Saturday 22 August 2015

China in volte-face about funding ZimAsset to buy time to loot!


Ever since Mugabe launched his ZimAsset economic recovery plan as part of his 2013 Zanu PF elections manifesto he has struggled to get donors to finance the plan. Ever since the party successfully rigged the July 2013 national elections Zanu PF has been on a charm offensive to re-engage the West to get them to fund his plan but to no avail.

 

Mugabe has begged and grovelled to the Chinese but they too have refused to fund his plan. But all of a sudden there are reports that the Chinese have now changed their minds and they will bankroll ZimAsset!

 

"What is very encouraging from the Chinese is that they have put no limit on how much they will want to pour into the projects,” reported The Sunday Mail quoting a Zimbabwe Government official.

"What came out of the high-level talks is that the level of seriousness in implementing the deals has now gone a gear up. This is why the subject of financing as well as immediate implementation was topical during those talks."

 

There is no such thing as a free lunch, especially from the tight fisted and shrewd Chinese! So what has made the Chinese change their minds on financing ZimAsset?

 

Zimbabwe’s economy has been in serious economic trouble for years and the solution was glaringly obvious; the nation needed to finally bite the bullet and end endemic gross mismanagement and rampant corruption and scrap the obnoxious indigenisation laws that had forced Foreign Direct Investment to dry up. Instead of biting the bullet and deal with the cancers killing the national economy Mugabe decided to throw lots and lots of money, $27 billion, with his 2013 ZimAsset recovery plan.

 

$27 billion; that is nearly three times the nation’s national $10 billion debt, which would have been even larger if all credit-lines had not been cut because Zimbabwe was failing to service existing loans. Mugabe was hoping the credit-lines will be renewed allowing him to borrow and spend his way into economic recovery and prosperity.

 

After the rigged 2013 elections Mugabe’s regime went on a charm offensive to win the West back into bankrolling his ZimAsset plan. He failed to fool anyone; not even the Chinese were willing to fund the plan.

 

After a year and a half of begging and grovelling the Chinese and Russians finally signed what Mugabe announce as “mega deals” at the time. To start with the deals were for projects and not for the budgetary support Mugabe was seeking. Second, the funding was only to be released after Zimbabwe had fulfilled certain so none of the projects ever took off. The Chinese demanded that Zimbabwe was to pay all outstanding payments on its existing $1.5 billion debt first before China release funding on the new deals. The Chinese knew Zimbabwe is stone broke and one could say the cheques signed for the mega deals were undated, unsigned and not worth the paper they were written on.

 

So this announcement that work on the mega deals projects with the Chinese will start before the end of the year and they have not only signed and dated the cheque but have left Mugabe to fill in the amount too is a bolt out of the blue! What has changed to justify this volte-face by the Chinese?

 

Mugabe has certainly not done anything to end the corruption and all the other cancers killing the national economy. The only way for him to end the corrupt is by ending the political patronage system he has instituted all these years to reward party loyalties; with the country’s economy in total meltdown and everyone feeling the ill effects of the worsening economic situation Mugabe knows firing the corrupt and incompetent party loyalists now would be him committing political suicide.

 

Zimbabwe was failing to service its debt at $10 billion how on earth is it going to do so with the debt increased four-fold but with no significant economic recovery. Surely the Chinese are not extending new loans to Harare and expecting nothing!

 

 

"Innovative mechanisms will be used in implementing the deals. For example, you can say to the contractor, 'Take a certain percentage of equity for the loan's duration and then you can return this equity when the tenure of the loan is done'.” Deputy Chief Secretary in the Office of the President and Cabinet Colonel (Retired) Christian Katsande told The Sunday Mail. Well that would go a long way to explain the Chinese’s change of heart!

 

The “contractor” in all these mega projects with China is a Chinese company employing Chinese workers down to the man pushing the wheelbarrow. So if the usual waste due to corruption, etc. pushed the project costs to ten times or more China is not bothered. They know the Chinese worker pushing the wheelbarrow will be paid rock-star wages, one. Two, the greater the project cost the great the equity the Chinese will own in Zimbabwe!  

 

Since the Chinese are only funding bankable projects guaranteed to generate lots of profit they will cream-off the profits as the new owners for many, many years to come.

 

There is one other reason why the Chinese have decided to Fund Mugabe’s ZimAsset plan. The Chinese have been racking in billions of dollars every month from grand looting and plunder of Zimbabwe’s resources especially in Marange and Chiadzwa. No doubt the Chinese are aware that Zanu PF hold on power has been slipping fast these last few weeks with the worsening economic situation.

 

By agreeing to fund Mugabe’s ZimAsset the Chinese are bolstering Zanu PF’s political standing by creating the impression that the regime will after all deliver on its promise of economic recovery and thus extend the regime’s stay in power. As long as Zanu PF remains in power the Chinese know grand looting and plunder will continue.

 

So the decision by the Chinese to fund Mugabe’s ZimAsset plan although they know it is doomed to fail makes a lot of sense. They are using some the billions of dollars earned from the looting and plunder of Zimbabwe’s resources going on to fund Mugabe’s hare-brain plan to buy more time to loot. They are allowing Mugabe to be as wasteful as he please knowing this will increase China’s equity value of Zimbabwe’s bankable assets.

 
Zimbabwe will not be a colon of China but its economic slave. After decades of robbing Zimbabwe blind through looting and plunder of our resources; China is set to continue with the looting or be it by controlling and owning the nation’s bankable assets, bought using our own looted wealth!

5 comments:

Zimbabwe Light said...

@ Bonzo

You have never understood what the GPA was all about and how the reforms were to be imple-mented during the GNU. But like all ignorant and shallow minded people you still want to com-ment on matters you have no clue about.

"All these 50 years of conscious brooding have brought me no nearer to the question - what are light quanta?" said Albert Einstein. "Every Tom, Dick and Harry thinks he knows it. But he is mistaken."

Of course there is nothing complex about GPA or what happened during the GNU and yet even now with the benefit of hindsight people like you still do not have the foggiest idea what the re-forms are, who was supposed to implement them, etc. Frankly I do not think you will ever under-stand.

"How honestly do you think the MDC could have pushed through any sort of reform during GNU?" What a stupid question; that is the same as someone asking about grade one Science stuff and yet believe they know enough to comment about quantum physics!

Zimbabwe Light said...

@ Good

The military junta did not stop MDC implement the reforms, this show you have never understood the process of implementing the reforms and yet has the foul mouth to call someone "shallow" over matters you have no clue!

Meva, you are right with shallow minded people like Good Zimbo we really have challenge in our hands to get people like him/her to think. We are in this mess because we have more than our fair share of mentally challenged people.

Yes of course we all want liberty, democracy, etc. the devil is in the detail how are we going to secure these things? For the last 35 years we have been doing the wrong thing because we are poorer in all these areas today than we were in 1980!

Zimbabwe Light said...

@ Musindo

True since I am a Zimbabwean may be I should hold public office. However I am sure even you would accept that we cannot expect everyone to hold public office and, even more significantly, it is the scarred duty of all of us to hold those who do hold public office to account otherwise people will go into public office for selfish reason.

Tsvangirai et al were elected on the promise to deliver democratic change, they had the oppor-tunity to deliver those changes by implementing the reforms. They failed to implement even one reform because Mugabe bribed them to kick the reforms into the tall grass.

Tsvangirai et al sold-out and the whole nation is paying dearly for their betrayal. I am holding them to account, if they did not want to be held to account then they should implemented the reforms or else not go into public office.

If you do not like the heat stay out of the kitchen! These village idiots went into the kitchen and burnt our dinner and you want me to thank them for it!

You witter about wanting democracy but the minute someone holds you to democratic account you scream blue murder! If you were thinking of following the footsteps of your brother, uncle, or whatever into politics then make sure you have the brains and are not like one of these village idiots because you will be held to account!

By the way holding these village idiots to account is very important work. I deeply regret that I had not undertaken this important work earlier; I could have save the nation the consequences of electing sell-out village idiots!

Zimbabwe Light said...

Mugabe tells Zanu PF Women’s League the late Solomon Mujuru had plotted to have him re-moved.

“These three among others Mujuru, Makoni and Mandaza said Zanu PF was being held back by Mugabe who continues to stick to Socialism,” said Mugabe.
“They claimed this was inhibiting investment. Mujuru then concluded that the country cannot be held back by one person, people cannot suffer because of one man.”
“But what is it that the people are suffering from? Isn’t we gave them land?” said the 91-year-old leader.

So Solomon Mujuru is just one of the over 30 000 Mugabe has had murdered to establish and retain his one-man dictatorship in his 35 years in power?

Mugabe has fought hard all his decades in power first to deny that his economic policies have been a failure and then to blame others the odd occasion he has admitted the economy was in a mess. The evidence of his failures have mounted in these last two years and it all point to decades of gross mismanagement and rampant corruption and Mugabe's incompetent and corrupt rule.

Not even one of the Women's League members believed Mugabe when he said no one in Zimbabwe was suffering! How could they, they are all suffering.

Zimbabwe Light said...

@ Chokwadi

Thank you for the suggestion; maybe I will start my own party.

Meanwhile there is the business of Tsvangirai who started his own party, was elected on the ticket to bring democratic change but failed to do so because he sold-out. Are we going to hold him to account or sweep it all under the carpet? I say it is the democratic duty of all who are seeking a democratic Zimbabwe to hold sell-out politicians to account otherwise how else are we going to stop this madness.

You do not want Tsvangirai called a sell-out well he should have implemented the reforms!