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Blogs by Ambassador Ray

Sanctions: Much ado about nothing much

June 3, 2010

By Charles A. Ray

One can hardly go a day in Zimbabwe without the topic of sanctions creeping – no, barging – into the conversation.  I have often remarked that this is a topic that I find little reason to dwell on, and usually avoid doing so.  It is a non-issue that has lots of billowing smoke, but little flame.  It is, however, such a pervasive topic, I feel I must at least attempt to offer some input into the debate.

I won’t go into the details; they have been hashed out ad nauseum for far too long already.  But, a few words are in order.  The intent of U.S. sanctions is not to hurt the people of Zimbabwe, or to impede economic development.  The U.S. Government and people want to see life for the people of Zimbabwe improved.  To that end, we have never failed to step forward to address the many humanitarian crises that have been visited upon them.  We have also been at the forefront of urging government policies that will contribute to the country’s development and restore Zimbabwe to its rightful place in the world.

Do U.S. sanctions prohibit American companies from doing business in Zimbabwe?  If one listens to the rhetoric, it would be easy to believe this to be the case.  The thing is, it’s just not true.  Following the imposition of targeted sanctions in 2003, trade between the U.S. and Zimbabwe doubled over the following five years.  In fact, Zimbabwe recorded trade surpluses with the U.S. in all but one of those years.  So much for the “embargo.”  As long as they do not deal with individuals and entities on the specially designated nationals (SDN) list, American companies are free to invest and do business here.  Why, then, do more of them not do so?

Prior to coming to Harare I met with a number of representatives of U.S. companies.  All said the same thing:  they would like to invest in Zimbabwe, but their concern was the degree of political risk they faced.  These same companies currently do business in countries that are subject to one degree or another of sanctions; the principal difference is that in these countries, they are confident that the local government can be relied on to enforce contracts, allow repatriation of profits, and will not expropriate assets.  In other words, the political risk can be calculated into the cost of doing business.  In an atmosphere of political uncertainty capital is cowardly – it will go elsewhere. 

Do sanctions prohibit U.S. assistance to Zimbabwe?  While they do limit to whom we can give direct assistance, I can assure you, the people of Zimbabwe are not on that list.  From assistance to improve health care to improved governance, U.S. assistance has been consistent and generous.  And, that assistance has not been static.  Our level of support has grown – slowly, for even the U.S. treasury is finite and we have many commitments around the globe – and continues to grow; both in terms of response to emerging crises and as opportunities arise.  As the political situation improves, with respect for human rights and rule of law, media freedom, and widening of the political space – and here I’m an optimist, and believe this will eventually happen – the current limits can be removed.

It’s long past time to move the debate away from all the mythical problems caused by sanctions to the things that can and should be done that are not impacted by sanctions.

Charles A. Ray is U.S. Ambassador to Zimbabwe

June 3, 2010
Financial Gazette