Bate: Zimbabwe's future and the 'Kimberley Process'

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From 2000 to 2008 Zimbabwe collapsed: the confiscation of white-owned farms precipitated the destruction of its economy; mad monetary policies led to hyperinflation; malnutrition and a cholera epidemic contributed to life expectancy plummeting to 35 years.

But, in 2008, a political compromise was reached between President Robert Mugabe of the ZANU PF party and Prime Minister Morgan Tsvangirai of the opposition MDC party. They formed a coalition, stabilized prices, and their small and uncertain steps towards democracy encouraged some aid to return to the country, which assisted with ending the cholera epidemic. And while most of the credit goes to the MDC at least ZANU PF did not stand in its way.

But a seeming lull in the violence may not augur a stable prosperous future, for Mugabe and the ZANU PF elite may have a more devious plan to recapture full power by the end of the year.

Superficially Harare, Zimbabwe’s capital city, looks far more prosperous than just a few years ago. There are more luxury vehicles. Harare’s restaurants are full and construction is underway on luxury houses in the suburbs. In newly and rapidly emerging economies wealth distribution can be very unequal, so the sight of conspicuous consumption by Zimbabwe’s elite, while tens of thousands still go hungry, is distasteful to many, but is not inherently unexpected nor inherently worrying. But the problem is that the economy is not really growing. Much, maybe most, of this consumption is driven by the diamond trade.

This isn’t just my conclusion. A whole bunch of monitoring groups, diplomats, lawmakers and analysts acknowledge the importance of the diamond trade to the economy. Yet some go even further, claiming that Mugabe’s cronies have siphoned off funds from the Marange mines in the East of the country. Tendai Biti, Zimbabwe’s Finance Minister and an MP of the MDC, issued a budget report claiming that the treasury was underpaid from the diamond business by at least $60 million last year. Yet that is a conservative estimate.

MDC MP Eddie Cross says that geological and production records of the Marange diamond fields indicate that at least $1.4 billion in diamonds was mined last year, which is over four times more than the mining ministry reported for all mining activities in those fields. Mugabe’s loyal mining minister, ZANU PF’s Obert Mpofu, says that everything mined has been ‘accounted for’, but no independent observers agree.

Yet the Kimberley Process, which is a coalition of producers and political actors who aimed to limit mining in conflict areas and to stop the proceeds of illegal mining financing bloodshed, approve the mining activities of the Marange fields.

Global Witness was one of the main drivers of the Kimberley Process, but left last November because the process repeatedly allowed over four million carats of Marange diamonds to be traded internationally. Political commentators in Harare claim that the resulting funds are being used by Mugabe’s cronies to position themselves to
use violence to ensure they retain power in future elections – and the signs are that Mugabe wants that election this year.

It is common knowledge in Harare’s restaurants that, last November, military leaders loyal to Mugabe bought a large shipment of weapons and equipment from China. Mugabe’s secret police miraculously were able to buy hundreds of vehicles and weapons from China although it had no government budget to do so. And now Chinese interests in Marange have financed a new military academy. The main company behind this, Anjin Investments, also
announced it was now the world’s biggest diamond producer, with a stockpile of three million carats to sell.

The Kimberley Process was always flawed; it was never possible to control the flow of diamonds from poorly governed regions, since they are relatively easy to mine and very portable. To provide international cover for sales of Zimbabwe’s diamonds is immoral; and it enables the politically powerful cronies of Mugabe to keep up business as usual. This deters investors in other areas of the economy and lowers the chance of a sustainable recovery.