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(TALKZIMBABWE) Biti pushes for HIPC status, again

Biti pushes for HIPC status, again
Tue, 19 Jan 2010 03:26:00 +0000

Finance Minister Tendai Biti displays the briefcase containing the 2010 National Budget to the media upon his arrival at the Parliament Building in Harare, December 2, 2009. REUTERS/Philimon Bulawayo

FINANCE Minister Tendai Biti has become relentless in seeking highly indebted poor country status for Zimbabwe. He wants the country's $6 billion international debt cancelled.

According to Biti HIPC status will "help spur economic growth", he said on Monday. This is despite hios claims that the country will achieve a 7% growth this year, even without HIPC status.

Prime Minister Morgan Tsvangirai's Movement for Democratic Change (MDC-T) of which Biti is Secretary General has failed to get the much promised foreign aid, from its western funders.

Zimbabwe has enlisted the support of the African Development Bank (AfDB) to draft a debt relief plan that would unlock access to international finance.

"There is a huge opportunity cost Zimbabwe is suffering as a result of the stifling debt. Without the debt overhang we would be growing by 15 percent annually," Biti told reporters in Harare after meeting a visiting team of senior AfDB officials.

Biti said while there were divergent views on the debt clearance strategy, seeking HIPC status "was the best option" despite having failed across the continent.

HIPC status failed to extricate Zambia from its economic problems. The U.S. dollar amounts of debt service owed by Zambia, Burkina Faso and Mali, among others increased under the HIPC debt initiative.

Besides, HIPC status requires the government to have an Enhanced Structural Adjustment Facility (ESAF), similar to the ESAP adopted by Zimbabwe in the 1990s.

ESAF provides concessional loans so governments can, as claimed, keep up with debt repayments as they implement IMF prescriptions to rein in inflation, cut
public spending, and open local markets to international trade, commercial lending and foreign ownership.

This policy was disastrous for Zimbabwe and drove millions into poverty.

"There is no consensus position yet in Cabinet, but I've said give me an alternative that allows us to get this debt serviced without prejudicing our meagre resources," Biti said, adding that the government would make a "bold" decision on the matter within the first quarter of 2010.

Visiting AfDB vice president for operations, Aloysius Ordu said although Zimbabwe's power-sharing government had made progress, there would be no full co-operation until Zimbabwe resolved the debt issue.

"The Zimbabwe government has asked AfDB to assist with this process of re-engaging multilateral finance institutions."

Labels: HIPC, NEOLIBERALISM, TENDAI BITI

posted by MrK @ 5:47 AM