Zimbabwe fears SA trade dominance

Zimbabwe fears SA trade dominance

By Susan Njanji

HARARE (AFP): The 15-month-old democratic South Africa which many regional countries expected would act as a magnet to attracting investment to the sub-continent is now being viewed as a threat, particularly by neighboring Zimbabwe.

Fears of the economic giant dominating trade and economy in the region were conspicuously expressed at a just-ended annual congress of the Confederation of Zimbabwe's Industries (CZI), in the resort town of Victoria Falls, about 800 kilometers (500 miles) northwest of here.

According to reports from the meeting, the issue of trade imbalances and protectionist tariffs imposed by South Africa dominated the discussions which were supposed to be centered on the cost of money in Zimbabwe.

Industrialists and economists here, who celebrated the political changes in South Africa last year from apartheid in the hope that the regional peace would contribute to an overall economic growth, have been caught off guard by the potentially domineering regional giant.

Zimbabwe's industrialists are particularly impatient with South Africa's delay in concluding a new trade agreement to replace a 1964 one which favored Pretoria.

Zimbabwe, whose market-based economic reforms highly depend on exports, is unhappy that trade between the two countries is heavily skewed in favor of South Africa.

According to figures from the CZI congress South Africa exports goods worth about four billion Zimbabwe dollars (US$500 million), against Zimbabwe's one billion dollars (US$125 million), yearly.

In highly emotional discussions, some industrialists called for reciprocal trade war against South Africa which they charged did not take Zimbabwe as a trading partner, but a market.

"If South Africa does not want us, there should be a trade war... we should not compromise... there should be a counter- strategy" said Jonee Blanchfield, managing director of a leading chain of clothing stores.

She added that South Africa was "not trying to make us look like idiots but to succumb to them so that we become a perpetual market for their goods". Zimbabwe is rated to have the second largest industrial base after South Africa in the southern African region.

But South African ambassador to Harare Kingsley Mamabolo said it might take three to four years to reach a trade agreement while it sorts out its domestic woes following decades of isolation.

"The purpose of any government is to support its industry. It would be disastrous for South Africa to succumb to pressure and change its trade laws overnight. It would be disastrous for you to ask us to destroy our companies, " Mamabolo told the meeting.

Blanchfield said South Africa's aggressive protectionist policies were lack of vision on its part and now the biggest threat to Zimbabwe's economy.

"There is a very real danger of de-industrialization in our country. To our South African counterparts we are a means of enabling them to find markets for its goods in Africa," she said.

The clothing and textile industries have been the hardest hit sectors of Zimbabwe's economy.

Regionally, Zimbabwe has signed free trading agreements with Malawi and Namibia, and is about to conclude similar pacts with Mauritius and Zambia.