Tuesday, 8 November 2011

The Marange Diamonds US$2 billion: The people vs potential oligarchs.


The Marange Diamonds US$2 billion: The people vs potential oligarchs.
By Takura Zhangazha.
The Newsday of 08 November 2011, reported that civil servants are to be paid bonuses from the proceeds of the sale of Marange Diamonds. Quoting Prime Minister Tsvangirai, the same story indicated that the government intends to raise US$300 million by end of November 2011 in order to pay the civil service salary bill plus bonuses. This announcement comes hard on the heels of an announcement by the Minister of Mines and Mining Development, Mr. Obert Mpofu that the government expects a gross amount of US$ 2 billion yearly from the sales of the diamonds that was given the green light by the Kimberly  Process Certification Scheme (KP) at a review meeting in the Democratic Republic of the Congo in the last two weeks.  In his announcements, Minister Mpofu had not however indicated what the proceeds from the selling of the diamonds would be utilized for by the government.  

Prime Minister Tsvangirai has however given the first hint at what the diamond wealth will be used for, well at least US$ 300 million of it.  We are however not yet clear as to what the other potential US$1, 7 billion will be used for.
A number of my economist friends have already pointed out to me that the Zimbabwean public must be cautious about the figures that the government, through the Ministry of Mines, has issued.

 This is because the US$ 2 billion is not necessarily what the government will get into its coffers. This is because the projected value of the sales of the diamonds does not translate into what the government will make because it is not the government that is selling them, but companies that have been granted extraction rights in Marange. Government may get a windfall but that windfall is probably not US$2 billion. And therein lies the first problem with what the Prime Minister and the Minister of Mines have announced. 

There is no clarity as to how much exactly is government expecting out of the Marange precious stones. But already we have pronouncements about a holistic estimated amount as well as a specific amount to pay civil servants’ bonuses. Given the fact that there is no love lost between the Prime Minister and the Minister of Mines over the contentious issue of the Marange diamond fields, I am sure there will be a another policy pronouncement as to what the money might be used for, and perhaps this time from a Zanu Pf minister. And therein lies a second problem which is that of the politicization of the potential diamond revenue. The MDC and Zanu Pf are going to scramble to claim the credit as to how the money was eventually used for the purposes of their own individual party political interests. This is despite the fact there is limited clarity, as confessed in the last budget by the Minister of Finance,  about how much the fiscus  has been getting or  will actually get.

Having initially been confronted  with the dilemma of accepting the fact that after all the noise that has been made about the Marange diamonds being ‘blood diamonds’ they are now being sold on the world markets, we are now faced with a new challenge. This being that of watching the inclusive government haggle over who gets what, when, how and why from the potential but unverified proceeds. This is primarily because the inclusive government does not want to establish common ground on some fundamentals of its collective responsibility to the people of Zimbabwe in times of our continuing economic crisis.

 An easy question however would be what would be this common ground I am referring to. The answer is that it is the ensuring of administering a functional and social democratic society. This would further mean that in the aftermath of the clearance by the KP, the inclusive government must literally sit down to agree on the holistic usages that the revenue to be accrued should be utilized for before making individuated statements to the same effect.
Marange diamond fields are roughly 90km south west of Mutare in the eastern border province of Manicaland.These considerations by the inclusive government should be premised on the firm understanding that the Zimbabwean state is seriously challenged in relation to the social welfare needs of its people. Any revenue that is derived from our minerals and at potentially phenomenal profit levels should have the following key social welfare targets:  the re-introduction of free access to public health; modernization of our hospitals;  reinvestment in free public education;  the completion of our pending dual highways together with the refurbishment and re-introduction of an efficient public transport railway system;  the full and comprehensive compensation of those displaced from Marange; a social grant system for the physically challenged, the youth, women; a specific improvement of our water retention systems (urban and rural) and the completion of the Zambezi Water Project for Matebeleland.

These are straightforward issues that establish the necessary ‘performance legitimacy’ mandate that the inclusive government in its transitional nature, is burdened with, regardless of the various political contestations that characterize it. Where there have been disputes over how the diamonds have been mined and the allegations of human rights abuses in the same processes, it is now an issue that must be handed over to our newly established Human Rights Commission and investigated objectively and fairly. But in order that we do not fall into the trap of creating ‘diamond oligarchs’ in Zimbabwe, we must from the onset be very clear as to what we intend to use the diamond revenue for, and whatever we decide, it must be in the best public and social welfarist interest.