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Sep 20, 2013 | 15:48 GMT

Zimbabwe's Diamond Industry

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Zimbabwe's Diamond Industry

The European Union announced Sept. 17 that sanctions against the Zimbabwe Mining Development Corp., whose diamonds have long buoyed President Robert Mugabe's regime, will be lifted. The decision to lift the sanctions on the Zimbabwe Mining Development Corp. was driven by several countries in pursuit of various national interests. Belgium, for example, has been the EU member most ardently in favor of removing the restrictions, likely because it has long been a global center for the diamond cutting and polishing trade. The country may be hoping to gain an upper hand in the market for Zimbabwean diamonds, the trade of which, despite the sanctions, has continued heavily in several global cutting centers, from Europe to India to Israel.

The push to ease sanctions was also in line with the broader goal in the West, including the United States and the United Kingdom, of engaging the Zimbabwe African National Union-Patriotic Front in a more productive manner. The European Union likely recognizes that a confrontational approach to Harare has failed to moderate Zimbabwe's political or economic policies, so reducing overt hostility may seem like a worthwhile tactic. Moreover, Brussels may hope that supporting Zimbabwe's diamond industry may incentivize additional steps toward political and economic reform.

However, Europe's move will have unintended political consequences in Zimbabwe. Few areas of the Zimbabwean economy generate meaningful revenues, but the Mugabe regime has been able to manipulate mining for factional gain, even while the majority of the country subsists. Instead of smuggling diamonds to international cutters and polishers who had been receiving discounted rates for circumventing sanctions, the Zimbabweans will be able to legally negotiate market prices. This will lead to an increase in the revenues the Zimbabwe African National Union-Patriotic Front will be able to generate from the diamonds that remain under their uncontested control.

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