Mail and Guardian

'EU sanctions likely to isolate Zim's weak economy'

Harare, Zimbabwe

24 June 2005 01:43

Economists have warned that the recent extension of
targeted sanctions against Zimbabwe by the European Union (EU) is likely to
further isolate an already weak economy.

The EU bloc renewed its travel ban on ruling Zanu-PF party
officials last week and extended it to senior executives appointed by
President Robert Mugabe after his party's disputed victory in the March
parliamentary polls.

Deputy information minister Bright Matonga said that the
government was unperturbed by the EU decision, as the country had
successfully penetrated Asian markets.

"In our view, the sanctions are inconsequential: they have
never worked. We have established business contacts with Asian countries
through our 'Look East' policy, and if they [EU] think they can make us
dance to their tune they are certainly mistaken," said Matonga.

He accused the opposition Movement for Democratic Change
(MDC) of lobbying the EU to impose sanctions on Zimbabwe after losing in the
March poll. The MDC denied the charge, but has said it supports targeted
sanctions against Zanu-PF officials.

MDC economic advisor Eddie Cross said extending the travel
ban could mean a protracted economic crisis, and expressed scepticism about
the so-called "Look East" policy as a means of reviving the economy.

"For as long as there is no political will by Zanu-PF to
correct its political mistakes, the sanctions will always matter, and our
economy will plunge further," commented Cross.

His sentiments were reiterated by a Zimbabwe National
Chamber of Commerce (ZNCC) official, who said: "Government officials are the
ones who are supposed to be in the forefront of the struggle to resuscitate
the economy, and this they have to achieve through travelling and dialoguing
with their counterparts around the globe. Now, if they can no longer travel
and strike deals on behalf of the business community, then there is a
problem,"

Zimbabwe now conducts most of its trade with Asian
countries such as China.

The International Monetary Fund (IMF) and the World Bank
cut their balance of payment support to the country a few years ago,
alleging bad corporate governance, while the EU imposed targeted sanctions
on Zimbabwe in February 2002 after Harare expelled its election observer
team. -Irin