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Sep 16, 2014 | 09:15 GMT

5 mins read

Russia and Zimbabwe Seek a New Economic Partnership

Russia and Zimbabwe Seek a New Economic Partnership  Read more: Russia and Zimbabwe Seek a New Economic Partnership

Russian Foreign Minister Sergei Lavrov will travel to Zimbabwe for an official visit on Sept. 16 to discuss economic and trade cooperation. The timing and location of Lavrov's visit is interesting. Russia is currently focused on a number of first-order concerns, such as the security situation in Ukraine and the Russian economy, that are far higher on Moscow's list of priorities than Zimbabwe. While Harare is in desperate need of foreign investment to help its economy recover, Moscow typically has little money to spend on countries that are relatively inconsequential to its foreign policy and so far from Russia's more crucial immediate periphery. Though Russia does have an interest in preserving its influence by maintaining commercial and intelligence relationships in areas it historically has been active in, such as southern Africa, it is unlikely that it will commit to providing substantial foreign investment to Zimbabwe.

The Russian foreign minister's visit will follow the inauguration of the Zimbabwe-Russia Joint Permanent Commission on Economic, Technical and Trade Cooperation on Sept. 15. No substantial economic cooperation currently exists between the countries, but Russian officials have discussed platinum resources as a potential sector of engagement in the future. Russia is the world's second-largest platinum producer, responsible for approximately 12.5 percent of global output, while Zimbabwe is the world's third-largest producer and accounts for approximately 6 percent of global output. (For the sake of comparison, the world's largest producer, South Africa, dominates the platinum market with roughly 75 percent of global output, amounting to some 140 metric tons per year when labor unrest is minimized.) Beyond Zimbabwe, Russian companies such as Rosneft have proposed business deals in the southern African region, such as the construction of a refined products pipeline linking Mozambique's Indian Ocean port at Beira with Zimbabwe and Botswana.

The administration of Zimbabwean President Robert Mugabe is certainly eager to secure Russian investment in the country. Zimbabwe's economy has deteriorated in recent years, especially since land reform policies enacted in the late 1990s essentially collapsed the country's commercial agriculture sector. Harare's consistent threats to nationalize businesses, requiring the transfer of majority ownership stakes to Zimbabwean nationals, further disincentivized foreign investment in the country by traditional economic partners such as the United Kingdom. These political and economic policies have put severe stress on the government and economy, to the point that Zimbabwe no longer has its own currency or the liquidity to pay civil servants on time. Even underwriting new business development is untenable, let alone financing the recovery of existing commercial activity.

The Russians will not be the first to receive Harare's appeals for aid. Mugabe and his Cabinet members recently went to Beijing to seek investment and financial assistance from the Chinese. However, reports from Harare indicate that the Chinese had no appetite for providing budgetary assistance to Zimbabwe, nor did they make any meaningful commitments to invest in physical projects, even in the extractive industry — Beijing's traditional economic approach.

Russia's Connection to Southern Africa

Zimbabwe is likely appealing to Russia for economic assistance because of the countries' shared suspicion of Western companies and preference for maintaining political control over the development of their natural resources. Harare understands that it is facing an imperative to reform the economy, given that the ruling Zimbabwe African National Union-Patriotic Front no longer has a viable target to blame for the country's economic woes. (The Movement for Democratic Change, now effectively a defunct opposition party, is no longer the scapegoat it once was.) But the Zimbabwe African National Union-Patriotic Front wants to reform the economy in a way that preserves the political status quo. Mugabe and his backers will try to avoid reforms that would allow substantial foreign investment to mobilize the impoverished Zimbabwean population to vent its social and economic frustrations against the government that has ruled uninterrupted since independence in 1980.

Russia is no stranger to the geopolitics of southern Africa. During the Cold War, the Soviets actively supported anti-apartheid political and armed groups, including factions against Prime Minister Ian Smith in what was then Rhodesia. The Soviets supported similar groups in Angola and Mozambique, as well as the Nelson Mandela-led African National Congress in South Africa. But since the end of the Cold War and the transition to democratic governance in southern Africa, the Russians have been rather absent. Moscow makes some weapons sales, but they are generally minor deals and have not involved either advanced technology or quantitatively significant packages. The governments in southern Africa, except that of South Africa, have not been large purchasers of military equipment. When substantial deals do arise, such as Angola acquiring light attack aircraft from Brazil or Mozambique acquiring offshore patrol vessels from France, these governments bid on the best competitive bases — and the best investment offsets (or kickbacks) that accompany the purchases — from producers around the world. Despite its reduced presence, Russia still maintains some intelligence connections in southern African countries that are based on legacy relationships rooted in the Cold War, called upon when primary concerns — including dealings with the United States — require Moscow to mobilize political support from its former clients.

Harare and Moscow will discuss economic cooperation, but substantial foreign investment likely will not be forthcoming from Russia. However, discussions on coordination in sectors the two countries share interests in — most notably in platinum — will be held. Russia is looking for markets to invest in now that Europe is increasingly off limits, although Moscow will want to ensure that any ventures are profitable before sinking cash into projects so far from home. Lavrov's three-day visit also gives Russia an opportunity to demonstrate that while it is deeply engaged in Ukraine, Moscow has more than enough capacity to simultaneously devote its attention to lesser issues far from its core areas of concern.

Russia and Zimbabwe Seek a New Economic Partnership
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