Maravi

(NEWZIMBABWE) Sanctions not a factor in Zim's access to loans: US

COMMENT - What a strange spin. ZDERA is very clear, and mentions the IMF as one of the institutions where the director is directed by the Secretary of the Treasury to veto or vote against loans and credit extended to the government of Zimbabwe:

" “There never has been any connection between U.S. sanctions and Zimbabwe's relationship with the IMF,” James Garry, Economic Officer at the U.S. Embassy, told journalists at a roundtable discussion on Wednesday. "

Actually Section 3, Clause 1 is very clear:

" SEC. 3. DEFINITIONS.

In this Act:

(1) INTERNATIONAL FINANCIAL INSTITUTIONS- The term `international financial institutions' means the multilateral development banks and the International Monetary Fund. "

So how could it be that there " never has been any connection between U.S. sanctions and Zimbabwe's relationship with the IMF ", when the IMF is one of the institutions listed where a US director is directed to veto "

(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. "?


Sanctions not a factor in Zim's access to loans: US
by
26/02/2010 00:00:00

A DIPLOMAT at the American Embassy in Harare says U.S. sanctions are not a factor in Zimbabwe’s relations with multi-lateral lenders such as the International Monetary Fund (IMF) and the World Bank.

“There never has been any connection between U.S. sanctions and Zimbabwe's relationship with the IMF,” James Garry, Economic Officer at the U.S. Embassy, told journalists at a roundtable discussion on Wednesday.

Garry explained that even if the Zimbabwe Democracy and Economic Recovery Act (ZDERA) was to be repealed today, Zimbabwe would still not be able to access loans because of its arrears with the multi-lateral lenders. Arrears made Zimbabwe ineligible for loans even before ZDERA became law in December 2001.

“There is a widespread misapprehension that the U.S. has some kind of veto at the IMF. It is not true. The IMF, for example, makes most of its decisions by majority vote, and voting strength is assigned essentially according to the country’s financial interest in the Fund. The U.S. has just 16.77 percent of the voting power at the IMF, and it is not in a position to veto IMF decisions,” said Garry.

On February 19, the Executive Board of the International Monetary Fund announced its decision to restore Zimbabwe’s voting and related rights, and its eligibility to use resources from the IMF’s General Resources Account (GRA), following a request from Zimbabwe’s Finance Minister Tendai Biti.

Notwithstanding the restoration of the eligibility to use GRA resources, said the IMF, Zimbabwe will not be able to use resources from the GRA or the Poverty Reduction and Growth Trust (PRGT) until it fully settles its arrears of about US$140 million.

Garry said the restoration of Zimbabwe’s IMF voting rights announced by the IMF last week opens the door to closer cooperation with the IMF, noting that Zimbabwe must take further steps before it can borrow again from the IMF. He said Zimbabwe’s arrears with other multilateral lenders such as the African Development Bank and the World Bank also need to be addressed.

The US imposed sanctions in 2001 "to provide for a transition to democracy and to promote economic recovery in Zimbabwe". Apart from banning trade with certain Zimbabwean companies, including banks, the sanctions impose a travel ban and assets freeze on President Robert Mugabe and dozens of senior government officials.

Further, the sanctions regime directs United States citizens sitting on the boards of international financial institutions to vote against "any extension by the respective institution of any loan, credit, or guarantee to the government of Zimbabwe" and to opposes "any cancellation or reduction of indebtedness owed by the government of Zimbabwe to the United States or any international financial institution."

Labels: IMF, SANCTIONS, ZDERA

posted by MrK @ 3:20 PM