Fifteen months after the formation of the inclusive government, Zimbabwe has still not devised and adopted a strategic policy to deal with the debt crisis in which the country finds itself trapped. (Pictured: A mother and her child outside their shack dwelling -- More than 70 percent of Zimbabweans live in abject poverty.)
It is particularly sad to note that the country's debt obligation, to both bilateral and multi-lateral financial institutions, is still hovering in the region of around USD7 billion. One does not have to be a financial genius to appreciate that Zimbabwe is facing a debilitating debt crisis that urgently demands the attention of the inclusive government.
The authorities at the Ministry of Finance are no doubt seized with this matter concerning the debt trap. Recent pronouncements by the Finance Ministry have convinced some of us that the debt problem is indeed a matter of grave concern to our Treasury.
Indeed, every Zimbabwean should be seriously concerned with this debt crisis because whether we like it or not, the debt problem negatively impacts on the country's development trajectory. Put simply, the debt burden of USD7 billion in an economy that is still battling to find its feet is like the sword of Damocles hanging over the head of each and every Zimbabwean.
More than 70 percent of Zimbabweans live in abject poverty. This means that the majority of Zimbabweans live on less than USD2 a day. Surely, for a country endowed with so many natural resources like Zimbabwe, all of us should be terribly ashamed of these startling statistics.
Why so long?
All Zimbabweans, without exception, should enjoy basic rights such as the right to food, housing, clothing, employment, education, health services and a healthy environment.
Indeed, the United Nations Commission on Human Rights resolution 2000 of 1982 recognises that these rights cannot be subordinated to the implementation of structural adjustment programmes and economic reforms arising from debt.
How can the inclusive government dream of providing basic services to the people when the country is sitting on a debt time bomb of almost USD7 billion?
Why is it taking so long for the government to debate, design and adopt a strategic and progressive debt management policy that will extricate Zimbabwe from this debt trap?
In previous articles concerning the issue of debt, I have strongly advocated for the cancellation of all odious debts that Zimbabwe has incurred. I have called for the adoption of a rigorous debt audit mechanism that will enable us to determine which debts are legitimate and which ones are not. I still associate myself with these sentiments.
Debt cancellation
Odious debts should not be honoured. It is as simple as that. Whilst I have no problems with activists who agitate for the wholesale cancellation of all developing countries' debt to enable these countries to jump-start their moribund economies; I am strongly convinced that there should be no blanket cancellation of developing countries' debts before a holistic and comprehensive debt audit has been undertaken.
Firstly, we should locate the main reasons behind the massive accumulation of the debt portfolio in most developing countries. We should also interrogate the role of lending countries and the international financial institutions( IFIs), such as the World Bank and the International Monetary Fund, in loan contraction in the developing world.
More particularly, we should seek to ascertain whether the IFIs have adopted responsible lending practices or whether they are, in fact, the catalyst to the pauperisation of the developing world by promoting irresponsible and inherently corrupt lending practices. Put simply, there should be no sacred cows in this crucial exercise of liberating developing countries from this enslaving cycle of debt and poverty.
The inclusive government is hereby encouraged to design and urgently adopt its own context-specific standards, benchmarks and indicators to deal with Zimbabwe's debt crisis. There is no use in pontificating and somehow, relegating the debt crisis to less important items on the agenda of government business.
The debt crisis is glaring us in the face and no amount of political bravado can idly relegate it to a non-issue unless and until we tackle the crisis head on. There is no use in adopting a policy of see-no-evil and hear-no-evil in as far as the debt crisis is concerned. We cannot even talk about the rule of law and the democratisation agenda as long as we continue to fail to effectively deal with the debt crisis in our country.
The government should urgently highlight necessary steps towards realising economic reforms and foreign debt management, consistent with human rights principles. Zimbabwe needs a new debt sustainability framework that should take into account the impact of debt service on the country's ability to fulfill its obligations under international human rights law.
Millennium Development Goals
We cannot even talk of achieving the millennium development goals( MDGs) if we fail to adopt a new and effective debt sustainability framework. This world is globalising; whether we like it or not. The objectives and conditionality attached to granting debt relief should be in line with human rights objectives. Both the borrower and the lender share a common responsibility on illegitimate debt and its cancellation.
Going forward, Zimbabwe should ensure that before new loan agreements are signed, borrowers and creditors should assess and consider the economic and social impact of debt service obligations. At all times, we should make sure that obligations arising from new loan agreements should not impair the institutional and financial capacity of Zimbabwe to fulfill economic, social and cultural rights, I including response to any disasters or crises.
In April 2004,the UN Commission on Human Rights sought to draft general guidelines to be followed by states and by private and public, national and international financial institutions in decision-making and execution of debt repayments and structural reform programs, to ensure that compliance with the commitments derived from foreign debt will not undermine the obligations for the realisation of fundamental economic, social and cultural rights.
An independent expert, Dr. Cephas Lumina, has been appointed by the UN to work on these guidelines and the writer is privileged to be working as one of Dr. Lumina's resource persons.
I am of the firm view that both the negotiations and implementation of loan agreements should be transparent and open to public scrutiny. There is no need for secretive loan contraction.
Indeed, Parliament should be allowed to play a more meaningful role in loan contraction rather than to simply ratify loan agreements that would have been secretly negotiated by the executive arm of the state. It is only in this way that the phenomenon of odious and illegitimate debts can be eliminated.
Zimbabwe is too rich to be poor!
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