Maravi

(TALKZIMBABWE) IMF ready to help Zimbabwe

IMF ready to help Zimbabwe
Itayi GARANDE
Tue, 16 Sep 2008 03:03:00 +0000

THE International Monetary Fund on Monday expressed a willingness to work with the government of Zimbabwe if it can show clear policy commitments to tackle the economic crisis currently facing the country.

The organisation – oversees the global financial system by following the macroeconomic policies of its member countries – says that it first needs to make clear commitments to rescue the economy and engage the international community for stabilization policies to be initiated in Zimbabwe currently facing an inflation of over 11 000 000 per cent.

IMF Managing Director Dominique Strauss-Kahn hailed the signing of the power-sharing agreement between President Robert Mugabe and opposition leaders Morgan Tsvangirai (Zimbabwe’s new Prime Minister) and Prof. Arthur Mutambara (one of the two proposed Deputy Prime Ministers).

He said the unity accord presented a chance to reverse the economic crisis facing the country.

"We stand ready to discuss with the new authorities their policies to stabilize the economy, improve social conditions, and reduce poverty," Strauss-Kahn said in an emailed statement to the Zimbabwe Guardian.

"I encourage the government to take steps to show clear commitment to a new policy direction and to seek the support of the international community," he added.

On September 24, 2001, Zimbabwe was declared ineligible to use IMF's general resources and was removed from the list of countries eligible to use resources under the IMF's Poverty Reduction and Growth Facility.

The Executive Board of the Fund – which also offers financial and technical assistance to its members – suspended Zimbabwe's voting rights and other rights in June 2003 “after having determined that Zimbabwe had not sufficiently strengthened its cooperation with the IMF in areas of policy implementation and payments.”

The suspension was viewed by the Zimbabwe government as part of the sanctions regime imposed by the West on the Southern African country in response to the Fast Track Land Reform Programme which displaced white farmers from commercial farming lands.

Zimbabwe was, however, not suspended from the Fund but could no longer appoint a Governor or Alternate Governor to the Washington-based organisation, participate in the election of an Executive Director for the Fund’s Board, or cast its vote in decisions on IMF policy or country matters. This decreased Zimbabwe’s credit rating, increased its risk factor and the country could not borrow from the Fund for macro-economic stabilization purposes.

The global lender has maintained its suspension of financial and technical assistance to President Robert Mugabe's government, although in 2006 the country settled its major financial obligations under the Fund’s General Resources Account averting forced expulsion.

Zimbabwe expected the payment to help in unlocking new foreign aid, but the IMF maintained its stance of not lending to the country.

Other key Western donors, including the Bretton Woods twin to the IMF, the World Bank also suspended financial aid to Zimbabwe over the land redistribution programme.

BILATERAL AND MULTILATERAL ARRANGEMENTS

Strauss-Khan urged the new all-inclusive government to also seek assistance from international bilateral and multilateral donors.

President Thabo Mbeki of South Africa, at yesterday’s signing ceremony of the unity deal, urged the international community to assist in the reconstruction of Zimbabwe.

He urged Zimbabwe's neighbours and the rest of Africa to help the country acquire seed, fertilizers and fuel and farm implements for the next planting season, which was imminent.

This call was also echoed by King Mswati III of Swaziland, who is the Chairman of the Sadc Organ for Politics, Defence and Security, immediately called for the lifting of economic sanctions imposed on Zimbabwe by the EU, US, World Bank and IMF.

Meanwhile the EU and the US say there will be no immediate end to sanctions on Zimbabwe.

In a statement, the 27 EU foreign ministers said the measures would continue until the new government took steps to restore democracy.

The ministers, who meet once every month, said they would watch for the agreement's implementation, especially the "immediate cessation of all forms of intimidation and violence" and would review their position next month.

Labels: IMF

posted by MrK @ 3:30 AM