Maravi

(SUNDAY MAIL ZW) World Bank engages Government over debt

COMMENT - Is The Herald now staffed with MDC activist? Just wondering. Of course arrears cannot be addressed, according to ZDERA Section 4C (2), which states:

... the Secretary of the Treasury shall instruct the United States executive director to each international financial institution to oppose and vote against--

(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.

So after a decade of building up Zimbabwe's debt and preventing "cancellation or reduction of indebtedness" the World Bank now says it is 'concerned about arrears'.

The best way out for Zimbabwe is to default on all it's debt with the IMF/World Bank, and start with a clean slate, by starting to exploit their diamond reserves. Bank wich China instead.

World Bank engages Government over debt
Sunday, 04 March 2012 00:00
Africa Moyo Business Correspondent

The Government is understood to be in talks with the World Bank to explore ways of settling Zimbabwe’s arrears with the Bretton Woods institution. Zimbabwe owes the World Bank about US$900 million but the financier is not keen on bailing out the country until the arrears are settled.

In an exclusive interview on the sidelines of a World Bank conference on conflict, security and development in Harare last week, World Bank Zimbabwe country manager Mr Peter Nicholas said the bank is unable to extend new loans to Zimbabwe until arrears are addressed.

Mr Nicholas confirmed Government and the World Bank were in talks that would result in payment of the debt.

“We are in discussion with the Government of Zimbabwe to see how they can settle the arrears,” said Mr Nicholas.

Asked what Government is proposing in its bid to pay the debt, Mr Nicholas said:

“They (Government) have told us that they are looking at a hybrid strategy of settling the arrears where they will seek debt relief and use their minerals.”

He referred further questions to Finance Minister Tendai Biti.

Mr Nicholas said given the “significant” arrears, Zimbabwe’s chances of getting financial assistance from the World Bank are “uncertain”.

“It’s uncertain because there are significant arrears; US$900 million is very significant and you wouldn’t want to extend any new loans under such circumstances.

“The bank firmly believes that the debt has to be addressed first before new loans could be extended to Zimbabwe,” he said.

The country’s political, monetary and fiscal authorities are reportedly enmeshed in frank discussions on how best the country could settle its debt with various multilateral financial institutions.

Harare’s arrears to various multilateral financial institutions are estimated at US$9 billion.

Some of the international institutions owed include the International Monetary Fund, the AfDB and the Paris Club.

The World Bank, through one of its units — the Economic Policy and Debt Department (PRMED) — is understood to be in favour of Zimbabwe declaring itself a Heavily Indebted Poor Country (HIPC).

Reserve Bank of Zimbabwe (RBZ) Governor Dr Gideon Gono recently waded into the high-stakes issue and proposed that the country should “securitise its minerals” instead of pursuing the HIPC route.

Economic Planning and Investment Promotion Permanent Secretary Dr Desire Sibanda told journalists recently said the country would not rush to pay the huge debt at the expense of addressing pressing social issues such as health and education.

Dr Sibanda admitted that moves to declare the country a HIPC have come under the microscope and the issue has suddenly turned into a “hot political potato”.

Mr Nicholas said until the debt was attended to, the World Bank would only help Zimbabwe to resuscitate its infrastructure by offering development support.

“For instance, we have a programme that focuses on poverty alleviation where we are providing seed and fertiliser to vulnerable families. We are also supporting a huge sanitation project in Beitbridge,” he said.

The Beitbridge project is designed to improve access to quality water supply and sanitation services in the border town.

The project is divided into three main activities — water treatment and rehabilitation, with a focus on rehabilitation of the abstraction system; rehabilitation of water treatment works, and improvement of the water distribution system and installation of 400 water meters.

An estimated 40 000 people in Beitbridge, including those passing through the border town, are set to benefit from the project.

Labels: DEBT, NEOCOLONIALISM, TENDAI BITI, World Bank, ZDERA

posted by MrK @ 6:57 PM