Mugabe: Diamonds can revive Zimbabwean economy

AP

Wednesday, July 14, 2010    

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HARARE, Zimbabwe — Zimbabwe's president said yesterday his nation will sell its massive reserves of diamonds despite not receiving authorization from the world's diamond control body.

A defiant President Robert Mugabe yesterday told lawmakers diamond sales have "huge potential" to revive the shattered economy. He said Zimbabwe can account for one-fourth of the world's diamond supply.

The Kimberley Process diamond certification scheme has not authorised international sales amid allegations of killings, human rights violations and corruption in the massive diamond fields discovered in eastern Zimbabwe in 2006.

"No one should doubt our resolve to sell our diamonds," Mugabe told lawmakers at the ceremonial opening of the Parliament in Harare.

Criticism by Western nations and human rights groups deadlocked a Kimberly Process meeting in Israel last month that sought approval for the sales after a regional monitor of the control body reported Zimbabwe had met minimum international diamond mining standards.

Mugabe said Zimbabwe's Western adversaries wanted "absurd" conditions put in place to block the diamond sales.

"We have to remain rooted in the reality we are the sole guarantors of our economic emancipation," he said.

Critics of Mugabe say his economic policies have contributed to precipitous economic decline in a decade of political turmoil that included the often violent seizures of thousands of white-owned farms that disrupted the agriculture-based economy.

Mugabe acknowledged yesterday that key infrastructure -- including power and water utilities, roads and transport services -- had fallen into disrepair and housing programs had come to a standstill over the past decade.

Mining experts estimate that Zimbabwe's diamond fields, sealed off by police and troops in the districts of Marange and Chiadzwa near the eastern city of Mutare, are likely the biggest deposits found in Africa since the Kimberley fields were discovered in neighboring South Africa a century ago.

The mines ministry says it already has about US$1.7 billion of diamonds in storage ready to be sold. Zimbabwe's total international debt is estimated at around US$5.5 billion.

Consignments of diamonds have been sold illegally. Earlier this year, one shipment was detected in Dubai and police in neighboring Mozambique reported arresting alleged diamond dealers carrying more than US$1 million in cash hidden in their car near Zimbabwe's porous eastern border.

Finance Minister Tendai Biti, a top official of the former opposition Movement for Democratic Change in a fragile coalition with Mugabe's ZANU PF party, said Monday many Zimbabweans were still suffering from malnutrition despite the potential for the country's diamond wealth to restore collapsed social, health and education services and repair the country's agricultural infrastructure.

Zimbabwe's diamond producer status is scheduled to again come under review Wednesday at a meeting of the World Diamond Council in St. Petersburg, Russia.

The mines ministry, controlled by Mugabe's party in the coalition with Prime Minister Morgan Tsvangirai, the former opposition leader, denies wrongdoing and accuses human rights groups of "peddling falsehoods" over rights violations.

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