AFRICANGLOBE – The just concluded auction of Marange diamonds at the Antwerp World Diamond Centre in Belgium did not only mark the opening up of the European Union market to Zimbabwean gems but also exposed the extent to which Zimbabwe has been prejudiced by illegal sanctions.The sale provided a pertinent case study that revealed Zimbabwe’s economic potential once sanctions are lifted.
Before the removal of EU sanctions on Marange diamonds, Zimbabwe used to market its gems to a handful of dealers. The market was severely constricted by sanctions. This was affirmed in a recent update issued by the Ministry of Mines and Mining Development Permanent Secretary Professor Francis Gudyanga, which noted that only 10 to 15 companies usually attended diamond auctions held in Zimbabwe.
The situation astonishingly took a better twist when the EU lifted its illegal sanctions against the Zimbabwe Mining Development Corporation, the Mineral Marketing Corporation of Zimbabwe and companies mining diamonds in Marange. This set the stage for the selling of Marange diamonds to the European market. Statistics from the recent auction of Marange diamonds at Antwerp showed that the diamond sale attracted 115 buyers.
Professor Gudyanga acknowledged that attendance at the auction was “extremely high in spite of the tender being held at such a short notice and so late in the year”. It is clear that Marange gems could attract more buyers than those who attended. And these permutations instruct us that the EU sanctions had immensely constricted the market for Marange gems. Their removal saw a phenomenal growth of buyers from 10 to 115, signalling the widening of markets for Zimbabwean gems.
Other positive spin-offs discerned from the removal of the illegal sanctions were better prices for the auctioned gems. Professor Gudyanga indicated that: “Prices were significantly higher than average sales in Zimbabwe, demonstrating the high potential of selling goods on Antwerp’s open market.”
Previously, because of the illegal sanctions, gems were sold at comparatively lower prices that resulted in a gargantuan loss of revenue that could have been used to revive the economy.
Illegal Western sanctions also contributed towards the opaque nature of transactions in the trade of Marange diamonds. Transactions were conducted in a shrouded manner due to the inherent desire by Government to circumvent the omnipresent sanctions trap. Opening up the transactions to the public glare could have exposed the vulnerable diamond buyers to the whims of the retributive Western financial systems. Consequently, and as a sanctions busting measure, all diamond dealings were done under high levels of confidentiality.
The secrecy attracted criticism from civil society groups and other neo-imperial detractors who tried to associate the privacy in the diamond trade with unsubstantiated corruption in the sector. The groups made shrill calls for transparency and accountability in the diamond sector.
Nonetheless, the lifting of EU sanctions led to the opening up of dealings in the trade of Marange gems. Immediately after concluding the Antwerp auction, Government announced that the trial tender achieved total sales valued at US$10.7 million. Government also announced the amount of carats sold, number of buyers attending the tender and the scale of prices at the tender.
This heralded Government’s new policy of transparency in the diamond sector. Related, during the 2014 Budget presentation, the Minister of Finance and Economic Development, Patrick Chinamasa, introduced surveillance mechanisms to improve and systematise transparency and accountability in the extraction and marketing of diamonds. This could not be done under the EU sanctions.
The benefits realised after the removal of the EU sanctions on Marange include betters prices and better markets for Marange gems.
These benefits served to starkly highlight the gravity of damage the lifted EU sanctions have caused on the economy. It provides a microcosmic peek into the debilitating effects of sanctions on the whole economy.
If the EU sanctions on Marange diamonds could have such a devastating effect on the economy, what will be the quantum of damage impacted upon the country by the combined force of all Western sanctions?
We are looking at the collective EU, US, Australia, Canada and other Western sanctions slapped against the whole economy.
Analysts have estimated that the country has lost over US$42 billion in revenue as a result of sanctions over the past decade. The effects are shattering and have resulted in the overwhelming revenue haemorrhage contributing to the current cash crunch and other economic ills.
Moreover, the removal of EU sanctions on Marange diamonds underscores the tacit acknowledgement by the European bloc that there is no longer any justification for maintaining sanctions against Zimbabwe.
The question is why should they lift sanctions from one sector and maintain the rest of sanctions in place?
The partial removal is a precedent that should compel the EU to completely lift all the remaining embargoes against Zimbabwe. It must also impel the US to repeal its sanctions law on Zimbabwe.
Under such circumstances, it would be sheer folly for one to argue that sanctions are merely “restrictive travel measures” targeted at a few ZANU-PF functionaries. It would be patently foolhardy for anyone to claim that there are no sanctions imposed against the country. It would equally be distracting to underplay the effects of sanctions on the economy.
One will shudder to think what could happen to honest steps by Zimbabweans to grow the economy under the inauspicious environment of sanctions. Already, the Confederation of Zimbabwe Industries is planning to send a high-powered contingent to Brussels from January 26-31 to engage the European Union in a genuine attempt to salvage the economy. Chances of this engagement bearing fruit under the milieu of sanctions are apparently remote.
It would be advisable for the CZI delegation to put sanctions on top of their agenda. The business contingent must call for the complete removal of the EU sanctions imposed against Zimbabwe. Failure to call for the removal of sanctions could undermine any business deals that they may seal with the Europeans.
The presence of sanctions could scuttle efforts to turn around the economy under the Zim-Asset blueprint. What Zimbabwe needs is not the partial lifting of sanctions as done by the EU but their complete and unconditional removal.
Going forward, all stakeholders in Zimbabwe should call for the complete removal of sanctions slapped against Zimbabwe. Local civic groups and political organisations that authored and invited the embargoes must take the responsibility and make the loudest calls for the removal of sanctions. Those who deny the existence of sanctions for political mileage or for any other depraved reasons are blatantly doing a disservice to the country.
Sanctions are a reality and they are hurting Zimbabwe’s economy. The partial removal of EU sanctions has shown that the embargoes were blocking markets for Zimbabwean gems and were similarly undermining prices at which the gems could be bought. If the partial removal of EU sanctions could deliver better markets and better prices for Zimbabwean products, imagine the potential that could be unleashed by the complete removal of all sanctions illegally imposed against Zimbabwe.
Countries that are maintaining illegal sanctions on Zimbabwe should give Zimbabweans a respite by removing them. They are not serving any purpose for Zimbabwe or for the countries maintaining them.
After all, nowhere in the world have sanctions worked for the betterment of any society. Examples abound in Iraq, Iran, Cuba and other sanctioned countries where the embargoes have had a destructive and destabilising effect on the targeted country. It has also been proven that illegal sanctions are at variance with the universal principles of sovereignty and territorial integrity of the besieged country.
By: Benny Tsododo