99–010 

Calendar No. 699 

111TH CONGRESS REPORT " ! SENATE 2d Session 111–369 

ZIMBABWE TRANSITION TO DEMOCRACY AND 

ECONOMIC RECOVERY ACT OF 2010 

DECEMBER 15, 2010.—Ordered to be printed 

Mr. KERRY, from the Committee on Foreign Relations, 

submitted the following 

R E P O R T 

[To accompany S. 3297] 

The Committee on Foreign Relations, having had under consideration the bill (S. 3297), to update United States policy and authorities to help advance a genuine transition to democracy and to promote economic recovery in Zimbabwe, reports favorably thereon, 

with an amendment in the nature of a substitute, and recommends 

that the bill (as amended) do pass. 

CONTENTS 

Page 

I. Purpose ........................................................................................................... 1 

II. Committee Action .......................................................................................... 1 

III. Discussion ....................................................................................................... 2 

IV. Cost Estimate ................................................................................................. 5 

V. Evaluation of Regulatory Impact .................................................................. 6 

VI. Changes in Existing Law .............................................................................. 6 

I. PURPOSE

The purpose of S. 3297 is to amend the 2001 Zimbabwe Democracy and Economic Recovery Act (ZDERA) to acknowledge that conditions on the ground in Zimbabwe have changed, seize upon new 

opportunities to push for democracy and help lay the groundwork 

for economic recovery, and encourage the work of reformers in the 

government while recognizing the continuing role played by Robert 

Mugabe. 

II. COMMITTEE ACTION

Senators Feingold, Isakson, Kerry, Cardin, and Durbin, introduced S. 3297 on May 4, 2010. On September 21, 2010, the committee considered S. 3297 and ordered it reported favorably, with 

an amendment in the nature of a substitute, by voice vote. 


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III. DISCUSSION

For decades Zimbabwe’s dismal political and economic climate 

has been dictated by President Robert Mugabe and his party, the 

Zimbabwean African National Union-Patriotic Front (ZANU-PF). 

This misrule culminated in economic disaster, the collapse of 

health and educational systems, and extreme repression. In September 2008, after strongly contested national elections and 

months of political violence against opposition members and their 

supporters, ZANU-PF and both factions of the opposition Movement for Democratic Change (MDC), led by Morgan Tsvangirai and 

Arthur Mutambara signed a Global Political Agreement (GPA) as 

mediated by President Thabo Mbeki of South Africa. Under the 

GPA, the transitional government agreed to pursue the restoration 

of the rule of law, economic recovery, land reform, freedom of expression and political association, a new constitution, nondiscrimination, and free and fair elections. Though fragile and 

often subject to abuse by ZANU-PF, this power-sharing agreement 

has created new opportunities to push for democracy and lay the 

groundwork for economic recovery. 

The new transitional government has shown some tentative 

signs of progress. Under the leadership of Prime Minister Morgan 

Tsvangirai and Minister of Finance Tendai Biti, a series of economic reforms have been initiated, including the Short-Term Economic Recovery Program, that will halt some of the destructive activities of the previous administration while directing limited resources to the social services and infrastructure projects the population urgently needs. On the financial front more broadly, Finance 

Minister Biti has succeeded in arresting runaway inflation and 

helping to restore some productive economic activity. Store shelves 

are no longer barren and there has been some progress in restoring 

health services and reopening schools. In a step toward broader 

democratic values, the transitional government has also established the Media, Human Rights, and Electoral Commissions. 

However, political and social progress has lagged far behind economic advancements. Governance reforms are desperately needed, 

political and human rights abuses continue, and unemployment remains as high as 90 percent. The committee nonetheless sees a moment of opportunity for constructive engagement, with targeted 

pressure and without the lifting of sanctions, which can support reformist elements of the government of Zimbabwe. These steps were 

strongly encouraged by a distinguished panel of outside witnesses 

in a hearing on September 30, 2009. 

The goal of this engagement is to reinforce and encourage democratic and human rights reforms, poverty reduction, humanitarian 

assistance, establishment of rule of law, economic stabilization and 

infrastructure development. Full re-engagement with the government of Zimbabwe will only be possible when there have been clear 

advances toward these ends. For long term success, it is critical to 

support non-governmental organizations and civil society. Regional 

collaboration will also be crucial, particularly through the Southern 

African Development Community and the African Union. This legislation provides impetus for these initial steps by acknowledging 

changing political and economic realities and the limitations of 

change to date. 


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Section 4 affirms that it is the policy of the United States to: support the people of Zimbabwe through the continued provision of humanitarian assistance; provide resources to the agricultural, economic, education, and health sectors through non-governmental entities; promote trade with non-sanctioned entities in Zimbabwe; engage with regional governments and organizations, international financial institutions, and other donors’ support for civil society organizations; assist those who have demonstrated commitment to the 

reforms in the GPA; continue the ban on the transfer of defense 

items and direct monetary assistance; and, update and renew targeted financial sanctions and travel bans against those found to be 

responsible for the breakdown of the rule of law, politically motivated violence, hindrance of democracy, and other ongoing illegal 

activities in Zimbabwe. 

Section 5 authorizes the President, in accordance with section 

531 of the Foreign Assistance Act of 1961, as amended (22 U.S.C. 

2346), to provide technical assistance to ministries of the transitional Government and to the Parliament of Zimbabwe to provide 

the expertise and support necessary to ensure progress on economic, political, and security sector reforms. As per the amended 

language, this notwithstanding authority will expire on September 

30, 2014. The transitional Government is expected to work to enact 

the reforms under the GPA and the Parliament should work to 

make the government accountable for its actions. To strengthen the 

efforts of reformers, the committee believes the United States 

should continue to provide technical assistance that will lead to capacity building in the ministries and offices that have shown commitment to reform and to Parliamentary efforts to address legislation that violates democratic principles. 

The committee believes two efforts are particularly critical to economic progress: land reform and food distribution and production. 

Given the absence of respect for property rights in Zimbabwe, S. 

3297 seeks to support efforts to conduct a comprehensive and nonpartisan land audit that will serve as a step toward the establishment of accountability and security of tenure. The committee believes that efforts related to food distribution and production 

should be supported, including the encouragement of policies that 

incentivize agricultural production and institutions that provide 

support to the agricultural sector. Though existing problems with 

land tenure, including violent seizures of land by ZANU-PF and its 

supporters, may limit some efforts, the committee believes support 

of market-based mechanisms for agricultural production and the 

processing of agricultural commodities would be important for further economic progress. 

Section 7 amends Section 4 of the Zimbabwe Democracy and Economic Recovery Act of 2001 to reflect the 2008 Global Political 

Agreement and the evolving political conditions that require the 

United States to employ greater flexibility in dealing with the 

International Financial Institutions while still maintaining strong 

conditions on relevant actors. In becoming party to the GPA, 

ZANU-PF and MDC have committed themselves to working together to prioritize the restoration of economic stability and growth 

and the creation of conditions for a new constitution that respects 

human rights and democratic principles. In amending the previous 

legislation, S. 3297 requires the Secretary of the Treasury, in conVerDate Mar 15 2010 03:19 Dec 17, 2010 Jkt 099010 PO 00000 Frm 00003 Fmt 6659 Sfmt 6602 E:\HR\OC\SR369.XXX SR369

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sultation with the Secretary of State, to gather information on the 

debt incurred by Zimbabwe and the feasibility and advisability of 

restructuring, rescheduling, or eliminating such debt in the future. 

The legislation requires the Secretary of the Treasury to instruct 

U.S. executive directors to each international financial institution 

to oppose any extension of loans, credit, or guarantees unless there 

is sufficient oversight and it can be ensured the relevant funds are 

not administered through ministries that have not demonstrated 

commitment to reform and responsible fiscal management or the 

Reserve Bank of Zimbabwe, unless governance problems within the 

Reserve Bank have been addressed. Section 7 further provides that 

funds cannot be administered by individuals or institutions sanctioned by the United States. The legislation does not lift any current sanctions. It further requires that the Secretaries of the Treasury and State notify appropriate Congressional committees if the 

United States votes in favor of any loan, credit, or guarantee to the 

Government of Zimbabwe by an international financial institution. 

The President is able to waive the conditions on multilateral financing upon notification that it is in the national interest of the 

United States to do so. 

Section 8 amends the Department of State, Foreign Operations, 

and Related Programs Appropriations Act of 2010 to prohibit assistance to the central government of Zimbabwe unless funds are 

used toward macroeconomic growth, health, and education assistance. If the Secretary of State determines and reports to the appropriate committees that rule of law has been restored in Zimbabwe 

the underlying prohibition is removed. 

Section 9 directs new attention to ZANU-PF’s illegal activities in 

the diamond sector, finding that: armed forces of Zimbabwe continue to exert control over diamond mines; the Government of 

Zimbabwe has been non-compliant with the minimum standards of 

the Kimberley Process; there are serious concerns, particularly related to smuggling and grave violence in and around the Marange 

diamond fields; and, the army and police forces continue to serve 

ZANU-PF and fuel efforts to undermine democratic processes and 

institutions. The committee is seriously concerned about the issue 

of Zimbabwean diamond production and Zimbabwe’s certification 

under the Kimberley Process. It also finds that there should be improved regional efforts to help stop the flow of illegal diamonds as 

well as efforts to identify and prepare bilateral or other sanctions 

on individuals and entities that are undermining democratic processes through illegal activities involving diamonds. 

Section 10 encourages the review and update of targeted sanctions related to Zimbabwe, paying attention to the ways that individuals or entities support efforts to undermine democratic processes, the role and function of these entities in activities critical to 

economic recovery, and how sanctions could be strengthened 

against them. 

Given concerns over fraud and violence during the 2008 elections 

and the lack of clarity on upcoming elections, Section 11 sets out 

the sense of Congress that the United States develop a coordinated 

strategy to help prepare for future elections. This should be done 

in concert with international partners and regional governments, 

aiming to reduce the likelihood of fraud and the potential for outbreaks of violence. 


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Section 12 requires the Secretary of the Treasury, the Secretary 

of State, and the Administrator of the U.S. Agency for International Development to provide a briefing to appropriate congressional committees that is to include (1) A description of technical 

assistance that has been provided to ministries of the transitional 

Government and to the Parliament of Zimbabwe, how this has contributed to progress on economic and political reforms, and any 

ways U.S. law are policy should be changed to strengthen the likelihood of success for democratic and economic reforms; (2) Steps 

taken to investigate and address the connection between illegal activities involving diamonds and efforts to undermine democratic 

processes and institutions; (3) Steps taken to review and update 

targeted sanctions, focusing on how specific entities undermine 

democratic processes, the role of these entities to economic recovery, and how sanctions can be strengthened against them; and, (4) 

Efforts toward a regional coordinated strategy in preparation for 

future elections in Zimbabwe. This briefing is to be provided no 

later than 180 days after the enactment of this legislation. 

IV. COST ESTIMATE

In accordance with Rule XXVI, paragraph 11(a) of the Standing 

Rules of the Senate, the committee provides this estimate of the 

costs of this legislation prepared by the Congressional Budget Office. 

UNITED STATES CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, December 3, 2010. 

Hon. JOHN F. KERRY, 

Chairman, Committee on Foreign Relations, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 3297, the Zimbabwe Transition to Democracy and Economic Recovery Act of 2010. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Sunita D’Monte. 

Sincerely, 

DOUGLAS W. ELMENDORF. 

Enclosure 

cc: Hon. RICHARD G. LUGAR, Ranking Minority Member. 


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CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

December 3, 2010. 

S. 3297 

Zimbabwe Transition to Democracy and Economic 

Recovery Act of 2010 

AS ORDERED REPORTED BY THE SENATE COMMITTEE ON FOREIGN

RELATIONS ON SEPTEMBER 21, 2010

S. 3297 would authorize the President to use the Economic Support Fund (ESF), a Department of State assistance program to provide technical assistance to Zimbabwe to support economic, political, and security-sector reforms in that country. That authority 

would expire in 2014. Assistance would be provided to the Parliament and ministries of the transitional government. CBO estimates that implementing the bill would cost $19 million over the 

2011–2015 period, assuming appropriation of the necessary 

amounts. Enacting S. 3297 would not affect direct spending or revenues; therefore, pay-as-you-go procedures do not apply. 

S. 3297 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

impose no costs on state, local, or tribal governments. 

The estimated budgetary impact of S. 3297 is shown in the following table. The costs of this legislation fall within budget function 150 (international affairs). For this estimate, CBO assumes 

that the estimated authorizations will be appropriated each fiscal 

year and that outlays will follow historical spending patterns for 

similar and existing programs. 

Changes in Spending Due to S. 3297 

By Fiscal Year, in Millions of Dollars 

20011 2012 2013 2014 2015 2011– 

2015 

Estimated Authorization Level ............................ 6 6 6 6 0 24 

Estimated Outlays ............................................... 1 3 5 5 5 19 

In 2010, the Department of State received an appropriation of 

$8.8 billion for ESF. Of that amount, almost $6 million was allocated for technical assistance to the Parliament of Zimbabwe and 

certain ministries. Based on information from the department, 

CBO estimates that implementing the bill would require appropriations of $6 million a year over the 2011–2014 period. The bill also 

would expand the potential uses of existing appropriated funds by 

authorizing assistance to the central government for health and 

education programs; however, the department has no plans to use 

such authority. 

The CBO staff contact for this estimate is Sunita D’Monte. The 

estimate was approved by Theresa Gullo, Deputy Assistant Director for Budget Analysis. 


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V. EVALUATION OF REGULATORY IMPACT

Pursuant to Rule XXVI, paragraph 11(b) of the Standing Rules 

of the Senate, the committee has determined that there is no regulatory impact as a result of this legislation. 

VI. CHANGES IN EXISTING LAW

In compliance with Rule XXVI, paragraph 12 of the Standing 

Rules of the Senate, changes in existing law made by the bill, as 

reported, are shown as follows (existing law proposed to be omitted 

is enclosed in black brackets, new matter is printed in italic, existing law in which no change is proposed is shown in roman). 


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ZIMBABWE DEMOCRACY AND ECONOMIC RECOVERY 

ACT OF 2001, P.L. 107–99 

* * * * * * * 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Zimbabwe Democracy and Economic Recovery Act of 2001’’. 

SEC. 2. STATEMENT OF POLICY. 

It is the policy of the United States to support the people of 

Zimbabwe in their struggle to effect peaceful, democratic change, 

achieve broad-based and equitable economic growth, and restore 

the rule of law. 

SEC. 3. DEFINITIONS. 

* * * * * * * 

øSEC. 4. SUPPORT FOR DEMOCRATIC TRANSITION AND ECONOMIC RECOVERY. 

ø(a) FINDINGS.—Congress makes the following findings: 

ø(1) Through economic mismanagement, undemocratic practices, and the costly deployment of troops to the Democratic 

Republic of the Congo, the Government of Zimbabwe has rendered itself ineligible to participate in International Bank for 

Reconstruction and Development and International Monetary 

Fund programs, which would otherwise be providing substantial resources to assist in the recovery and modernization of 

Zimbabwe’s economy. The people of Zimbabwe have thus been 

denied the economic and democratic benefits envisioned by the 

donors to such programs, including the United States. 

ø(2) In September 1999 the IMF suspended its support 

under a ‘‘Stand By Arrangement’’, approved the previous 

month, for economic adjustment and reform in Zimbabwe. 

ø(3) In October 1999, the International Development Association (in this section referred to as the ‘‘IDA’’) suspended all 

structural adjustment loans, credits, and guarantees to the 

Government of Zimbabwe. 

ø(4) In May 2000, the IDA suspended all other new lending 

to the Government of Zimbabwe. 

ø(5) In September 2000, the IDA suspended disbursement of 

funds for ongoing projects under previously-approved loans, 

credits, and guarantees to the Government of Zimbabwe. 

ø(b) SUPPORT FOR DEMOCRATIC TRANSITION AND ECONOMIC RECOVERY.— 

ø(1) BILATERAL DEBT RELIEF.—Upon receipt by the appropriate congressional committees of a certification described in 

subsection (d), the Secretary of the Treasury shall undertake 

a review of the feasibility of restructuring, rescheduling, or 

eliminating the sovereign debt of Zimbabwe held by any agency of the United States Government. 


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ø(2) MULTILATERAL DEBT RELIEF AND OTHER FINANCIAL ASSISTANCE.—It is the sense of Congress that, upon receipt by the 

appropriate congressional committees of a certification described in subsection (d), the Secretary of the Treasury 

should— 

ø(A) direct the United States executive director of each 

multilateral development bank to propose that the bank 

should undertake a review of the feasibility of restructuring, rescheduling, or eliminating the sovereign debt of 

Zimbabwe held by that bank; and 

ø(B) direct the United States executive director of each 

international financial institution to which the United 

States is a member to propose to undertake financial and 

technical support for Zimbabwe, especially support that is 

intended to promote Zimbabwe’s economic recovery and development, the stabilization of the Zimbabwean dollar, and 

the viability of Zimbabwe’s democratic institutions. 

ø(c) MULTILATERAL FINANCING RESTRICTION.—Until the President makes the certification described in subsection (d), and except 

as may be required to meet basic human needs or for good governance, the Secretary of the Treasury shall instruct the United States 

executive director to each international financial institution to oppose and vote against— 

ø(1) any extension by the respective institution of any loan, 

credit, or guarantee to the Government of Zimbabwe; or (2) any 

cancellation or reduction of indebtedness owed by the Government of Zimbabwe to the United States or any international financial institution. 

ø(d) PRESIDENTIAL CERTIFICATION THAT CERTAIN CONDITIONS ARE

SATISFIED.—A certification under this subsection is a certification 

transmitted to the appropriate congressional committees of a determination made by the President that the following conditions are 

satisfied: 

ø(1) RESTORATION OF THE RULE OF LAW.—The rule of law has 

been restored in Zimbabwe, including respect for ownership 

and title to property, freedom of speech and association, and an 

end to the lawlessness, violence, and intimidation sponsored, 

condoned, or tolerated by the Government of Zimbabwe, the 

ruling party, and their supporters or entities. 

ø(2) ELECTION OR PRE-ELECTION CONDITIONS.—Either of the 

following two conditions is satisfied: 

ø(A) PRESIDENTIAL ELECTION.—Zimbabwe has held a 

presidential election that is widely accepted as free and 

fair by independent international monitors, and the president-elect is free to assume the duties of the office. 

ø(B) PRE-ELECTION CONDITIONS.—In the event the certification is made before the presidential election takes 

place, the Government of Zimbabwe has sufficiently improved the pre-election environment to a degree consistent 

with accepted international standards for security and 

freedom of movement and association. 


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ø(3) COMMITMENT TO EQUITABLE, LEGAL, AND TRANSPARENT

LAND REFORM.—The Government of Zimbabwe has demonstrated a commitment to an equitable, legal, and transparent land reform program consistent with agreements 

reached at the International Donors’ Conference on Land Reform and Resettlement in Zimbabwe held in Harare, 

Zimbabwe, in September 1998. 

ø(4) FULFILLMENT OF AGREEMENT ENDING WAR IN DEMOCRATIC REPUBLIC OF CONGO.—The Government of Zimbabwe is 

making a good faith effort to fulfill the terms of the Lusaka, 

Zambia, agreement on ending the war in the Democratic Republic of Congo. 

ø(5) MILITARY AND NATIONAL POLICE SUBORDINATE TO CIVILIAN GOVERNMENT.—The Zimbabwean Armed Forces, the National Police of Zimbabwe, and other state security forces are 

responsible to and serve the elected civilian government. 

ø(e) WAIVER.—The President may waive the provisions of subsection (b)(1) or subsection (c), if the President determines that it 

is in the national interest of the United States to do so.¿ 

SEC. 4. SUPPORT FOR DEMOCRATIC TRANSITION AND ECONOMIC RECOVERY. 

(a) FINDINGS.—Congress finds that the parties to the September 

15, 2008, Global Political Agreement between the Zimbabwe African 

National Union-Patriotic Front (ZANU-PF) and the Movement for 

Democratic Change (MDC) committed themselves by law to work together to chart a new political direction for Zimbabwe, to prioritize 

the restoration of economic stability and growth, and to create conditions for the drafting of a new constitution that respects human 

rights and democratic principles. 

(b) SENSE OF CONGRESS.—It is the sense of Congress that, in 

order for the United States to most effectively support a transition 

to democratic and economic recovery in Zimbabwe to the greatest effect, United States policy should, to the extent possible, reflect new 

political conditions and opportunities created by the Global Political 

Agreement. 

(c) DEBT RELIEF.—The Secretary of the Treasury, in consultation 

with the Secretary of State, shall gather information on the debt incurred by Zimbabwe held by international financial institutions 

and private financial institutions, and the feasibility and advisability of restructuring, rescheduling, or eliminating such debt in 

the future, including by using the resources of the International 

Monetary Fund, the International Bank for Reconstruction and Development, and other appropriate international financial institutions. 

(d) MULTILATERAL FINANCING CONDITIONS.—The Secretary of the 

Treasury shall instruct the United States executive director to each 

international financial institution to oppose any extension by the respective institution of any loan, credit, or guarantee to the Government of Zimbabwe unless the proposed extension meets the following 

conditions: 


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(1) There are sufficient controls for transparency and international oversight of the use of relevant funds. 

(2) Relevant funds, in cases where the international financial 

institutions are providing direct funding to or through the Government of Zimbabwe, will not be administered through or in 

coordination with— 

(A) ministries that have not demonstrated a commitment 

to reform and responsible fiscal management; or 

(B) the Reserve Bank of Zimbabwe, unless there are sufficient guarantees and a pattern of evidence that governance 

problems within the Reserve Bank of Zimbabwe have been 

addressed such that relevant funds will not be redirected 

for extra-legal purposes. 

(3) Relevant funds will not be administered by or directly 

accessible to individuals or financial institutions sanctioned by the United States. 

(e) NOTIFICATION.— (1) IN GENERAL.—If the United States votes in favor of any 

loan, credit, or guarantee to the Government of Zimbabwe by an 

international financial institution, the Secretary of the Treasury, in coordination with the Secretary of State, shall notify the 

appropriate congressional committees within 30 days of such 

vote and provide appropriate information on such vote pertaining to the conditions in subsection (d). 

(2) APPROPRIATE CONGRESSIONAL COMMITTEES DEFINED.—In 

this subsection, the term ‘‘appropriate congressional committees’’ 

means— 

(A) the Committee on Foreign Relations, the Committee 

on Banking, Housing, and Urban Affairs, and the Committee on Appropriations of the Senate; and 

(B) the Committee on Foreign Affairs, the Committee on 

Financial Services, and the Committee on Appropriations 

of the House of Representatives. 

(f) WAIVER.—The President may waive the provisions in subsection (d) and (e) if the President determines that it is in the national interest of the United States to do so. 

Department of State, Foreign Operations, and Related 

Programs Appropriations Act of 2010 

* * * * * * * 

TITLE VII 

GENERAL PROVISIONS

* * * * * * * 

AFRICA

SEC. 7070. (a) Expanded International Military Education and Training.— 

* * * * * * * 

ø(i) ZIMBABWE.— 

ø(1) The Secretary of the Treasury shall instruct the United 

States executive director to each international financial institution to vote against any extension by the respective institution 

of any loans to the Government of Zimbabwe, except to meet 


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basic human needs or to promote democracy, unless the Secretary of State determines and reports in writing to the Committees on Appropriations that the rule of law has been restored in Zimbabwe, including respect for ownership and title 

to property, freedom of speech and association. 

ø(2) None of the funds appropriated by this Act shall be 

made available for assistance for the central government of 

Zimbabwe, except for macroeconomic growth assistance, unless 

the Secretary of State makes the determination pursuant to 

paragraph (1).¿ 

(i) ZIMBABWE.—None of the funds appropriated by this Act may 

be made available for assistance for the central Government of 

Zimbabwe, except for macroeconomic growth, health, and education 

assistance, unless the Secretary of State determines and reports in 

writing to the Committees on Appropriations that the rule of law 

has been restored in Zimbabwe, including respect for ownership and 

title to property and freedom of speech and association. 

Æ 


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