THE sanctions imposed on Zimbabwe by the West and its allies continue to frustrate the country’s efforts to achieve meaningful investment due to negative destination perception, prominent economist and former Government advisor, Professor Ashok Chakravarti, has said.
Western countries have maintained economic sanctions on Zimbabwe since early 2000s when the country embarked on the land reform programme.
The United States went to the extent of promulgating the widely criticised Zimbabwe Democracy and Economic Recovery Act (Zidera) in 2001, which imposes heavy economic penalties on the country.
Prof Chakravarti, who met economic experts in Washington late last month, discussed the economic situation in Zimbabwe and explained how Zidera has crippled trade and commercial business growth in the country.
“Zidera does make a huge difference to trade and commercial flows but not legally. International markets do not work entirely on the laws in place, perception is also terribly important,” he said in a recent video recording released after the gathering.
Prof Chakravarti said the reason why General Electric (GE) Company from the US aborted their mission to invest in Zimbabwe was mainly because of the perceived risk of Zidera, not because the country lacks the best climate to conduct business.
“GE, a big electrifying company was in Zimbabwe a few months ago.
“They were interested in coming in and had their own financing and they came and had a look and they did not like the idea partially because we do not have the best investment climate but work is being done on that investment climate,” he said.
“They did not come majorly because of the perceived risk of Zidera and that is reality.”
Prof Chakravarti said the sanctions were hurting common people in the country, especially students who were learning abroad.
He said that it is hard for them to access cash from Zimbabwe as cash transfers from Zimbabwe were usually blocked by European banks.
“Some years ago we had about 40 correspondent banks that dealt with Zimbabwe.
“It is a fact that we have a half a dozen correspondent banks that are willing to deal with Zimbabwe because of Zidera, it has nothing to do with the laws in place,” Prof Chakravarti said.
Finance and Economic Development Minister Professor Mthuli Ncube, who was part of the delegation in Washington, also said sanctions were affecting ordinary people but applauded the warm gesture towards the country by previously hostile nations.
A prominent US academic, Prof Steve Hanke of Johns Hopkins University, a long-time critic of Zimbabwe, is also on record as saying that sanctions have achieved nothing besides making Zimbabweans suffer more.