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TABLE OF CONTENTS

INTRODUCTION ............................................................................................................................ 2

NATURE OF SANCTIONS ............................................................................................................. 3Economic Sanctions ........................................................................................................................... 3Trade Sanctions .................................................................................................................................. 3Financial Sanctions ............................................................................................................................. 3Undeclared Sanctions ......................................................................................................................... 4Arrears Triggered Penalties ................................................................................................................ 4

EFFECTS OF SANCTIONS ON ZIMBABWE............................................................................. 4Non Governmental Organizations (NGOs) ........................................................................................ 4

INTERNATIONAL RELATIONS .................................................................................................. 5International Monetary Fund .............................................................................................................. 6World Bank ......................................................................................................................................... 7The African Development Bank (AfDB) ............................................................................................ 8Socio – Economic Effects of Sanctions .............................................................................................. 9

SECTORAL EFFECTS OF SANCTIONS ..................................................................................... 9Balance of Payments: Impact of Support WithdrawalDue to Sanctions ................................................................................................................................. 9Access to Credit Lines ...................................................................................................................... 13Foreign Direct Investment ................................................................................................................ 14

FISCAL BUDGETARY SUPPORT .............................................................................................. 15Agriculture ........................................................................................................................................ 16Education .......................................................................................................................................... 16Transport ........................................................................................................................................... 16Health Sector .................................................................................................................................... 16Global Fund ...................................................................................................................................... 18Child Welfare .................................................................................................................................... 19Regional Cooperation ....................................................................................................................... 19African Growth and Opportunity Act (2000) ................................................................................... 19

IMPACT ON THE POOR AND VULNERABLE ....................................................................... 20

APPEAL TO ALL ZIMBABWEANS INCLUDING POLITICAL PARTIES .......................... 20

CONCLUSION ............................................................................................................................... 21

REFERENCES ............................................................................................................................... 22

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INTRODUCTION

1 Given the nature and the far reaching adverse effects of sanctions against Zimbabwe, the subjectmatter can never be repeated long enough, for as long as the sanctions remain in place.

2 The manner in which some sections of the world community want to swing global opinionagainst Zimbabwe does not reflect even an aorta of concern for the welfare and well-being of thegeneral population of Zimbabwe.

3 This reality becomes apparent when one analyses the true nature of these sanctions and theattendant effects on the economy and the generality of the Zimbabwean people.

4 Far from the claim that sanctions in Zimbabwe are ring fenced and targeted, on a few individuals,the reality on the ground is that the tight grip of the declared and undeclared sanctions is beingfelt throughout the entire economy. This is to be found in legal statutes, such as the ZimbabweDemocracy and Economic Recovery Bill, enacted by the US Government.

5 When one reflects at the vision and purpose for which Multilateral Financial Institutions (MFIs),such as the International Monetary Fund (IMF) and the World Bank were conceived back in1945, It becomes clearly apparent that these institutions are deviating from their foundingmandates.

6 MFIs were created to essentially ensure international financial stability, through provision ofbridging finance to countries experiencing temporary Balance of Payments (BOP) pressures.Under the weight of political persuasion and the tide of global supremacy, it is now evidentlyclear that the institutions have strayed from their core mandates.

7 Before the Watershed Land Reforms in Zimbabwe, the world was literally silent about theunsustainable imbalances that existed in the ownership and distribution of national wealth. Instead,the status quo was passively preserved, and in the process, breeding what could have degeneratedto a tumultuous state of affairs in the country’s socio-geo - political landscape.

8 Having realized their potential danger and acting in good faith on the basis of promises given toZimbabwe at the Lancaster House Conference in 1979, the country initiated a land reformprogramme, which triggered, the destructive seeds of hatred and demonization by the West, inthe form of declared and undeclared sanctions.

9 In order to fully appreciate the true nature of the sanctions against Zimbabwe, and how attemptsare being made to mislead the world, it is important that one appreciates the various forms ofeconomic warfare that have been visited upon Zimbabwe and its people.

10 Sanctions against Zimbabwe and indeed any other country are a declaration of war on a sovereignState, which puts the economy under siege, with debilitating downstream effects on the vulnerablegroups and civilians at large.

11 The economic warfare against defenseless countries manifests itself through the cancellation oflife-line projects, humanitarian assistance, and humanitarian infrastructural development support,which further exacerbates the plight of the impoverished.

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12 Regrettably, the aggravating impact of the weapon of economic sanctions has resulted indeteriorating standards of living, with per capita incomes in poor nations, being reduced to amockery, compared to levels obtaining in those countries perpetrating sanctions.

13 Sanctions, declared or undeclared, have regrettably claimed the lives of innocent children, thedisabled and physically handicapped, through denial of medical equipment, drugs, and food.

NATURE OF SANCTIONS14 Sanctions have traditionally been applied against certain countries to achieve desired political

and economic outcomes. These encompass the imposition of embargoes, trade and financialrestrictions, and diplomatic isolation.

15 In recent years, the coverage of sanctions has widened to include other elements that are notdirectly linked to trade and commerce such as culture and sports.

Economic Sanctions

16 Economic sanctions and their proxies are by far the most important of all sanctions imposed ona nation. In the main, they consist of the withdrawal, or threat of withdrawal of trade and financialrelations, including technical cooperation.

17 In an effort to refine the effectiveness of sanctions through disguised means, there has been ashift towards the so-called targeted sanctions, which impose travel bans and freezing of foreignbank accounts of targeted individuals or entities.

Trade Sanctions

18 Trade sanctions limit the country’s exports or restrict its imports. Trade barriers such as embargoesand quantitative restrictions are thus imposed on the country.

19 Countries such as South Africa, Iraq, and Rhodesia, had trade sanctions imposed against them,as the international community wanted to influence political changes.

20 In Zimbabwe, today, trade sanctions have taken the form of denied access to foreign lines ofcredit, which ordinarily finance external trade. The market for the country’s exports is alsoshrinking, as export competitiveness crumbles under adverse perceptions.

Financial Sanctions

21 Financial sanctions impede financial flows such as aid, short and long term loans, thus reducingforeign exchange flows to Zimbabwe. Financial sanctions also interrupt commercial and tradefinance, through reduction of both Government and private sector access to foreign loans.

22 In addition, sanctions attract high risk premium on offshore lines of credit, and eventually scareaway alternative creditors, as they anticipate a credit squeeze in the future.

23 Thus, without the imposition of explicit trade sanctions, financial sanctions, especially involvingtrade finance, interrupt trade, and ultimately constrain the economy’s foreign currency generatingcapacity, as well as economic activity in general.

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Undeclared Sanctions24 Undeclared sanctions are not explicitly announced but are implied from the actions of the

perpetrating nations.25 For example, some Non - Governmental Organizations have moved their operations out of

Zimbabwe, since the enactment of the Zimbabwe Democracy and Economic Recovery Act of2001. This Act outlines the scope of targeted sanctions on Zimbabwe by the USA.

Arrears Triggered Penalties

26 Due to Zimbabwe’s failure to honour its financial obligations to the IMF and the World Banksince 1999, the Bretton Woods Institutions suspended Balance of Payments support and technicalassistance to the country.

27 Such actions by MFIs are notwithstanding the fact that such BOP assistance would have unlockedthe country’s exporting potential, and create capacity for amortizing outstanding loans.

EFFECTS OF SANCTIONS ON ZIMBABWE28 Since the imposition of declared and undeclared sanctions against Zimbabwe, the effects of

these sanctions have been widespread and continuing.

Non Governmental Organizations (NGOs)29 The majority of NGOs receive funding from Western Governments. Accordingly, some have

realigned their policies in consultation with their donors.

30 As a result, some donors have either responded by withdrawing their programmes or frozenfurther development assistance programmes in the country.

31 Other donors, through various NGOs have continued to work in Zimbabwe but have changedtheir areas of focus and the modus operandi. Concentration of donor funding has now beenlimited to humanitarian aid and social issues, particularly HIV/AIDS, social protection and humanrights.

32 Humanitarian assistance is, however, short-term, and does not directly contribute to long termeconomic development and poverty reduction.

33 The NGO community in Zimbabwe is now faced with dwindling resources, as donor funds haveeither been severely curtailed or re-directed to other countries.

34 Initially, Official Development Assistance (ODA) was paid through the Government. Followingimposition of sanctions, the majority of NGOs now source ODA directly from donor organizations.

35 The National Association of Non-Governmental Organisations (NANGO) confirmed that aidmeant for Zimbabwe has also been diverted to other developing countries.

36 NANGO highlighted that, over the past few years, there has also been a major withdrawal ofdonor funding agencies. These pull-outs have resulted in closure and suspension of projectsfunded by NGOs.

37 The imposition of targeted sanctions has precipitated negative perceptions about Zimbabwe bythe world at large. These negative perceptions make it difficult for the private and public enterprisesto secure funding, as donor funding agencies are no longer willing to support projects in Zimbabwe.

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38 In addition, most funding agencies source their money from tax payers. Tax payers in donorcountries, thus retain the prerogative of directing funding of projects. Due to the negative publicity,foreign individuals have been unwilling to support Zimbabwe due to the bad publicity that thecountry has received. Notably, Denmark tax payers redirected funding to Zimbabwe fromdevelopmental projects towards humanitarian support.

39 In the aftermath of the socio-economic environment, created by sanctions, several NGOs anddonor agencies have or are relocating their offices from Zimbabwe to neighbouring countries.For instance, DANIDA and the Canadian International Development Agency (CIDA) pulled outof Zimbabwe in 2001 and 2003, respectively, terminating all projects in progress and retrenchingtheir employees.

INTERNATIONAL RELATIONS40 For the period 1980-1999, Zimbabwe enjoyed BOP support from the multilateral financial

institutions i.e IMF, World Bank and AfDB as shown in Table 1 below.

Table 1: MULTILATERAL FINANCIAL INSTITUTIONS DISBURSEMENTS (US$)

• IMF stopped supporting Zimbabwe by way of BoP support in 1999.• World Bank stopped supporting Zimbabwe by way of BoP support in 2001.• AfDB stopped supporting Zimbabwe by way of BoP support in 1998.

Source: RBZ and Ministry of Finance

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41 Following the country’s land reform programme, in 2000 which, triggered declared andundeclared sanctions against Zimbabwe, Multilateral Financial Institutions imposed sanctionson Zimbabwe in the following manner:

• Suspension of Balance of Payments Support;• Suspension of technical assistance;• Suspension of voting and related rights by IMF; and• Declaration of ineligibility to access Fund resources.

42 From 2000 to date, Zimbabwe has not received any BOP support from the MFIs and the countryhas been depending on domestic resources.

International Monetary Fund

43 After reviewing Zimbabwe’s overdue obligations on 25 September 2001, the Fund’s ExecutiveBoard declared Zimbabwe ineligible to access the general resources of the IMF. Zimbabwe wassubsequently declared ineligible to borrow the Fund resources.

44 As a result, Zimbabwe has not been receiving any disbursements from the IMF as shown infigure 1.

45 On 14 June 2001 the IMF suspended technical assistance to Zimbabwe and adopted adeclaration of non cooperation.

Figure 1:Graphical Fall in BoP support from IMF (US$M)

46 On 6 June 2003, IMF suspended Zimbabwe’s voting and related rights after determining thatZimbabwe had not sufficiently strengthened its co-operation with the IMF in areas of policyimplementation and payments.

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47 The Fund also initiated the procedure on the compulsory withdrawal of Zimbabwe from the IMFin December 2003.

48 The initiation of compulsory withdrawal from the Fund is the last and most severe in a series ofescalating measures the Fund applies to members that fail to meet the obligations.

49 The IMF recognized the severity of the decision at hand, the increases in payments from Zimbabwesince the last review in July 2004, and improvements in economic policy implementation. Onthe 16th of February 2005, the IMF decided to postpone a recommendation with respect tocompulsory withdrawal, providing Zimbabwe with a chance to continue improving economicpolicies and payments.

50 Regrettably, despite the clearance of the critical General Resources Account (GRA) in February2006, the IMF Board upheld sanctions on Zimbabwe.

World Bank

51 The World Bank has helped Zimbabwe to fight poverty and improve living standards. Todate, the Bank approved 19 International Bank of Reconstruction and Development (IBRD)loans and 14 International Development Association (IDA) credits for a total of approximatelyUS$1.55 billion.

52 The lending program to Zimbabwe is currently inactive due to a combination of accumulatedarrears and sanctions. Effective 2 October, 2000, the World Bank placed all IBRD loans and IDAcredits to, or guaranteed by, Zimbabwe in non-accrual status. As a result, Zimbabwe has notbeen accessing loans from the World Bank as shown in Figure 2 below.

Figure 2: Graphical Fall in BoP support from World Bank (US$M)

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53 The International Finance Corporation (IFC) also suspended funding of infrastructural and privatesector projects in Zimbabwe.

54 This was in accordance with the Bank’s policy of placing all its loans and credits to, or guaranteedby, a country in non-accrual status, if payment on any loan or credit is overdue by more than sixmonths.

55 The Bank’s role is now only limited to technical assistance and analytical work, focusing onmacroeconomic policy, food security issues, social sector expenditures, social deliverymechanisms and HIV/AIDS.

56 The World Bank, thus effectively imposed sanctions to Zimbabwe in the form of:

• Suspension of grants; and• Suspension of Infrastructural Development flows to both Government and private sector.

The African Development Bank (AfDB)

57 The Bank Group commenced operations in Zimbabwe in 1982. To date, the Bank group hasapproved 24 operations comprising of 20 projects and 4 studies.

58 Zimbabwe has been in arrears to the Bank Group since 1999. Following this development, theBank Group imposed sanctions on the country in May 2000 and subsequently stopped all lendingoperations in the country as shown in Figure 3.

Figure 3: Graphical Fall in BoP support from African Development Bank (AfDB)

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59 Although the Bank Group suspended normal lending operations, it pledged support in the formof capacity building activities.

Socio – Economic Effects of Sanctions

60 When targeted sanctions are directed against political leaders and Government officials of aparticular country, it is usually the vulnerable groups of society who suffer and not the targetedgroup.

61 Former United Nations, Secretary General, Kofi Annan once bemoaned the adverse effects ofsanctions, when he said ‘sanctions remain a blunt instrument, which hurt large numbers of peoplewho are not their primary targets’.

62 Sanctions, whether disguised in any form, ultimately resulted in health services, shortages ofdrugs, and high infant mortality rates. Innocent civilians were thus, adversely affected by thesanctions.

63 Sanctions have also had adverse and downstream social and economic effects on the Zimbabweaneconomy’s key sectors. Most of these effects have manifested themselves in shortage of foreigncurrency, resulting in the country accumulating external payment arrears and failing to importcritical supplies.

SECTORAL EFFECTS OF SANCTIONS

Balance of Payments: Impact of Support WithdrawalDue to Sanctions

64 From time immemorial, Zimbabwe has never gone it alone. Evidence at hand clearly demonstratesthat the country has depended in one way or the other on external support both in the pre-independence and post independence eras.

65 Prior to 1980, Zimbabwe was under sanctions and isolated from the international community.The economy was highly regulated, characterized by inward looking policies and trade restrictions.

66 Zimbabwe had no trade with the regional and international community, and the country hadlimited access to international finance. The trade restrictions compressed imports, resulting indeclining industrial productivity and shrinking exports.

67 However, an element of sanctions busting particularly by South Africa, provided avenues forexternal BOP support to the country.

68 In the 1980s, sanctions were lifted, creating opportunities for economic co-operation with theinternational community. The country was re-admitted into the international community, gainingaccess to international financial markets, multilateral financial institutions, donors, commodityaid programmes, foreign loans and grants.

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69 In 1980, Zimbabwe joined SADC, IMF, and World Bank. Government also developed severaldevelopment plans to attract external finance, to fund production.

70 Notable, Zimbabwe developed the Zimbabwe Conference on Reconstruction and Development(ZIMCORD) in 1981, the Transitional National Development Plan (1981). The First Five Yearand Second Five Year Development Plans (1982-1990).

71 These strategic plans assisted in mobilizing financial resources through soft loans and grants,and attracted investment in productive and export oriented sectors, resulting in trade expansionand an improvement in the BOP position.

Figure 4: Net Capital Flows (US$M)

72 In the 1990s, Zimbabwe embarked on the Economic Structural Adjustment Programme (ESAP),which was supported by the multilateral finance institutions.

73 The World Bank provided Structural adjustment loans, while the IMF provided Balance ofPayments support to the country. Additional support also came from bilateral creditors, NGOs,and other international organizations.

74 During the reform period, the country’s external sector position improved significantly due to anincrease in external resource inflows. In addition, the liberalization of the trade and foreignexchange regimes and access to external lines of credit resulted in an increase exports.

75 As shown Table 2 below, from 1966 to 1999, Zimbabwe registered capital account surpluseslargely in the form of project finance, as well as budgetary and balance of payments support.

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Table 2: Balance of Payments (US$M)

Source: Various RBZ Quarterly Economic Reviews

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76 Since 2000, however, the country started experiencing capital flight due to sanctions. Thisreflected the suspension of Balance of Payments support and project finance by the MFIs andother donors. Consequently, the capital account of the balance of payments has been registeringpersistent deficits, since 2000.

77 A combination of current account deficits and reduced capital inflows, resulted in excessivepressure on foreign exchange reserves, which, as a result, declined from US$830 million (3months import cover in 1996) to less than one month of import cover by 2006.

78 The attendant foreign exchange shortages severely constrained the country’s capacity to meetforeign payment obligations and finance critical imports, such as drugs, grain, raw materials,fuel and electricity.

79 Reflecting the shortages of foreign exchange there has been a significant build up in externalpayments arrears. At the end of 1999, total foreign payments arrears amounted to US$109 millionand have since increased significantly to US$2.5 billion by end of 2006.

80 This unfavourable development in the external sector has worsened the country’s creditworthinessas the country’s risk profile has deteriorated. This subsequently led to the drying up of traditionalsources of external finance from bilateral and multilateral sources.

81 The withdrawal of the multilateral financial institutions from providing Balance of Paymentssupport to Zimbabwe had a demonstration effect as some other bilateral creditors and donorsalso followed suit by either scaling down or suspending disbursements on existing loans for bothGovernment and parastatals.

Figure 5: Grant Inflows

82 Reflecting the scaling down of donor support, and developmental assistance, Grant inflows,declined significantly from an annual average of US$138 million in the 1990s to US$39.9 millionregistered between 2000 and 2006, as shown in Figure 5 above.

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83 Prior to this, the country had an impeccable record of prompt debt servicing and was highly ratedin the international financial markets.

84 The capital account, traditionally a surplus account, has been in deficit since 2000. This largelyresulted from the perceived high country risk by both multilateral and bilateral creditors. Assuch international investors preferred other countries for investment, thus depriving Zimbabweof the much-needed foreign direct investment.

Access to Credit Lines

85 Sanctions negatively affected the image of the country through negative perceptions byinternational financial markets.

86 Zimbabwean companies are finding it increasingly difficult to access lines of credit because ofthe perceived country risk. As a result, Zimbabwean companies have to pay cash for imports.

Figure 6: External Loan Inflows (US$M)

87 Loan inflows increased from an average of US$134.3 million in 1980s to US$480.3 million inthe 1990s. Reflecting the adverse impact of sanctions, loan inflows declined to an average ofUS$49.3 million between 2000 and 2006 (refer to Figure 6 above).

88 As a result of the perceived risk premium, the country’s private companies have been securingoffshore funds at prohibitive high interest rates.

89 This has had ripple effects on the country’s employment levels, and capacity utilization as reflectedby shortages of basic goods and services.

90 Declining export performance has also adversely affected the standards of living for the generalpopulace. In the unfolding worsening economic conditions, the country has experienced largescale emigration, especially of skilled labour, thus further straining the economy.

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Foreign Direct Investment

91 Foreign Direct Investment (FDI) is a key driver of economic growth in any developing economy.The purpose of FDI is to stimulate economic growth, and in particular FDI positively impacts onthe country’s Balance of Payments position.

Figure 7: Foreign Direct Investment Inflows (US$M)

92 The negative perception associated with sanctions has adversely impacted on foreign directinvestment to Zimbabwe as shown in Figure 7 above. Investors are, thus shying away fromeconomies that are perceived as risky.

93 Foreign direct inflows increased significantly from an average of US$8 million in the 1980s toan average of US$95 million in the 1990s. Due to the negative impact of sanctions, FDI declinedto averages of US$20.4 million in the new millennium.

94 Reflecting this, most multinational corporations such as Anglo-American have been stronglydiscouraged from investing in Zimbabwe by their home countries.

95 This has adversely affected investment levels into the country, thus, accentuating the foreignexchange shortages leading to shortages of fuel and imported raw-materials.

96 The shortage of fuel has had a debilitating impact on all sectors of the economy, leading to acontinuous decline in economic activity. This has generated additional inflationary pressuresand speculative behaviour in the economy.

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FISCAL BUDGETARY SUPPORT

97 In the last 10 years, Zimbabwe has basically been on its own. The country has also relied on theresilience of its economy and its people.

98 Due to declining external budgetary support, Zimbabwe’s budget deficit has largely been financedfrom inflationary domestic bank sources as shown in Figure 8 below.

Figure 8: Average Domestic Financing (Z$’000)

99 External budgetary support for Zimbabwe has completely dried up following suspension of loandisbursements for projects and BOP support as shown in Figure 9 below.

Figure 9: Average Foreign Financing (Z$’000)

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100 In contrast, most countries in Sub-Saharan Africa and elsewhere have continued to receive thebulk of fiscal budgetary support from the international donor community.

Agriculture

101 The country’s agricultural sector relied to a considerable extent on funding from the donorcommunity. The withdrawal of such support since the inception of the Land Reform Programnegatively impacted on the sector.

102 The Danish International Development Agency (DANIDA) supported the Agricultural SectorProgramme in the late 1990s to the tune of DKK 98.6 million (US$ 15.4 million).

103 The programme was aimed at:

i. Enhancing forestry extension services;ii. Development of an agriculture policy;iii. Development of a marketing information system;iv. Supporting irrigation schemes to small holders;v. Provision of training to smallholder farmers; andvi. Provision of direct support to farming households to assist them in income generating

activities.

104 The programme was suspended due to sanctions. The economy thus lost an opportunity to enhancefood security.

Education

105 The Education Sector Support Programme was established in January 1996 and was funded tothe tune of Sek 95 million (US$13.9 million), by the Swedish government.

106 The project facilitated the supply of text books, special education needs, construction ofschool buildings, capacity building and promotion of gender equity in education.

107 The Swedish Government did not fund any new programs in the education sector after 2000.Such programs would have gone a long way in benefiting the country’s education system.

108 In addition, Africa University is currently failing to access computers and related accessoriesfrom American Information Technology (IT) companies. The sanctions imposed on Zimbabweby the West, have thus spilled over to the country’s institutions of higher learning, by affectingtheir ability to procure modern technology, critical for learning purposes.

Transport

109 The Transport Sector Support Programme was funded by Danish International DevelopmentAgency (DANIDA), in April 2000. It was established to support the Transport sector with avalue of DKK380 million or (US$48 million).

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110 The programme was aimed at;

i. Rehabilitation and maintenance of the Harare-Nyamapanda and Kwekwe-Lupane roads;ii. Institutional support to the road sector; andiii. Labour based rural rehabilitation and maintenance of roads.

111 Had this programme been undertaken to completion, it could have created employmentopportunities and enhanced trade through efficient movement of commodities within the countryand the region.

112 In addition, the Labour-based Roads & Rehabilitation Works programme was established inOctober 1995, and was funded by the Swedish Government to the tune of Sek10 million or(US$15.1million).

113 The programme was aimed at rehabilitating 116km of roads as well as training indigenous smallscale road contractors. This was meant to enhance entrepreneurial skills and capacity buildingfor the rural population.

114 However, no new programmes have been put in place because of Sweden’s suspension of co-operation with Zimbabwe

Health Sector

115 DANIDA suspended Health Sector Support Programmes which were targeted at:

i. Supporting the provincial health service capacity building and policy issues to Ministry ofHealth & Child Welfare (MOHCW);

ii. Development of a gender strategy Support to HIV/AIDS activities;iii. Integration of Zimbabwe Essential Drugs Action Program (ZEDAP) to national laboratories;iv. Establishment of the health information system; andv. Support to the Health Services Fund Transport Management.

116 The project was established in May 2000, and it was valued at DKK 235 million (US$ 29.7million). The project was suspended as a result of the Land Reform Programme. The suspensionof the programme subsequently affected the general health of HIV/AIDS patients.

117 The Health Sector Support Programme, established in April 1997 by the Swedish Governmentwas funded to the tune of Sek 50 million (US$6.4 million).

118 The objectives of the project were as follows:

i. Improving water and sanitation;ii. Health education and conditions of the disabled; andiii. Prevention of the spread of HIV/AIDS related diseases.

119 Due to sanctions imposed on the country, the program was discontinued. Since 2000, no newprograms have been undertaken.

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120 Sanctions have indirectly resulted in the relocation of the World Health Organisation’s (WHO)regional offices to Congo Brazzaville, accompanied by retrenchment of Zimbabweans formerlyemployed by WHO.

121 The Kaiser Networks’ Daily Reports of 28th November 2004 and AFP News Agency reportedthat Zimbabwe’s grant application for funding for its HIV/AIDS programmes to the GlobalFund was rejected on political grounds.

122 Three quarters of the equipment in hospitals in the City of Harare are not functional and this hashad serious repercussions on the ordinary people.

123 In the backdrop of an already overburdened health delivery system, many Zimbabweans arefinding it difficult to access affordable health facilities and drugs, particularly antiretrovirals forHIV/AIDS patients.

124 The City of Harare Health Department immensely benefited from the various Joint ResearchProjects with international stakeholders. These projects have since been terminated.

125 The Department used to benefit from such projects since it took over equipment used duringresearches after the completion of research projects.

Global Fund

126 Zimbabwe has taken years of begging, kneeling and sweating for gaining access to the GlobalFund to fight Malaria, TB, and HIV/AIDS.

127 Global Fund is one of the biggest organizations in the world that provides funds to poor countriesto fight Malaria, TB and HIV/AIDS. Since the establishment of the Global Fund in 2002,Zimbabwe unsuccessfully applied funds to scale up its HIV prevention programs.

128 After a two year delay, the Global Fund approved a two year grant worth US$10.3 million inApril 2005. Zimbabwe’s applications for grants for HIV/Aids programs were rejected forunspecified reasons. Consequently Zimbabwe was unable to expand and roll out antiretroviraldrug distribution programs to rural areas.

129 The Global Fund also approved a US$ 65.2 million grant for Zimbabwe under Round 5 of itsprogram in December 2006. Under the fund, the National Aids Council received US$32.7 millionfor HIV/AIDS the Zimbabwe Association of Church Hospitals got US$3.19 million for HIV/AIDS and TB while the Ministry of Health received US$9.23 million and US$20.12 million forTB and Malaria respectively.

130 Zimbabwe’s application for funds under Round 6 of the Global Fund was, however rejected inDecember 2006.

131 Zimbabwe remains sidelined by other donor initiatives such as World Bank MAP initiative, USPresident’s HIV/AIDS initiative.

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Child Welfare

132 The Child Supplementary Feeding Programme was initiated in October 1995. The program wasvalued at Sek 10 million (US$ 1.25 million) and was completed in 1996.

133 The project was aimed at providing nutrition and health education for children under 5 years andstrengthening preparedness for future droughts. Although the Swedish government is stillsupporting the programme; funds for its Humanitarian Aid are now being channeled throughNon-Governmental Organizations.

Regional Cooperation

134 Sanctions are affecting the smooth running of regional groupings such as SADC and COMESA.

135 The European Union through the European Development Fund compensates COMESA memberstates for revenue losses suffered under the tariff phase down exercise under specific conditionswhich take into account macroeconomic policies and governance issues.

136 Zimbabwe has not benefited from the fund and this could affect, in the long term, its tariffreduction process in line with other countries in COMESA, thereby undermining regionalintegration initiatives.

African Growth and Opportunity Act (2000)

137 In 2000, the US enacted a new law called the African Growth and Opportunity Act, (AGOA).AGOA offers tangible incentives for African countries to open their economies, build free markets,and embrace political pluralism.

138 Those countries that adopt free market principles and are perceived to adhere to the rule of lawand respect human rights are, therefore, eligible under AGOA, to export a wide range of goodsto the United States duty free.

139 In a single year, the African Growth and Opportunity Act led to an increase in exports fromAfrica to the United States by more than 1,000 percent, generating nearly $1 billion in investment,and creating thousands of jobs.

140 This increase in trade included a diverse list of products, among them apparel, cut flowers, andprocessed agricultural goods.

141 Thirty-seven African nations have met the AGOA criteria and are eligible for the trade incentives.

142 Zimbabwe does not enjoy any preferential trade under AGOA because of the sanctions imposedon the country by the USA.

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IMPACT ON THE POOR AND VULNERABLE

143 Regrettably, sanctions imposed on the country over the past seven years have, resulted in thedrying up of project finance and balance of payments support. This negative development hashad far reaching effects on the majority of the people and manifested itself through the followingeconomic evils:

i. Denial of medication to the unborn child;ii. Poor rural folks not able to grind their maize;iii. School children not able to go to school;iv. Transport system grinding to a halt;v. Workers walking to work because of fuel shortages; andvi. Black outs due to electricity outages etc.

144 It will be naïve for anyone to hold the view that these disastrous consequences are only affectinga few targeted individuals. Evidently, the impact of the sanctions is being felt across the generalityof the Zimbabwean population.

APPEAL TO ALL ZIMBABWEANS INCLUDINGPOLITICAL PARTIES145 As Monetary Authorities, we call upon all Zimbabweans across all social and political divide,

from the youth, the clergy, civic organizations, the business community, labour, political parties,the academia and other interested groups to rise above party politics and speak with one voice.

146 Significant benefits accrue to the nation at large when all interested groups speaking with onevoice and these include:

i. Minimization of internal brawls that divert attention from substantive issues;ii. Creation of a regional and international understanding through sending a common trajectory

into the public domain;iii. Richer appreciation of the true Zimbabwean story, which, for long has been trampled upon

by some nations who in yesteryear were taking advantage of information gaps that existedamong Zimbabweans; and

iv. In the past, different pictures about the country created fertile ground for predatory forces totake advantage of the prevailing situation much to the detriment of the country.

147 All stakeholders should now gear their efforts towards mobilizing in-country as well asinternational support for stakeholders to rally behind this national cause.

148 The country is indebted to the Southern African Development Cooperation (SADC) through itssteadfast interests in recognizing the evils of sanctions under the banner that these are purelytargeted sanctions to a few individuals.

149 It is heartening to note that the various groupings who were previously in disagreement are nowaware of the evils of sanctions. As Monetary Authorities, we now call upon the regional andinternational community to rally behind this unity of purpose and complement the country’sdevelopmental initiatives.

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CONCLUSION

150 It is evident from the foregoing that sanctions imposed on Zimbabwe have adversely affectedthe vulnerable groups and the economy in general.

151 Significant progress that the country had made in the development of infrastructure, health andsocial service delivery systems has been severely affected by the imposition of sanctions.

152 The protracted foreign currency shortages that the country has been facing since 2000 havecrippled the operations of industry, which heavily rely on imported inputs for their daily operations.

153 Declines in the key sectors of the economy have occasioned high unemployment, an inefficienthealth delivery system, reduction in FDI and the drying up of balance of payments support.

154 Sanctions are partly responsible for the decline in economic activity over the last seven years.

DR. G. GONOGOVERNORRESERVE BANK OF ZIMBABWE

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REFERENCES

1. African Growth and Opportunity Act of 2000 in Trade and Development Act of 2000, USGovernment.

2. Bruce Bartlett (1985), “What’s Wrong With Trade Sanctions”, Heritage Foundation, the CATOInstitute.

3. Brzoska M in Drezner, D.W, (2003), “How Smart are Smart Sanctions”, International StudiesReview, Department of Political Science, University of Chicago.

4. Burci, G, 2002 “Legal Aspects of UN Sanctions” http://lcil.law.cam.ac.uk/Burci.doc

5. Bush G. W, “Millennium Challenge Account Initiative” (2004), US Government

6. Council Decision 2005/592/CFSP of 29th July 2005, Implementing Common Position 2004/161/CSFP, “Renewing Restrictive Measures against Zimbabwe”, Official Journal of theEuropean Union, European Union.

7. Drezner, D.W, 2003, “How Smart are Smart Sanctions”, International Studies Review,Department of Political Science, University of Chicago.

8. Elich, G. (2002) “Zimbabwe Under Siege”, www. Swans.com/library/art8/elich004.html.

9. EU Council Press Release (19 February 2004) Council Renews Targeted Sanctions againstZimbabwe, 5909/04 (Press 43), Brussels.

10. Gary Clyde Hufbauer, Jeffrey J. Schott (1985), “Economic Sanctions and US Foreign Policy”,Georgetown University.

11. http://www.american.edu/TED/iraqsanc.htm

12. Kofi Annan, 17 April 2000, “Excerpts of Secretary General of UN’s Introductory Remarksto the International Peace Academy’s Seminar on Sanctions”, New York City.

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13. Leonard Caurana and Hugh Rockoff (2000) A Wolfram In Sheep’s Clothing : Economic WelfareIn Spain And Portugal 1940-1944

14. Magaisa. T. A, (2005), Zimbabwe: “Sanctions, The Economy and Democratic Process”,.http://www.newzimbabwe.com

15. Robert Higgs and Charlotte Twight, (1987), “Economic Warfare and Private Property Rights;Recent episodes and their constutionality”.

16. Thomas Goltz, (2006), Crimes Of War Project 1999-2006: Pillage

17. Tom Gjelten, (2006), Crimes Of War Project 1999-2006: Sanctions.

18. UN Press release SC/6845", 17 April 2000, “Clearer Definition, Tighter Targeting of UNSanctions”, Global Policy Forum, UN Security Council.

19. Zimbabwe Democracy and Economic Recovery Act of 2001, 107th Congress, Senate and Houseof Representatives of the United States of America Congress, US.