Global Issues
ZIMBABWE: EU and U.S. Exhibitors Stay Far Away from Trade Fair
Companies from the European Union and the U.S. will not feature at this year’s Zimbabwe International Trade Fair despite the formation of a government of national unity last year.
The formation of the government of national unity in Feb 2009 between President Robert Mugabe’s ZANU-PF, long-time rival and current Prime Minister Morgan Tsvangirai’s MDC and the Arthur Mutambara MDC faction was seen as holding the opportunity of thawing the decade-old trade and investment stand-off between Zimbabwe and its erstwhile major trading partners.
But the EU and U.S. remain wary of the shaky coalition as Mugabe refuses to make crucial concessions and implement sections of the so-called global political agreement that led to the formation of the government.
Early this year, the EU extended sanctions against Mugabe that restrict him, members of ZANU-PF and their companies from having dealings with the EU.
'In view of the situation in Zimbabwe, in particular the lack of progress in the implementation of the global political agreement signed in September 2008, the restrictive measures ... should be extended for a further period of 12 months,' the EU said.
Established more than 60 years ago, the trade fair has historically been the country’s investment barometer. Last year the exhibition was on the verge of cancellation after potential and traditional exhibitors showed little enthusiasm to participate.
Companies from countries like Germany last featured at the trade fair in 2001 before relations between Zimbabwe and the West soured in the wake of Mugabe’s anti-democratic clampdown. Investors have fled Zimbabwe, citing years of hostile economic policies under one of Africa’s longest serving leaders.
While officials from the U.S. embassy in Harare told IPS they did not have any information on the participation of U.S. companies at this year’s fair, there will be no U.S. companies exhibiting, according to March figures released by the trade fair’s general manager Daniel Chigaru.
By the end of March, about 95 percent exhibition space had been taken up, Chigaru told local media. Chigaru said there was an increase in foreign exhibitors this year, compared to last year. Among the 14 countries represented at the fair, India, Iran and Indonesia had confirmed their participation.
Timothy Gerhadson, the U.S. embassy’s public affairs officer in Harare, told IPS 'there are no trade restrictions between the Zimbabwe and the U.S.' and noted that 'bilateral trade has increased significantly in recent years'. He did not elaborate on the volume of trade.
'We expect more U.S. companies will consider Zimbabwe as a business destination if the government succeeds in reducing risks that tend to impede trade and investment,' Gerhadson pointed out.
Analysts say the absence of exhibitors from the EU and the U.S. could mean Zimbabwe has a long way to go toward attracting tangible investment if the country is to regain its position as one of Africa’s strongest economies.
ZANU-PF is pushing legislation that will nationalise foreign investments. Economists warn that this is against the spirit of economic recovery envisaged by the formation of the government of national unity and will only serve to fuel investor flight.
The British based Economist Intelligence Unit (EIU) has reported that these nationalisation plans — which have been opposed by Tsvangirai — are convincing foreign investors to stay away. The EIU is a research and advisory firm that provides country, industry and management analysis.
The effect of these plans has been felt in the preparations for the trade fair, believes Bulawayo-based economist Titus Njini.
As long as there is no consensus within the coalition government on the way to return the economy to mid-1990s levels, the trade fair will just be one of those shows held to save face, Njini told IPS.
'However, I believe the trade fair could still be relevant in the future for investors to know whether they can put their money here,' he added.
This year’s trade fair, with the theme 'Unlocking Our Investment Potential', kicks off on Apr 20 and runs to Apr 24.
© Inter Press Service (2010) — All Rights Reserved. Original source: Inter Press Service