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Mugabe Sells Bankrupt Zimbabwe's Assets to China

With a highly unsavory international reputation and one of the world's most sluggish economies, Zimbabwe and its leader, Robert Mugabe, have very few cards left to play. One of those cards is its natural resource wealth. As a result, China has been willing to trade with the otherwise isolated African country. Though details of Mugabe's recent talks with Chinese President Hu Jintao remain sketchy, insiders say that Zimbabwe will exchange large amounts of gold and tobacco for Chinese military equipment. In addition, Chinese public landholding companies have taken over the management of Zimbabwean farms that were confiscated from locals in Mugabe's infamous "clean out the filth" resettlement program. With Chinese goods flooding the country and with Chinese money bolstering Mugabe's regime, Zimbabwe's financial prospects may improve; its international standing, however, is unlikely to change for the better anytime soon. – YaleGlobal

Mugabe Sells Bankrupt Zimbabwe's Assets to China

Rochelle Mutton
The Age, 1 August 2005

"We will never be a colony again!" This has been the catch-cry of Zimbabwe's President Robert Mugabe throughout his 25-year reign.

But while he rails against perceived imperialist, colonial agendas and denounces anything white-skinned or Western, Mr Mugabe has spent this week in China signing over his bankrupt country's resources to the Asian economic superpower.

Analysts claim the Chinese are forging a "colonial extractive relationship" with Zimbabwe, which has sold forward more than a year's worth of gold and tobacco production in exchange for Chinese military hardware and diplomatic support.

Zimbabwe is the world's fastest shrinking economy and as it looks east for a saviour, China has a keen eye on the southern African nation's rich platinum deposits.

During a six-day visit to China this week, Mr Mugabe, banned from Western countries including Australia, was warmly greeted by Chinese President Hu Jintao as "an old friend" and given a professorship.

But as Mr Mugabe turns to the Chinese to solve Zimbabwe's $US4.5 billion ($A5.89 billion) debt migraine, commentators such as University of Zimbabwe's Professor Brian Raftopoulos are concerned the relationship will cost Zimbabwe dearly.

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"The Chinese have a huge interest in extractive industries everywhere. Their influence is certainly growing in Africa, not just in Zimbabwe but Angola, Sudan and elsewhere," he said yesterday. "But of course it will be at high cost to Zimbabwe. It's almost a colonial extractive relationship that seems to be developing."

While Mr Mugabe was coy about the exact nature of his deals with the Chinese, Zimbabwean economist Eddy Cross claimed yesterday the Zimbabwean Government had forward-sold precious gold and tobacco to "pay" for Chinese-made military consignments that included 12 jet fighters, three 60-seat turboprop planes and 700 troop carriers.

"We put the total of those transactions at about $US480 million and that was a cash deal that was done at the beginning of this year," Mr Cross said.

"And to fund it the Government sold 25 tonnes of gold forward, speculatively, at a set price. We used to produce about three tonnes of gold a month. And they also sold some of the tobacco forward and the balance was found in cash."

Zimbabwe has been condemned by the United Nations and Western countries for its two-month old demolition campaign Operation Murambatsvina — or "clean out the filth" — that has left 700,000 people homeless and affected a further 2.4 million.

Described in a UN report as a disastrous venture with enormous humanitarian consequences, the action was believed to be retribution for the huge support for the opposition in the urban areas during the March elections.

Starting on May 19, police spent weeks destroying the informal markets and homes of the urban poor, and are now rounding up these devastated masses and forcing them into holding camps. After a hasty screening, they are dumped hundreds of kilometres away, in the far reaches of the drought-stricken, landlocked country.

Yet while the booming informal trading sector has been razed and goods either confiscated or destroyed, every Zimbabwean city is awash with cheap Chinese goods, from glassware to clothing and trinkets.

Government contracts are awarded to Chinese businesses for major works such as hospitals and bridges.

Mr Cross claims Chinese interests have also been given farms, from which some white Zimbabwean farmers were evicted allegedly on the basis of redistribution to landless blacks.

"The Chinese have been granted the rights to develop 100,000 hectares of irrigation land in the Mwenzi area, about 450 kilometres south of Harare," he said.

"Also, they have been looking at a set of farms in the Banket-Raffingora area and these are farms on the Hanyani River and they constitute some of the largest farms in the Mashonaland area.

"Settlers (newly established black residents) are being removed from those properties right now. Apparently this is what was agreed in Beijing, that the Chinese are going to take these properties over — and Chinese State farming organisations are actually going to run them."

Zimbabwe, increasingly isolated internationally, is also expecting China to use its veto to block any censure at the UN Security Council.

Source:The Age
Rights:Copyright © 2005. The Age Company Ltd.