Zimbabwe lacks policy clarity: Australian ambassador

DIPLOMATIC relations between Zimbabwe and Australia became frosty at the turn of the millennium when Harare embarked on a chaotic land reform programme and was accused of human rights violations and electoral fraud. Zimbabwe Independent reporter Kudzai Kuwaza (KK) spoke to the Australian ambassador to Zimbabwe Suzanne McCourt (SM) on the relationship between the two countries, the introduction of bond notes and the pace of reforms by the southern African country among other issues. Below are excerpts of the interview.


KK: How are relations between Australia and Zimbabwe?

SM: The relationship between Zimbabwe and Australia has many elements, which is one of the great things about working here. We have obviously government-to-government interactions. We have development cooperation programmes, which deliver water and sanitation services, economic development services and support to civil society. We also have a small grants programme where we can get Australian influence and good works right out to the most remote communities, which is a really fabulous thing. Australia has given US$10 million to the World Food Programme for the drought response of which a good portion will be coming to Zimbabwe. But we also have really strong people-to-people links.

Sometimes we see that through sporting collaborations. We have had a number of Australian cricket teams come here.

We also have Australians who are long-term residents in Zimbabwe and many Zimbabweans who are long-term residents in Australia and now many of them are Australians. That provides for a very fruitful and deep aspect to the relationships because there are interactions between church groups and school groups and individuals that we don’t necessarily even see and it adds to the broader relationship. I think there are a lot of natural connections between Australia and Zimbabwe which I find very interesting. We have a similar climate. We have a similar economy. Australia has an agricultural and mining-based economy with some elements of manufacturing which is quite similar to the Zimbabwean set-up. There are a lot of synergies and connections through that.

KK: How is trade between the two countries?

SM: In terms of trade, we would certainly like the trading relationship to be greater. I think that it is partly a nature of distance but it is also a nature of the potential in the economic relationship. I have certainly been quite consistent since I have been here to talk about my desire to see more Australian investment in Zimbabwe, particularly, probably as a start, in the mining sector because Australian companies work across Africa in mining including very close by in Zambia and the south of the DRC and Malawi and so we would like to see a lot more of that. The message I have given to the government and business here is that we would like to see more progressive economic policies that are more conducive to attracting foreign investment overall and in particular in relation to Australia. So, trade is a lot lower than it should be in my view.

KK: Where would you want trade between the two countries to reach?

SM: I do not want to put a numerical figure on it but I would like to see, as I said, Australian mining companies coming here and being involved in exploration and production. Of course, the whole mining sector across the world is depressed at the moment because of the commodity prices and so we have seen across Africa a reduction in Australian investment in mining. But this is a cyclical sector and we have no doubt that when commodity prices start to recover in copper and gold and other precious metals we will see an increased interest from Australian investors and producers in southern Africa. What we would like to see is them coming to Zimbabwe as well.

KK: Could this bilateral trade be improved given the widespread concerns over the investment climate in Zimbabwe particularly around areas such as indigenisation?

SM: As I mentioned, one of the key messages from me to government has been encouraging economic reform and change of policies in order to make it a more attractive investment environment. For example, in relation to Australian miners in Africa, this is a competitive environment. There are other countries which have more attractive mining regimes which make it easier and more attractive for Australians to invest there. For example, royalty rates are important, licensing processes and fees are important and long-term certainty in the investment that they are going to get to make profit through the course of that investment is also really important. One of the issues in Zimbabwe, and I have said this many times including to government, is certainty of policy is really important. So not only clear and publicly accessible policies that are advantageous to foreign investors, but also an assurance and confidence that these policies won’t change in the short term particularly in the mining sector where you need long term investors.

I think one of the key areas for Zimbabwe is the clarity on property rights in terms of agricultural development. At the moment, my understanding is that it is very difficult, for example, for an investment in the agricultural sector because of the inability for people to borrow from banks and for foreign investors to come and secure a lease. So that needs to be clarified before we can see any Australian investors in the agricultural sector.

KK: That brings me to the question of government’s ease of doing reforms currently underway. What is your view on this exercise?

SM: I am very encouraged by the work the government has done and I have been to a number of seminars where the government spoke about it and it is clear there is commitment to try to tackle some of these processes. I personally think more could be done because just the ability to set up a company and to get those licences are factors when a company is trying to work out whether to invest here rather than elsewhere. I will be interested to see if the special economic zones make a difference. Obviously they have not really started yet but they are legally constituted. So whether that will fall away or these challenges to starting a business fall away in the economic zones then we will able to compare the two scenarios. That will be very instructive to see how much of a difference that makes. But I can only encourage government to do more in terms of improving the ease of doing business but also getting the message out there about what they are doing. Having a lot of information on the internet, for example, so that somebody in Australia can actually make their decision about whether they think it is going to be easy to do business here. The other thing is to advertise opportunities, for example when there is a tender for a major project, making sure all that is publicly accessible so that an Australian company might actually think of putting in a bid for that.

KK: It is widely said that government has been coming up with a number of programmes but are found to be wanting when it comes to implementation. Do you agree with this view?

SM: It is a broad question. In relation to some of the ease of doing business reforms, I think they have actually implemented that. But there is a broader economic reform agenda that government spelt out in the Lima document in 2015 which related to Zimbabwe’s intended engagement with international financial institutions and I am disappointed that more progress has not been made in relation to that because those economic reforms will not only help the government resolve its issues with international financial institutions, but will create a more positive economic environment to encourage foreign and domestic investment. So I can only encourage the government to do more on that. The President (Robert Mugabe) in last year’s State of the Nation address spelt out his intention to commit to these reforms as well as in his ten point plan, so there is an agenda. It will be great to have more movement on implementation.

KK: The Reserve Bank of Zimbabwe recently introduced bond notes as a means to ease the liquidity constraints and incentivise exporters? What is your view on this intervention?

SM: I appreciate that Zimbabwe is in a difficult situation not having its own domestic currency to implement monetary policy and I have obviously been disturbed to see the reduction in access to United States dollars, which is really hurting the economy. One of the confidence building measures was the appointment of an independent committee to monitor the circulation of bond notes but that has not been set up yet even after they are now in circulation. But I think the big picture is not just about bond notes. The big picture is about the economic reform agenda and getting the economy back on track so that the liquidity problems, exports not being large enough, all these fundamental problems need to be addressed rather than just the symptoms of the problem.

KK: What is your view of the political situation in Zimbabwe in light of last year’s crackdown on dissent as more protests erupted?

SM: The Constitution of Zimbabwe is very clear. There is a right to peaceful demonstration. There is a very comprehensive list of human rights set out in that constitution which is the primary law of the land. We issued a statement back in August which we have referred to a number of times where we have said the use of violence is not acceptable under any circumstance and we are referring to any kind of political party or body involved in this violence you talk about and that is referring back to the constitution. We said that we wish to emphasise that the rule of law, respect for human rights, right to free speech, freedom of assembly and other freedoms are at the heart of the Zimbabwean Constitution and must be respected by all parties and we encourage that the government of Zimbabwe ensure that the democratic freedom of all Zimbabweans are fully protected.

KK: Zimbabwe promulgated a new constitution in 2013. There has been criticism that the process of aligning the laws to the new constitution has been too slow. Do you subscribe to this view?

SM: I would presume in any country that has just introduced a new constitution, the priority for a country is to make sure that its laws are in alignment with that constitution. I was not here in 2013 but I understand it was supported overwhelmingly by the Zimbabwean people. So it is a document that not only legally has status but democratically has a lot of support and so I think it is really important that all laws be aligned to the constitution as soon as possible. I know some work has been done on that. There was a large bill last year which covered a wide range of different elements of legislation but I would urge the government to complete that constitutional alignment as soon as possible particularly in the lead up to the 2018 elections. They have to make sure that all the elements of the electoral related law, not just the electoral law itself, but all related elements are aligned to the current constitution.

KK: A report by Chatham House in 2015 expressed fears of violence in the 2018 elections. Do you share those fears?
SM: I think it is probably not helpful for me to speculate at this time about what is going to happen in 18 months’ time. But I think as far I can see the Zimbabwe Electoral Commission (Zec) understands the need to be involved in regular dialogue with political parties about the process and that is the means by which we can avoid those kinds of situations where there is clear communication between the body responsible for elections and the political parties that are engaged. But of course I am conscious that it is not just Zec that is responsible for security around elections.

There is a whole range of stakeholders in that process so hopefully we will see over the next 18 months that dialogue occurs so that there is a clear understanding what the expectations are of the authorities, of the political parties and it is also clear what the political parties would expect in terms of their security. It is my view that you cannot have free and fair elections where there is widespread violence. It just won’t work.

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