Business
Zimbabwe engages BRICS for investment and trade
Zimbabwe has set sights on the BRICS (Brazil, Russia, India, China and South Africa) group of emerging world economic powerhouses as a source of trade and investment to fill the void left by crisis hit western countries.
The southern African country seeks to fix an economy that is currently battling to recover from a decade-long recession, and says it requires US$10 billion to rebuild dilapidated infrastructure and ease a 90 percent unemployment rate.
The BRICS have acted as a “shock-absorber” for the world economy, as the fast-growing economies showed resilience to the global recession and the euro zone debt crisis, economists say.
Trade between Zimbabwe and South Africa was valued at 17.5 billion rand (US$2.3 billion) in 2011, South Africa’s Deputy Trade Minister Elizabeth Thabethe said last week.
Through its much-vaunted “Look East” policy, Zimbabwe has managed to expand bilateral and trade relations and given priority to investors from countries such as China and India, as investors from western countries turn away from it due to concerns around the country’s risk profile.
Zimbabwe-European Union trade volumes have declined since 2000. Between 2002 and 2008 both exports and imports went down by 49 percent and 28 percent respectively, according to EU figures, while trade between Zimbabwe and the BRICS increased by 36 percent between 2010 and 2011.
Last week the coalition government launched its 5-year national trade and industrial development policies to spruce up the country’s export competitiveness, targeting annual export earnings of 10 percent to US$7 billion by 2016, up from US$4.3 billion in 2011.
“The role of trade in economic growth and development in the face of globalization needs no emphasis,” Industry and Commerce Minister Welshman Ncube said.
“The policy (national trade) sets out the key principles and strategies to drive the economy towards export orientation and international competitiveness in order to transform Zimbabwe from being an exporter of primary commodities to an exporter of value added high quality processed goods and services.”
Currently the world’s biggest economy after the USA, China has shown great appetite for Zimbabwe’s mineral wealth as it sought to power its super-fast growing economy and meet rising demand among its huge population.
Zimbabwe has the second-largest known platinum deposits in the world after South Africa and 20 percent of world diamond reserves, according to global mining industry statistics.
According to Chinese customs data, China-Zimbabwean trade had risen by 62.2 percent to US$717.3 million in the third quarter of 2011 alone. In the same period Chinese investors had pledged to earmark about US$700 million towards developing the mining sector.
Trade between India and Zimbabwe has doubled to US$125 million in the four years to 2010-11, India’s Commerce Ministry has said.
But despite its long-standing strong relations with Zimbabwe, Russia’s US$20 million trade with it appears to be a far cry when compared with its BRICS counterparts.
In August last year, a high-powered delegation of Zimbabwean top government officials held meetings with Brazilian officials the country sought to strengthen ties with the south American state.
As part of his growing amity with eastern countries, President Robert Mugabe has been flexible towards Chinese and Indian firms when it comes to his empowerment laws which compel foreign companies to surrender 51 percent of equity to local blacks in the country.
Source: Africa News