Conakry, along with some 400 Guineans and other African nationals who had resided in Sierra Leone.
o New Sierra Leonean refugees continue to assert that rebels in western Sierra Leone have blocked several thousand would-be refugees from fleeing into Guinea. Although aid workers do not expect massive new refugee flows, contingency planning is underway. Sierra Leone has already produced more refugees than any other African country.
o Refugee assistance programs in Guinea operated by the UN High Commissioner for Refugees already face a potential $8.5 million funding shortfall and lack adequate resources should a large refugee influx occur. Guinea already hosts some 300,000 Sierra Leonean refugees who fled to Guinea in previous years.
o Neighboring Liberia has reported no significant new refugee flows from Sierra Leone. Liberia already hosts some 90,000 Sierra Leonean refugees who fled to Liberia in previous years. Some might have been combatants in Sierra Leone. Unconfirmed reports allege that RUF rebels have attempted to recruit new combatants from Sierra Leonean refugees at Liberia's Sinje camp in the past week. Sinje camp is located about 25 miles from the Sierra Leone-Liberia border.
Population At Risk: Demobilized Child Soldiers
o The population currently most at risk in Sierra Leone is some 900 recently disarmed and demobilized child soldiers-many of them former rebels-living at special interim care centers scattered across the country. The young former combatants are vulnerable to attack and forcible remobilization by RUF rebels, and are fearful of pre-emptive attacks by both sides: pro-government combatants who regard the youths as RUF sympathizers, and rebels who regard them as deserters.
o About 150 former child combatants reportedly have fled 60 miles on foot from Lunsar to Freetown seeking protection. Officials hope to evacuate demobilized child combatants from Bo and Makeni towns when possible. Aid workers report that they are hard-pressed to find new locations willing to accept the children because local residents regard their presence as a security threat.
Food Security: Planting Season Disrupted
o Sierra Leoneans are not starving, and nearly 30,000 tons of relief food remain stockpiled in Freetown and government-held towns of Bo and Kenema. But the current conflict could trigger significant food shortages later if insecurity prevents farmers from planting new crops during the country's main agricultural planting season, which usually begins during May-June. The crisis has forced cancellation of scheduled distributions of seeds and tools.
o The current crisis has temporarily halted food deliveries to more than 200,000 beneficiaries.
o Even before the current security crisis, humanitarian aid organizations reported that they lacked reliable access to seven of the country's 12 administrative districts. In northern and eastern regions devastated by years of war, "food security in most communities [is] fragile and vulnerable," the UN reported prior to recent events.
[The U.S. Committee for Refugees (USCR) will continue to provide information and analysis of the situation in Sierra Leone as it unfolds. This is the fourth update issued by USCR since May 5.]
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Zimbabwe: Statements/Analysis, 2 Date distributed (ymd): 000514 Document reposted by APIC
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Region: Southern Africa Issue Areas: +political/rights+ +economy/development+
+security/peace+ Summary Contents: This posting contains (1) on-line starting points for background and analysis on the current crisis in Zimbabwe, (2) an article by Patrick Bond on the history and political economy of the crisis, (3) a statement by the Congress of South African Trade Unions (COSATU), and (4) a brief update on the economic situation from the UN's Integrated Regional Information Network. Another posting sent out today contains statements on the crisis from the Advocacy Network for Africa (ADNA) and the African Studies faculty of Michigan State University.
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Selected Web Links
E-Zim Current news and links http://www.e-zim.com
Zimbabwe government http://www.gta.gov.za
Movement for Democratic Change http://www.in2zw.com/mdc
Zimbabwe Mirror (SAPES) http://www.africaonline.co.zw/mirror
BBC Background and News http://news.bbc.co.uk/hi/english/in_depth/africa/2000/zimbabwe
Guardian Special Report http://www.guardianunlimited.co.uk/zimbabwe
APIC/ECA Roundtable Panel Zimbabwe's Farm Workers and the New Constitution http://www.africapolicy.org/rtable/ded0002.htm
Additional Newspaper and Background Links http://www.niza.nl/uk/press/zimcrisis.htm
Africa News http://www.africanews.org/south/zimbabwe
Additional Sources http://www.africapolicy.org/featdocs/southern.htm
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Zimbabwe's Crisis Showcases Reasons for Bank/IMF Protest
by Patrick Bond
>From ZNET Daily Commentaries, April 28, 2000 http://www.zmag.org
In Zimbabwe, President Robert Mugabe appears to have taken leave of his senses, potentially plunging his country of 12 million into civil war. What does this have to do with the mid-April protests against the World Bank and International Monetary Fund?
Confusingly, Mugabe excels in IMF-bashing, famously telling Fund staff to "Shut up!" late last year. Yet from independence in 1980 until quite recently, he followed their advice unfailingly. Indeed, just five years ago, Zimbabwe was Washington's newest African "success story," as Harare adopted economic policies promoted by Bank and IMF lenders, and even conducted joint military exercises with the Pentagon.
Things fell apart quickly. Southern African diplomats are shaking their heads in frustration at Mugabe's quick-shattering Good Friday promises--made to Thabo Mbeki and other local leaders--to tone down racial rhetoric, reverse land invasions of 1,000 white farms, and sort out financial matters with the Brits, IMF and donor governments.
Is Mugabe deranged, or instead playing out a tragic logic partially of his own making, but partially imposed from above? Under the very real threat of losing parliament to the labor-led Movement for Democratic Change in coming elections, he resorts to authoritarian populism: egging on a few thousand land invaders so as to restore memories of the 1965-80 struggle against Rhodesian colonialism, a period when his Zimbabwe African National Union (ZANU) truly represented a mass-popular movement dedicated to reversing settler-colonial land ownership.
Yet early on, perceptive ZANU watchers identified two major problems: the party's class character and its likely realignment towards foreign capital.
Political scientist Rudi Murapa (currently president of Africa University, Zimbabwe's second-largest) wrote in 1977 of an alliance between "a politically ambitious petit-bourgeois leadership, a dependent and desperate proletariat and a brutally exploited and basically uninitiated peasantry."
Forecast Murapa, "After national liberation, the petit-bourgeois leadership can abandon its alliance with the workers and peasants and emerge as the new ruling class by gaining certain concessions from both foreign and local capital and, in fact, forming a new alliance with these forces which they will need to stay in power. Of course, lip service commitment, a la Kenya, to the masses, will be made."
Accusations that ZANU "sold out" are justifiable, technically--given not only the steady rise in corruption, but the fact that most of the land and other wealth redistributed since 1980 has gone to cronies not the masses--yet are deeply unsatisfying. The same will be said of the African National Congress, as it was in Zambia of Kenneth Kaunda and likewise his successor Frederick Chiluba.
However, assailing petit-bourgeois acquisitiveness--which also motivated white Zimbabweans to loot their compatriots' land and labor beginning in 1890--risks downplaying the second factor: the role of global financial pressure.
Once anti-Rhodesia financial sanctions were lifted, Zimbabwe made bad policy choices and succumbed to armtwisting by Washington. Finance minister Bernard Chidzero (who later chaired the IMF/Bank Development Committee) borrowed massively at the outset, figuring that repayments--which required 16% of export earnings in 1983--would, he insisted, "decline sharply until we estimate it will be about 4% within the next few years."
The main lender, the World Bank, concurred: "The debt service ratios should begin to decline after 1984 even with large amounts of additional external borrowing." This was the economic equivalent of a sucker-punch, for in reality, Zimbabwe's debt servicing spiralled up to an untenable 37% of export earnings by 1987. Loan conditions quickly emerged. By 1985, the IMF pressured Mugabe to cut education spending, and in 1986 food subsidies fell to two-thirds of 1981 levels.
Similarly, genuine land reform was stymied not only by the "willing-seller, willing-buyer" compromise with Ian Smith's Rhodesians at Lancaster House, but by the World Bank's alternative: showering peasants with unaffordable micro-loans. >From a tiny base in 1980, the Bank's main partner agency granted 94 000 loans by 1987. But without structural change in agricultural markets, the Bank strategy floundered, as 80% of borrowers defaulted in 1988 notwithstanding good rains.
Analyst Ibbo Mandaza lamented in 1986, "International finance capital has, since the Lancaster House Agreement, been the major factor in the internal and external policies of the state in Zimbabwe."
Agreed Thandike Mkandawire, head of the Geneva-based United Nations Research Institute for Social Development, "It seems the government was too anxious to establish its credentials with the financial world."
The macroeconomic situation worsened when Chidzero persuaded Mugabe to ditch Rhodesian-era regulatory controls on prices and foreign trade/financial flows, liberalizing the economy through an Economic Structural Adjustment Programme (ESAP) in 1991. ESAP was supposedly "homegrown," but World Bank staff drafted much of the document, which was substantively identical to those imposed across Africa during the 1980s-90s.
ESAP brought immediate, unprecedented increases in interest rates and inflation, which were exacerbated (but not caused) by droughts in 1992 and 1995. As money drained from the country, the stock market plummeted by 65% in late 1991 and manufacturing output declined by 40% over the subsequent four years. Amazingly, the Bank's 1995 evaluation of ESAP declared it "highly satisfactory" (the highest mark possible).
More vulnerable than ever before, Zimbabwe's currency then came under fierce attack during the 1997 East Asian crisis, falling 74% during one four-hour raid after Mugabe joined the DRC conflict and paid generous pensions to protesting liberation war vets.
Reacting to growing unpopularity and two Harare food riots, Mugabe finally invoked three pro-poor policies in 1997-98: reimposition of price controls on staple foods, conversion of corporate foreign exchange accounts to local currency, and steep luxury import taxes. (He also foolishly cemented the Zimbabwe dollar's value too high.)
The IMF and donors are explicitly withholding hard currency until these three policies are reversed. So Zimbabwe spends its hard currency repaying foreign lenders, and can't afford to import petrol. The harder the economic pressure bites, the more Mugabe staggers politically.
What lessons from Harare? Evade hard-selling foreign bankers. More aggressively--and honestly--redistribute wealth and land. And avoid structural adjustment policies that worsen inequality, stagnation and vulnerability. Will leaders in the Movement for Democratic Change, and for that matter also in Pretoria, take heed?
Regardless, more protesters--including Harare's church-based, anti-debt activists--are joining the global campaign to shut the IMF and World Bank, precisely because of mounting evidence of this kind, from Zimbabwe and across the Third World.
- Johannesburg-based academic Patrick Bond is active in the Jubilee 2000 movement, and authored *Uneven Zimbabwe: A Study of Finance, Development and Underdevelopment* (Africa World Press, 1998) and *Elite Transition: From Apartheid to Neoliberalism in South Africa* (Pluto Press, 2000).
Patrick Bond email: pbond@wn.apc.org * phone: 2711-614-8088 home: 51 Somerset Road, Kensington 2094 South Africa work: University of the Witwatersrand Graduate School of Public and Development Management PO Box 601, Wits 2050, South Africa email: bondp@zeus.mgmt.wits.ac.za phone: 2711-488-5917 * fax: 2711-484-2729
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COSATU (Congress of South African Trade Unions) http://www.cosatu.org.za
COSATU statement on crisis in Zimbabwe. April 25, 2000
COSATU has been monitoring the events in Zimbabwe over the past few weeks with growing concern. It is crucial, both for that country and the entire Southern African region, that stability and the rule of law is installed in Zimbabwe.
We are once again distressed at the kind of coverage these events have got in the South African media. It seems that our journalists and editors are bent on covering this issue as purely a race issue. White farmers who have been attacked and killed have had a lot of coverage in our media, while we hear very little about black farm workers and black members of the MDC who have also been attacked and killed. We are not convinced this is purely a race issue. Do whites own all farms? Have any black farmers been attacked? What does the unity of white farm owners and black farm workers say about racism in that country?
Moreover, there has been little attempt to analyse why these events have started now, just before the Zimbabwe elections. Only a few journalists have looked at class issues surrounding these events. For example, what happens to the workers if farms are confiscated or occupied. Has there been any attempt to redress the land question and create tenure security for those who have lived and worked on these farms for a long time. Why has the land redistribution programme not been implemented after all these years?
We believe these are some of the crucial issues which should be raised in the media. We hope that journalists investigate these crucial topics, and refrain from creating a red herring leading us to believe the issue is narrowly one of black people attacking white people in Zimbabwe.
In the meantime COSATU condemns any acts of violence and unlawfullness. We call on the government of Zimbabwe to install peace and the rule of law to that country. We hope the issue will be speedily resolved.
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ZIMBABWE: IRIN Focus on a grim economic outlook
IRIN-SA - Tel: +2711 880 4633; Fax: +2711 447 5472; e-mail: irin-sa@irin.org.za
[This item is delivered in the English service of the UN's Integrated Regional Information Network humanitarian information unit, but may not necessarily reflect the views of the United Nations. For further information, free subscriptions, or to change your keywords, contact e-mail: irin@ocha.unon.org or Web: http://www.reliefweb.int/IRIN . If you re-print, copy, archive or re-post this item, please retain this credit and disclaimer.]
JOHANNESBURG, 3 May (IRIN) - As Zimbabwe's foreign payment arrears climb to an estimated US $400 million, economists told IRIN on Wednesday the economic outlook for the country remained poor in coming months.
Meanwhile, the Bankers Association of Zimbabwe met on Wednesday to find a way to enable an "unofficial" devaluation of the Zimbabwe dollar so that growers of tobacco, the country's key foreign exchange earner, will be able to make some profits.
Although they declined immediate comment on the outcome of the meeting, commercial bankers have said they realised that tobacco profitability had been seriously affected by the pegged rate of 38 Zimbabwe dollars to the American dollar. Zimbabwe is the world's third largest producer of tobacco
An easing of the exchange rate for tobacco
When the annual tobacco auctions opened last week, farm occupations, political violence and the exchange rate saw volumes of tobacco delivered for sale drop by over 60 percent, according to the Zimbabwe Tobacco Association (ZTA).
"This is also an issue which was discussed at yesterday's cabinet meeting on the current political situation," said Eric Bloch, a leading economist in Zimbabwe. "My view is that they want to get the tobacco floors to pay the farmers at the parallel rate of roughly 46 to 48 Zimbabwe dollars to the American dollar, so that the profit will go to the growers."
The official pegged rate, in force for 15 months, has been a source of complaint in all sectors of the economy, while bankers have said that they have been powerless to go against the wishes of the government.
Debt default
Bankers and economists have warned that the foreign payment arrears raises the prospect of Zimbabwe defaulting on its external debt of approximately US $4 billion.
"Although our import bill has been held back quite a bit in the last four or five months," said another Zimbabwe-based economist, John Robertson, "we might have to default. A devaluation is very necessary and it will cause inflation, now close to 60 percent, to rise." He said the official exchange rate had also had a negative impact on other key foreign exchange earners such as gold and ferro-chrome.
The danger of rising unemployment
"Zimbabwe is facing a very, very serious economic situation," he said. Robertson said the impact of the economic crisis on the industrial sector was bound to push up unemployment, currently at 55 percent, quite soon. "At this level it is dangerous and unemployment levels will become more dangerous if we allow this to continue. This is a very anxious time indeed."
The economists also cited concern that Zimbabwe could find itself unable to finance fuel imports agreed last month. In March, the state-owned national oil company of Zimbabwe owed foreign suppliers US $60 million, South Africa said its national electricity utility, Eskom was owed US $16 million.
Economic crisis likely to worsen in coming months
Bloch said the economic situation was likely to grow worse over the next three months until after the parliamentary elections when a new government, whether or not Mugabe's ruling ZANU-PF maintains its 20-year grip on power, will follow a more pragmatic programme.
"Instead of talking about recovery, a new government will have to concentrate on implementing an economic rescue package. That is what I hear lately from politicians of all shades, both in ZANU-PF and the opposition Movement for Democratic Change (MDC)," he said.
A road to recovery
They believed, he said, the road to economic recovery lay firstly in an end to Zimbabwe's expensive military intervention in the Democratic Republic of Congo (DRC); a cut in government spending by at least 25 percent; the privatisation of parastatal companies; incentives for expatriate business; investment incentives and a relaxation of expatriate employment rights, and an end to tight exchange rate controls.
"We would then see IMF payment support, a lifting of the World Bank's suspensions, as well as an end to the Danish and Dutch freeze on aid programmes," Bloch said. "Gradually lines of foreign credit could be renewed so that eventually we can get out of the foreign exchange trap we are in. Only then, after at least 18 months, will the international community begin to consider debt relief."
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Message-Id: <200005190200.WAA04032@server.africapolicy.org> From: "APIC" <apic@igc.org> Date: Thu, 18 May 2000 22:47:08 -0500 Subject: Sierra Leone: Statements/Updates, 1/2
Editor: Ali B. Ali-Dinar
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