China Wants It’s Loans Repaid before Giving More Aid
HARARE – Beleaguered Zimbabwean President Robert Mugabe’s circle of friends appears to be slowly shrinking amid revelations that his trusted Chinese comrades are beginning to demand more than the usual rhetoric and want to see tangible progress – and repayment of loans advanced. (Pictured: Chinese President Hu Jintao — Made it clear Harare and Beijing are “business partners” and not “friends”.)
Deputy Prime Minister Arthur Mutambara said despite the celebrated “all-weather” friendship between Harare and Beijing, the Chinese government had recently hardened its position regarding economic ties with Zimbabwe, insisting on clearance of loan arrears before releasing more aid. Mutambara said message was conveyed by Chinese President Hu Jintao and other senior Beijing officials during bilateral meetings with Zimbabwean officials on the sidelines of the just-ended World Economic Summit in Davos, Switzerland.
He said it was made clear to him that the two countries were “business partners” and not “friends”. “China has stopped working with us. The Chinese, though comrades, are not giving us any money until we clear our debts,” Mutambara told a meeting of chief executives held on the sidelines of last week’s international tourism investment summit in Harare.
Harare owes Beijing an undisclosed amount in unpaid loans given to the Zimbabwe Electricity Supply Authority (ZESA) and the Zimbabwe Iron and Steel Company (ZISCOSTEEL). Mutambara revealed that Zimbabwe had early this month paid US$5 million to the Chinese, being part of the ZISCOSTEEL debt. He said Jintao made it clear that while China would not publicly criticise the Zimbabwean government for its shortcomings, Beijing was unwilling to provide much-needed economic aid to Harare until “we do the right thing”.
“The Chinese have said ‘We’ll not condemn you publicly but we’ll not give you cash’. Unless we do the right thing the Chinese will not work with us,” Mutambara said.
A senior Chinese diplomat recently revealed that Beijing had slowed investment in Zimbabwe in a sign that it may be heeding Western demands that it quit backing regimes considered despotic. Zimbabwe has since 2000 strengthened its relations with China as part of a “Look East” policy premised on the need to find new trading partners and markets following the souring of relations with Western governments that protested President Robert Mugabe’s violent land-grab programme.
China soon became the investor with the fastest direct foreign investment growth in Zimbabwe, replacing the Western countries. The two countries have signed a series of agreements in infrastructure, tourism, energy and mining but the cooperation has largely not translated into an improved standard of living for ordinary Zimbabweans.
Harare has literally handed over control of most sectors of the economy to the Chinese during the past few years in return for short-term financial assistance to enable Mugabe’s government to ride one crisis after another. Analysts have however criticised Mugabe for mortgaging the country for the sake of short-term benefits. The withdrawal of economic support from Zimbabwe’s largest investor and only major global backer is a serious blow to Mugabe, an 86-year-old liberation hero who has clung to power in Zimbabwe for three decades.
Posted by Dave Fish Eagle
on February 21, 2010. Filed under Financial News,Main Headline,Zimbabwe Stock Exchange.
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