Fighting corruption: A lesson from Iran

Diamond mining activities at Chiadzwa and the reinvesting of proceeds in the economy and welfare of citizens had the potential to fuel economic growth in Zimbabwe

Diamond mining activities at Chiadzwa and the reinvesting of proceeds in the economy and welfare of citizens had the potential to fuel economic growth in Zimbabwe

Tafara Shumba Correspondent

While the move to have a consolidated operation in Chiadzwa where Government will take full charge is commendable, the first step must be to recover the looted money. The looters must repay the State.

The most persistent thorn in Zimbabwe’s side is the scourge of corruption. Although it is unworkable to completely wipe out corruption, the vice can at least be reduced if a leaf is plucked from the way Iran has recently dealt with one of its high-profile corruption cases.

An Iranian court has sentenced to death Babak Zanjani, a billionaire who is one of that country’s wealthiest businessmen with a fortune estimated at $14 billion, over several accounts of financial corruption. The billionaire stole over $2,7 billion state funds from oil sales he made on behalf of government. That crime was classified as “corruption on earth”, an Islamic term referring to the most serious offences that carry the death penalty under Iran’s Islamic Penal Code.

When Iran was still under Western sanctions over its nuclear project, Zanjani helped former president Mahmud Ahmadinejad’s government to evade oil sanctions by using a web of companies that stretched from the United Arab Emirates, Turkey and Malaysia to sell millions of barrels of oil since 2010.

His arrest came shortly after the election of President Hassan Rouhani in 2013. President Rouhani had ordered a crackdown on financial corruption especially on privileged figures who had taken advantage of economic sanctions during Ahmadinejad’s rule.

Apart from the capital punishment, Zanjani and two of his accomplices are to pay restitution to state and also pay a fine equivalent to a quarter of the money laundered.

This Iranian experience is quite analogous to that of Zimbabwe. As such, there are a number of lessons to be learnt from it.

Corruption has been an albatross around the neck of Government efforts to turn around the economy. Considering its grave impact on society, that plague must also be classified as “corruption on earth” here in Zimbabwe. Those who contribute to its spread and expansion must face severe punishment.

There are privileged figures here as well who committed “corruption on earth” hiding behind sanctions. It is high time that Government descends on them. Before they face their fate, they must pay back all the money they stole from the State.

The diamond sector is one area where corruption raised its ugly face while the corrupters blinded the authorities in the name of sanctions. The discovery of diamonds in Chiadzwa had raised a ray of hope that the economy would grow. Unfortunately, the Government entrusted corrupt parasites to exploit the God-given resource.

When diamonds were discovered in Chiadzwa, there were relentless efforts by the West to block their sale on the spurious argument that they were conflict or blood diamonds. The attempt to blacklist the Zimbabwean gem coupled with Western sanctions stifled the open sale of same. The discreet sale of the gem was done to bypass sanctions. It was during that time that unscrupulous people took advantage to loot the diamonds, the same way that Zanjani did in Iran. There was a lot of secrecy in the trading of the gem which resulted in Government losing billions of dollars in revenue.

During a recent televised interview, President Robert Mugabe admitted that the nation had not received much from the diamond industry.

“… we have not received much from the diamond industry at all. Not much by way of earnings. I don’t think we have exceeded $2 billion or so, and we think that well over $15 billion or so have been earned in that area,” said President Mugabe.

“So, where have our carats been going, the gems?” the President asked. It is a crucial question which must find fitting answers. The nation awaits a satisfactory explanation, more so after pinning so much hope on the discovery of diamonds giving fillip to the economy.

There are people who must answer that question. These are the people who were entrusted by Government to extract the precious stone. Unfortunately, they abused the trust and started building Hollywood-type lifestyles.

“… our people whom we expected to be our eyes and ears have not been able to hear or see what was going on,” said President Mugabe. Where were the Zimbabwe Mining Development Corporation (ZMDC), Minerals Marketing Corporation of Zimbabwe (MMCZ) and the Ministry of Mines and Mining Development when all the looting was going on?

Fifteen billion dollars is a lot of money. Considering that Zimbabwe has an annual budget of less than $5 billion, $15 billion could have taken the nation through several years. Government cannot just wink at such colossal looting. It is more than the Islamic definition of “corruption on earth”.

Although some people are dismissing this figure, the bottom line is there was gross illicit diamond trading. After all, there is no way the diamond companies can declare the actual revenues.

While the move to have a consolidated operation in Chiadzwa where Government will take full charge is commendable, the first step must be to recover the looted money. The looters must repay the State.

The arrest of diamond looters will demonstrate Government’s political commitment to the fight against high- profile corruption, so often cited by some quarters as lacking. It will send a message that even financially powerful people can be arrested. Zimbabwe has of late been accused of targeting small fish involved in low-profile corruption. Iran arrested a billionaire, why can that not happen here also?

There has been a lot of noise about Government’s decision to monopolise diamonds mining. That noise borders on politicking and is not in any way informed by economic reasoning. That decision is the best under the circumstances. These looters must not be seen anywhere near the Consolidated Diamond Mining Corporation. Zimbabwe cannot have a consortium of looters again.

The diamond mining activities at Chiadzwa and the reinvesting of proceeds in the economy and welfare of citizens had the potential to fuel economic growth in Zimbabwe. This is what happened in Botswana.

Diamond mining in Botswana allowed it to grow from one of the poorest countries in the world when it became independent in 1966 to a middle income nation. Because of the diamonds, Botswana transformed itself into Africa’s third richest nation in per capita terms.

They can afford free education up to high school; the same with health care. The Government can cover for its citizens’ specialist treatment abroad including air tickets.

De Beers did not just plunder Botswana. It is involved in massive social responsibility that has transformed Botswana’s infrastructure. It has built schools, hospitals and roads as well as helping the nation to deal with HIV and AIDS.

The diamond industry in Zimbabwe has been partially visible in soccer only. Chiadzwa is home to the poorest communities in the country. They were taken aback when the diamond companies announced that the alluvial gem was gone when they have not yet seen anything to show for the precious resource discovered in their land.

Surely, the country’s forbearers would turn in their graves if as stewards we failed to account for this God-given natural resource.

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  • Kuta Kinte

    I am also compelled to agree with this thoughtful school. The looted money has to be recovered first and appropriate action taken against the greedy worms. Zimbabwe is currently very desperate for economic development and growth. We will continue to sing this recovery song until we recover something very tangible for the fiscus. We have to move out of this painful economic quagmire at all costs. The looted money has to be recovered.