(NEWZIMBABWE) France likelyX to cancel Zimbabwe debt
05/11/2013 00:00:00
by Gilbert Nyambabvu
ZIMBABWE has been named among the so-called highly indebted poor countries likely to benefit from debt cancelations by the French government next year.
France’s social economy minister Benoît Hamon confirmed the plan Tuesday, saying: "In 2014, an estimated five countries could see their debt completely erased: Somalia, Zimbabwe, Chad, Ivory Coast and Sudan.
“The debt relief is almost immediate, since we are transferring loans made in the past into donations".
It could not be established how much Zimbabwe owes France but the country is chocking under a debt pile estimated at more than $10 billion
The obligations include some $3 billion owed to the Paris Club, about $2 billion to the World Bank and US$600m to the African Development Bank.
Direct support to the government all but vanished after 2002 when western countries imposed sanctions against Harare over allegations of vote fraud and human rights abuses which are denied by President Robert Mugabe and his ruling Zanu PF party.
Mugabe believes former coloniser Britain coerced allies to gang-up and punish his administration for its land reforms which he insists were needed to address historic imbalances in the ownership of the key resource.
The veteran leader, who is banned from travelling to western capitals under the sanctions, recently appealed to France to end the strictures which he blames for the country’s economic problems.
"Can France have a national introspection and see whether it's right to continue to pursue the policy of sanctions against Zimbabwe," Mugabe said last month while meeting diplomats from France, Germany and Holland.
"We must now look at the future and the need for sanctions to go. We want the removal of economic sanctions so we can export beef to Europe. Let's get to trade.
"We do not want to visit France. I do not want your girls. I do not want to visit France for romantic purposes. I want to develop relations between us.”
The French government is expected cancel $2.42 billion of poor countries’ debt in its 2014 budget, up from $819 million the year before.
Countries in the French debt cancellation programme continue to pay their debt back to France but when the refund is completed, France transfers the corresponding amount back by assigning it to programmes to fight poverty.
Labels: BENOIT HAMON, FRANCE, HIPC
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COMMENT - This is more lying from the MDC. They want to use the debt their ZDERA created, to justify privatisation of the mines. They want to push through HIPC, and
they are using the debt built up through the ZDERA credit freeze to do it.
External debt frustrating Zimbabwe’s growth
This article was written by Our reporter on 6 September, at 05 : 44 AM
EXTERNAL debt is choking Zimbabwe’s economic recovery, a finance ministry official has said. Willard Manungo, the Ministry of Finance’s permanent secretary, says Zimbabwe’s huge external debt is a major hurdle to the economic recovery of the country.
He said
the country cannot access international credit lines because it is severely indebted. The African Development Bank cannot open up credit lines for Zimbabwe because of its debt position.
“African Development Bank is a major, major player but when it comes to Zimbabwe, because we are in arrears, we become automatically ineligible to borrow from African Development Bank,” he said.
The AfDB is also one of the 9 banks mentioned explicitly in ZDERA. Since Jan. 1st 2002, when ZDERA went into effect, the Zimbabwean government has not been allowed to reschedule it's debt at the institution.
SEC. 4. SUPPORT FOR DEMOCRATIC TRANSITION AND ECONOMIC RECOVERY.
(c) MULTILATERAL FINANCING RESTRICTION- ... 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.
Section 3 mentions the banks that are affected, and specifically mentions the African Development Bank:
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.
(2) MULTILATERAL DEVELOPMENT BANKS- The term `multilateral development banks' means the
International Bank for Reconstruction and Development, the
International Development Association, the
International Finance Corporation, the
Inter-American Development Bank, the
Asian Development Bank, the
Inter-American Investment Corporation, the
African Development Bank, the
African Development Fund, the
European Bank for Reconstruction and Development, and the
Multilateral Investment Guaranty Agency.
The MDC is now using the debt built up with this legislation they helped create a decade ago, to push through the privatisation of the Zimbabwean people's mines. - MrK
“The same situation with World Bank and other major cooperating partners. So the issue of arrears is limiting the capacity of some of the cooperating partners to cooperating with us.”
Zimbabwe’s external debt is now more than $10 billion and for more than a decade now the country has been in default resulting in major international lenders shunning it.
The African Development Bank is owed more than $500 million.
Earlier this week finance minister Tendai Biti (pictured) said he was in talks with the International Monetary Fund and the World Bank to retire Zimbabwe’s debt.
Manungo said the suspension of development aid to Zimbabwe was affecting the country’s recovery.
“If you look at [the] number of development areas that we would want to go into in Zimbabwe – energy, infrastructure, water – I think those are all areas where if development assistance was as it was in the past, Zimbabwe would be seeing major support.
“So the scaling of global development financial flows is also having a major impact on Zimbabwe,” he said.
Most Western nations such as the U.S., Germany and Britain suspended development assistance to Zimbabwe in 2002.
Labels: DEBT, HIPC, NEOLIBERALISM, PRIVATISATION, WILLARD MANUNGO
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COMMENT - Just one more neoliberal who wants to get paid for handing the people's raw materials (DIAMONDS AND PLATINUM) over for the cancellation of the IMF's debt.
Mutambara: Natural resources important in debt reduction
Posted by By Brett Mashingaidze at 9 April, at 01 : 17 AM
ZIMBABWE can leverage its natural resources to settle its debt and harness development if it carefully enters into deals with foreign firms, Deputy Prime Minister Mutambara has said.
Addressing a seminar on “Debt, diamonds and development in Zimbabwe,” in Harare last week, DPM Mutambara said one “good” deal could offset the country’s sovereign debt of US$9,1 billion. However, Zimbabwe is losing billions of dollars in “bad” mining deals and Government will soon revisit these transactions.
Mutambara said big foreign mining companies were not declaring the value of the unmined assets, whose value could help in debt reduction.
This, he said, was prejudicing the country.
He said iron ore miner Essar of India had not declared the US$20 billion asset as it entered into a deal with Government, while Zimplats also made no mention of US$4 billion worth of unmined platinum.
The deputy premier also gave an example of diamond concern, the Diamond Mining Company, which did not declare the value of the US$500 million and went on to recoup its US$43 million investments in two transactions.
“This is a case against mining laws obtaining in most African countries, we as deal makers and our systems of investment,” he said.
Zimbabwe, Mutambara said, must now take steps to know the value of its assets and enter deals with open eyes.
“Zimbabwe’s mineralisation or geology must be quantified for all minerals,” he said. “Valuation of these assets must be done and capacity must be built in an internal team to advise on deals with investors.
“Alternatively, independent consultants must be hired to advise on deals and they must be paid in cash.
“What is the point of not paying a million dollars for a deal worth billions?”
Mutambara called for amendments to the Mines and Mining Development Act, which should entail the right to mining as linked to payment for the value of the unmined asset, the decriminalisation of informal miners and the enactment of a new Diamond Act.
He emphasised the need to know the value of claims saying the country gets capital for development and investors have a sense of reasonable quantum to inject.
“We must review all existing mining contracts, align them with this new thinking and indigenisation and change or create necessary laws, Statutes and instruments,” he said.
Meanwhile, Prof Mutambara said Zimplats should pay Zimbabwe US$3.5 billion for the platinum resource the mining giant got “for free” and whose US$4 billion value it did not declare.
Labels: ARTHUR MUTAMBARA, DEBT, HIPC, NEOCOLONIALISM
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COMMENT - It is already clear that Biti and the MDC want to hand over Zimbabwe's diamond reserves to 'clear their debt' with the IMF. This is standard HIPC procedure.
Zimbabwe launches debt clearance strategy
22/03/2012 00:00:00
by NewZiana
THE government has formulated a policy framework to guide the country in clearing its debts and arrears, says Finance Minister Tendai Biti.
Launching the Zimbabwe Accelerated Arrears Clearance, Debt and Development Strategy (ZAADDS) on Wednesday, Biti said the country should resolve the challenge of debts and arrears to be able to move forward with its economic development agenda.
Strategies spelt out in the policy document include engaging the international community and creditors to remove sanctions as well as establishing a Debt Management Office in the Ministry of Finance.
Zimbabwe's debt and arrears, which stand at 118 per cent of its gross domestic product (GDP), have been cited as a major developmental challenge.
Biti said: "Resolution of the debt issue will unlock fresh financing for critical infrastructure reconstruction projects and economic recovery programmes that will significantly improve the quality of life of the ordinary Zimbabweans.
"In the absence of resolution of Zimbabwe's external debt question, it will remain difficult for us to realize the MDGs (Millennium Development Goals) and for the ordinary Zimbabwean to participate fully in the country's economic transformation."
Biti said it was important for development partners and international financial institutions to note and appreciate the progress which the country's inclusive government had made to resuscitate the economy.
"Judge us by the track record of what we have done. Our figures have spoken for us. GDP growth rates have been above 7.0 per cent after 2009 with industrial capacity utilization rising from between five to ten per cent to 40 to 60 per cent," he added.
The Zimbabwean economy has been on a recovery path since 2009 when the country adopted multiple foreign currencies and the inclusive government was formed.
Labels: DEBT, HIPC, IMF, TENDAI BITI
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COMMENT - Being a neoliberal, I Biti's answer is to give away the diamond mines, in exchange for the IMF's artificial debt being cancelled. That is how HIPC works - before $7 billion is scrapped, you give away $70 billion or much more in natural resources, land and utilities companies.
US$14bln needed to revive economy: Biti
21/03/2012 00:00:00
by Reuters
ZIMBABWE needs at least $14 billion to revive the economy following a decade-long downturn, Finance Minister Tendai Biti said on Wednesday. "We require $14 billion to get our economy back to 1990 levels," Biti told a seminar organised by the government and Euromoney conferences to try to lure foreign investment to the country. "We have a foreign debt of $9.1 billion. We have defaulted as far back as 1999."
[1990 being the year before the World Bank's ESAP and it's austerity started to destroy the achievements that ZANU-PF's social spending policies created. In effect, he is saying that they should turn away from exactly the types of programs the MMD wants to implement - pro-FDI, anti-local business, anti-spending on education and healthcare, anti-supporting the Zimbabwean farmers. - MrK]
Zimbabwe's economy is showing signs of recovery since the formation of a power-sharing government three years ago by long-time political rivals President Robert Mugabe and Prime Minister Morgan Tsvangirai.
Tsvangirai has attacked the government's implementation of the controversial indigenisation policy, forcing foreign firms to surrender 51 percent of their shares to local people, saying it would discourage investors.
Platinum miner Zimplats, a Zimbabwe division of Impala Paltinum, the world's second-biggest platinum producer submitted its compliance plan last week.
Biti said he was angered by the manner in which authorities were implementing the law.
"The challenge is the way we are doing it and it makes me very angry," Biti said adding that "a law must be consistent and non arbitrary."
The government has vowed to nationalise companies which fail to comply with the equity law and which Mugabe said was meant to benefit blacks disadvantaged by colonial laws.
Biti warned last week that a short fall on new diamond sales from the controversial Marange fields, the country's major source of revenue could force the government to shut down.
Zimbabwe anticipated $77.5 million from diamond sales during the first two months of the year, but received only $19.5 million, Biti said, attributing the shortfall to the fact that there had not been any diamond auction since the beginning of the year.
Labels: HIPC, MDC, NEOLIBERALISM, TENDAI BITI
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COMMENT - HIPC is nothing but a debt for assets swap. Zambia was
$7 billion in debt to the IMF, so the World Bank came along and demanded privatisation of the Zambian mining industry, worth at least
hundreds of billions of dollars in copper, cobalt and gemstone deposits. HIPC is and was daylight robbery.
HIPC route not right course for Zimbabwe
29/02/2012 00:00:00
by Mafunga Dube
FINANCE Minister Tendai Biti recently made a recommendation to have Zimbabwe declared a Heavily Indebted Poor Country (HIPC). The major argument for this step is to have Zimbabwe qualify for the cancellation of a large bulk of the external debt which is an “albatross to the country’s economic progress,” we are told.
Ordinary Zimbabwean would be eager to know what really is a “heavily indebted poor country”? Who grants such status? Are the country’s debts the real major issue hampering economic recovery at the moment? What could be the major issues of concern negating economic recovery?
It is beyond doubt that the country is heavily indebted, with external debts hovering above US$10 billion as of 2011. However, having a debt is no proof of one’s poverty. Zimbabwe boasts of rich reserves of natural resources notably gold, platinum, chrome and diamonds. The correct question we should be asking as citizens is: “Are these resources appropriately exploited and proceeds optimally utilised for the benefit of the nation?”
A country that qualifies for HIPC status is one whose debts are more than one and a half times its exports. The country should also be on a World Bank or IMF programme for at least three years to qualify.
So far, 32 countries have gone through the process and in all cases, it has taken at least 10 years. This sounds like another ESAP: cutting down on government expenditure, public sector worker retrenchments and cuts on subsidies. It also entails unconditional “free market” policies, the type that allow for consumer exploitation without intervention from authorities.
Can Zimbabwe afford another ESAP-like era especially coming from a decade of de-industrialization, economic contraction, rising unemployment, skills flight and demise of its own currency?
The path chosen by Biti is one that will be controlled by foreign actors. But Zimbabwe still can chart its own economic path. Riding on the back of abundant natural resources, surely it is realistic to have a Zimbabwe with strong economic indicators by 2017? The country can leverage its natural resources to embark on massive infrastructural development notably dualisation of major roads; upgrading of communication infrastructure; construction of bridges; upgrading and construction of new power stations; rehabilitation of the railway network and dam construction.
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These massive projects will create employment, business opportunities to downstream industries and ensure availability of good infrastructure for a conducive and competitive business environment.
Another priority area is for the country to get off the election fever by whatever means necessary as this is holding back investment. Authorities need to put their foot down seriously to also rein-in rampant corruption.
Countries like Norway have successfully transformed their economies courtesy of utilising oil discoveries for national benefit since late 1960s. The authorities established what is now known as the Petroleum Fund, which receives inflows from surplus wealth made from exploitation of oil reserves to the benefit of the entire nation. This has seen Norway attaining a status of the best socialist democracy in Western Europe providing free health care, free university education, unemployment benefits and generous pension schemes.
Zimbabwe is now in a position to extract all its minerals and dispose of the same successfully. Surely, we have an antidote to cure our economic crisis. We only need to abandon our wailing culture and blame game for the challenges we encounter and possibly take a leaf from Angola, a former colony of Portugal, which has successfully thrown away its shackles and is now in a position to financially bail out the former colonial power.
Mafunga Dube is a trade consultant and business researcher
Labels: HIPC, NEOCOLONIALISM, NEOLIBERALISM
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COMMENT - Arthur Mutambara, conveniently forgetting ZDERA, Sec. 4 C (2), which forbids the scrapping of the Zimbabwe government's debt for the last 10 years. Zambia had $7 billion in debt, which was wiped away through HIPC, something the Zimbabwean government is prohibited from benefiting from, through ZDERA Sec4C (2). Of course, Zambia's $7bn debt was forgiven after the 'privatisation' of tens if not hundreds of billions of dollars worth of copper, cobalt and uranium deposits.
Mutambara says Zim ‘over-borrowed’
New approach ... Arthur Mutambara and Morgan Tsvangirai at book launch
02/07/2011 00:00:00
by Business Reporter
DEPUTY Prime Minister, Arthur Mutambara, says Zimbabwe is practically broke with the national debt now outstripping the country’s gross domestic product (GDP). "Zimbabwe's GDP is zero," Mutambara told delegates to a recent book launch in Harare. "If you owe some one US$7 billion and your GDP is US$7 billion then you do o not have any money.”
Zimbabwe’s national debt is said to be more than US$7 billion, outstripping the country’s GDP which is estimated at just over US$6 billion. "We are heavily borrowed and we do not have a GDP to talk about," Mutambara said.
Early last month, the International Monetary Fund (IMF) said Zimbabwe was in “debt distress” with a large and unsustainable external debt stock which represented 118 percent of GDP at the end of 2010. The bulk of the debt was also said to be in arrears.
Central Bank Chief, Gideon Gono also said the country’s national debt to GDP ratio was out of sink with international best practice.
“The country’s total external debt stock amounted to US$6 929 million as at 31 December 2010, representing 103 percent of GDP, a level which is above the international debt sustainability benchmark of 60 percent,” Gono said in a monetary policy review presented in January.
“The bulk of the country’s external debt is owed to multilateral creditors, which account for 36 percent of the country’s total debt.”
Gono said bilateral and commercial creditors were owed 33 percent and 31 percent, respectively with central government remaining the largest debtor at 57 percent while parastatals and the private sector owed 35 percent and 8 percent, respectively.
In a statement issued following consultations with local authorities in June, the IMF welcomed the government’s strategy for arrears clearance and re-engagement with the international community.
The government was however urged to refrain from further “non-concessional borrowing and to seek better terms for recently contracted debt”.
Labels: ARTHUR MUTAMBARA, DEBT, HIPC, NEOLIBERALISM
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WikiLeaks cable: US controls IMF
Posted: Monday, December 20, 2010
Herald Reporters
December 20, 2010
THE West's claim that its sanctions are targeted at the Zanu-PF leadership in Zimbabwe have been exposed for the sham they are by a WikiLeaks cable released yesterday that shows that the US government directed the IMF not to restore Zimbabwe's voting rights and lines of credit.
The IMF has over the years masqueraded as a multilateral institution that operates independently of the whims and caprices of its host, the US government.
One of the cables, dated September 2005, from New Zealand, titled "New Zealand: Response to demarche on Zimbabwe Vote in IMF," and directed to the New Zealand Agency for International Development, which handles issues related to the IMF, shows that the US controls the IMF and played a lead role in blocking the IMF from reinstating Zimbabwe's voting and borrowing rights.
"On September 2 (2005), a representative of New Zealand's Treasury noted Zimbabwe's decision to pay back US$120 million of the US $290 million it owes the Fund. The representative asked whether the US government would now consider Zimbabwe to be in compliance with its IMF obligations, or whether the United States still believes Zimbabwe should be expelled from the Fund.
"Post seeks Department guidance on how it should respond to these questions. Post also notes that the Treasury representative is due to deliver a recommendation on the issue to New Zealand's Finance Minister on September 5 (2005) and that a response by COB September 2 (Washington) would be very helpful," reads the cable signed by one Burnett.
Analysts say the cable is disturbing given that Finance Minister Tendai Biti has received many "technical experts" from the IMF and only recently wanted Zimbabwe declared a "Highly Indebted Poor Country" at the behest of the IMF, a development that would have seen the IMF, and consequently the US by proxy, take over and direct not only the country's economic affairs but also the exploitation of its natural resources.
HIPC status would have served the US well in "smuggling" people into Government, disguised as technical experts, observers say.
The US and its other Western allies including Britain have been pursuing regime change in Zimbabwe.
The latest revelations also come at a time when Minister Biti's budget has raised a storm given its attempt to use Government processes to realign power centres to MDC-T ministers part of which was Minister Biti's attempt to transfer executive powers from the President to himself through amending the Exchange Control Act through the Finance Bill that was recently rejected by Senate and sent back to the Lower House for review.
Minister Biti, consequently, came under fire from the three principals to the GPA and inclusive Government; President Mugabe, Prime Minister Morgan Tsvangirai and Deputy Prime Minister Arthur Mutambara; as well as fellow Cabinet ministers over his bid to usurp executive powers.
The WikiLeaks report also said a response from Washington would be very helpful before treasury representatives delivered recommendations to New Zealand's Fina-nce Minister on September 5, 2005.
The report also said on September 2, 2005 representatives of New Zealand's trea-sury asked the US if Zimbabwe should remain expelled from the fund after noting Zimbabwe's decision to pay back US$120 million of the US$290 million it owed.
This came at a time when the Bretton Woods institution had instituted compulsory withdrawal procedures against Zimbabwe, again at the behest of the Anglo-Saxon alliance.
The representatives asked whether the US Government would "now consider Zimbabwe to be in compliance with its IMF obligations, or whether the US still believes Zimbabwe should be expelled from the fund.
The New Zealand Treasury also reportedly sought the US guidance on how it should respond to the questions raised.
Efforts to get comment from Minister Biti were fruitless at the time of going to press.
Labels: GLOBALISATION, HIPC, IMF, NEOCOLONIALISM, WIKILEAKS
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COMMENT - This is just an attempt to get Zimbabwe to sign on to HIPC and mines and parastatal 'privatisation'. HIPC is a debt for asset swap, where Zimbabwe would swap $7 bn of debt for tens of billions in mineral resources.
Zim needs debt relief: IMF
by Reuters
08/07/2010 00:00:00
ZIMBABWE’S heavy debt burden can only be tackled through international debt forgiveness, according to the International Monetary Fund.
An IMF staff paper published on Wednesday, detailing discussions with the Zimbabwean authorities in March, said neither the right economic policies nor the country's mineral wealth could immediately resolve the country's large debt problem.
"Zimbabwe is in debt distress, and the debt overhang cannot be resolved without debt relief even if policies are improved and mineral extraction is increased," the paper said.
IMF staff estimated that Zimbabwe's foreign debt is projected to reach 151 percent of gross domestic product by 2015, with 104 percent of GDP in arrears.
If current economic policies continue and donor financing is largely confined to humanitarian assistance in the medium term, the country's large debt stock would remain unresolved and debt would continue to pile up, the paper said.
But to win debt relief Zimbabwe would need to improve ties with the international community and qualify for a global scheme for heavily indebted poor countries that would lead to debt cancellation after a two-year economic program.
"The government needs to reach consensus on a resolution strategy for external debt arrears and to improve relations with the international community, whose support would be vital for obtaining debt relief and rebuilding the Zimbabwe economy," the IMF paper said.
Despite the formation of a unity government last year, Zimbabwe has struggled to win donor support, while private capital inflows have fallen over concerns about a government plan to force foreign-owned firms to sell majority shares to locals.
The IMF has slowly reengaged with Zimbabwe to try and help fix the economy but refuses to lend money to the country until the government shows it is willing to implement policies that stabilize the economy.
In March the IMF restored Zimbabwe's voting rights, which were suspended in 2003 over policy difference with President Robert Mugabe's previous ZANU-PF government.
Under IMF rules, the Fund cannot lend to a country that owes it money. Zimbabwe is $140 million in arrears to the IMF and the country's total external debt is about $6 billion.
The IMF paper noted that while there has been some progress in Zimbabwe's economy, there are still a significant number of problems.
These include recent large wage increases, a poor financial position of state-owned enterprises, rising risks in the banking system, weak governance at the central bank, growing weaknesses in the business climate, and a precarious external position threaten Zimbabwe's economic recovery.
Staff said Zimbabwe had implemented an "unsustainable" wage-driven fiscal expansion financed with IMF special drawing rights, or SDRs.
The IMF last year approved a special allocation of SDR's, its internal unit of account, worth some $250 billion to all of its member countries as part of a plan to boost global liquidity in the wake of the global financial crisis.
IMF staff said they had advised Zimbabwe not to use the SDR-related funds but the government had converted an equivalent of $150 million of the $410 million that went to Zimbabwe for budget financing.
Labels: HIPC, IMF, TENDAI BITI
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Biti storms out of Cabinet as pressure mounts
By: Ralph Mutema
Posted: Friday, June 18, 2010 8:40 pm
FINANCE Minister Tendai Biti stormed out of a Cabinet meeting this week as his plans to have an International Monetary Fund (IMF) staff-monitoring programme (MTP) for Zimbabwe hit snag.
The IMF is considering introducing an MTP for Zimbabwe, after efforts to declare it a Highly Indebted Poor Country (HIPC) were met with resistance by the government. Mr Biti, who was also in favour of the discredited HIPC programme, is said to be in favour of MTP.
An IMF mission visited Harare during June 2-10, 2010 to "review recent economic developments" under the banner of "technical assistance". Mr Biti also wanted the IMF to assist his ministry in the preparation of the Mid-Year Budget statement.
The team met with Mr Biti, Minister of Economic Development Mr Elton Mangoma, Minister of Youth and Indigenization Saviour Kasukuwere, Minister of Mines and Mining Development Obert Mpofu, Reserve Bank of Zimbabwe (RBZ) Governor Dr Gideon Gono, and other senior government officials, as well as representatives of the business and diplomatic communities.
Sources in the inclusive Government say Mr Biti was the only official who felt that Zimbabwe needed to invite IMF officials to "help" with formulating strategies for Zimbabwe's debt restructuring.
Former Acting Finance Minister and now Minister of Justice Patrick Chinamasa and Foreign Affairs Minister Simbarashe Mumbengegwi vehemently opposed Biti's plan to "mortgage our country's resources to international financial institutions".
Mr Biti is said to have come under extreme pressure to justify his affinity for IMF policies and stormed out of the meeting.
Cabinet members, especially from Zanu-PF, are said to be opposed to the idea of including an IMF team as the IMF-sponsored Economic Structural Adjustment Programme of the 1990s was a total failure.
Zanu-PF ministers say as the economy has grown about 4 percent last year and consumer prices fell about 8 percent, and bank deposits tripled, there is no need to have Zimbabwe declared a HIPC country and there is no need to adopt IMF reform policies. They are happy with IMF providing only "technical assistance", and nothing more.
Mr Biti is reportedly also under pressure from IMF bosses who met with him last month in Washington to come up with a programme that includes the IMF.
Minister Chinamasa argued that an SMP would see Harare surrendering to the Bretton Woods institution some, if not all, of its independence in economic formulation and implementation. Similar programmes have been introduced in countries such as Sudan, Togo, Liberia, Republic of Congo and the Former Yugoslav Republic of Macedonia.
According to Chinamasa, Zimbabwe is not at the stage that these countries were and is endowed with many natural resources that can help the country develop. He said the illegally imposed western sanctions have to be removed so that Zimbabwe can develop.
President Mugabe, who was surprised by Mr Biti's behaviour, was said to have remained calm and continued with chairing the weekly meeting.
Labels: HIPC, IMF, MDC, NEOCOLONIALISM, NEOLIBERALISM, TENDAI BITI
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COMMENT - This government is a criminal enterprise, as previous MMD governments were before it. Zambia is running up debts it's citizens will have to repay, so the foreign mining companies don't need to pay taxes, and the politicians can take their bribes. In fact this 'democratic government' is being remote controlled from London, New York, Toronto and Sydney. That is where the real decisions are made. Anyone with integrity in this government should resign immediately, until the mines are taxed 20% of their revenues. This government with do anything, and go to any length, to avoid having their friends pay taxes, and the people of Zambia be damned. This is neocolonialism.
Guard against another debt trap
By The Post
Sun 07 Mar. 2010, 04:00 CAT
THERE is need for serious reflection on the manner in which our country has continued to contract debt. We say this because our nation risks falling into the debt trap, a suffocating trap that future generations will have to struggle to liquidate. In 2006, our country attained the Highly Indebted Poor Countries (HIPC) completion point.
The HIPC and Multilateral Debt Relief Initiative contributed significantly to the reduction of our country’s debt, which stood at about US $7.1 billion at the time. However, according to this year’s budget, “the government’s stock of foreign debt is expected to grow by US $59.7 million to about US $1,159.6 million by end of 2009.
This is well within sustainable limits, and in line with the government’s debt policy.” We know that our domestic debt stands at about US $400 million. Simply put, our external and domestic debt as a country is now about US $1.6 billion.
The government of Belgium last Thursday cancelled the 5,100,000 Euros about K34 billion loan lent to Zambia towards the rehabilitation of Lusaka International Airport.
This is a very welcome development, especially that our country requires resources to address the numerous challenges our people are facing. But there is need for a serious national debt management strategy that will protect the country from unnecessary debt contraction and misapplication of funds that ultimately erode the gains of debt cancellation.
We are where we are as a nation, as a country, not because we have not had access to finance, to debt, to money to borrow. We have had a lot of access to debt and that is why today we are still having countries cancelling our debt.
The questions we should be asking as we borrow are: why are we borrowing; what are we going to use that money for; do we have capacity to manage effectively and in an orderly manner what we have borrowed and lastly we should ask ourselves how we are going to pay back.
These seem to be simple questions but they are of great importance to the management of our economy and the future of our country.
These are questions not only those who manage the affairs of the country should ask themselves but all of us – as individuals and corporate entities - whenever we think of or contemplate borrowing money for anything. Problems can arise if these questions are not raised and answered properly.
Not so long ago, the government’s plan to get a loan of US $53 million about K246.1 billion from Exim Bank to procure mobile hospitals from China was exposed and Rupiah Banda supported it and described it as a damn good idea.
This plan has been condemned by our people especially that the money which will be used for procurement will be a loan that will have to be repaid later.
However, this plan of mobile hospitals apparently still stands because Rupiah has announced that the Zambian government has submitted a list of projects, which includes mobile hospitals with the hope of seeking financial assistance from China’s aid package for Africa.
Just recently we were told that Rupiah told the World Bank president Robert Zoellick that Zambia is trying to seek higher interest loan facilities from the Brenton Woods institute to finance the repair of roads damaged by mining activities in the country.
Zoellick told journalists from African countries via video conferencing from Addis Ababa, Ethiopia that Rupiah was considering borrowing from the International Bank for Reconstruction and Development (IBRD) window to finance crucial infrastructural projects.
But we know that borrowing from the IBRD, a non-concessional window attracts interest rates of between three to three and half per cent while disbursement of financing for projects by World Bank through the International Development Association (IDA) window is done through grants and soft loans. Zambia currently accesses financing for infrastructural projects from the World Bank through the IDA window.
This decision – among others - by Rupiah to borrow through the IBRD, if it is implemented, in our view is what risks taking the country back into the debt trap, undesirable at it might be.
For instance, if the government borrows money to work on the roads leading to the mines, the revenue they get from the mines with the change in the 2008 mining fiscal regime will not even be sufficient to help pay back that loan.
The country will continue paying back that debt long after some of those mines have closed shop and the roads are damaged again.
We are not in any way saying that the roads leading to the mines should not be worked on. They should, but at a cost that will not land the country into a huge debt. The government has to find a better way of financing such a project and raising revenue from the mining sector itself could be a start.
At the rate we are going, no matter how much we borrow, we will not be able to address the problems and challenges facing our people because a large chunk of money we borrow is stolen, wasted, misapplied or misused in one way or another. A government project that should cost US $1 million in a well managed economy ends up costing US $5, 10, 20 or so million.
What type of return can one get on an investment where more is spent far beyond the proper or reasonable cost of the undertaking? If that type of cash is spent on a road, the road will be worn out before the loan is repaid and this creates a problem because we will be required to work on it again before finishing the previous loan repayment and this is what is happening in most of our projects. What this means, if it is allowed to continue, is that we will not get out of the debt unless we stop.
It is unfortunate that the National Constitutional Conference (NCC) not so long ago referred to a referendum the clause in the Mung’omba draft constitution which seeks to compel the government to disclose to the National Assembly the terms and conditions of the loans they want to contract.
This system could have helped to provide authority to Parliament to discuss loans, terms and conditionalities attached to all debts the government can contract. It would have enabled parliamentarians, who are the representatives of the people, to determine the country’s limits for both external and domestic loans.
Our country seriously needs a flexible tool that can help in the monitoring of debt resources from the point of allocation, disbursement, utlisation and the evaluation of the implementation process.
It is sad that our country has not made good progress as far as reforming policies and laws that led us into the previous debt trap. Yes, our country’s debt problems were caused by numerous factors such as the balance of payment problems but we need to work on the weak institutional frameworks.
And these are the policies that need serious attention to protect the country and the future generations. We will continue to get write-offs as a country but they will not be a solution if we do not make serious attempts to manage the way we borrow and how we use the money we borrow.
Involving Parliament in loan contraction will not in any way reduce the powers of the Executive. We strongly believe that there is no way the Legislature can prevent the government from borrowing money if the intentions are good or if the money is aimed at investing in projects that will uplift the standards of our people who continue to wallow in poverty.
The Legislature can only prevent the Executive from borrowing money if it is for projects like mobile hospitals and other unnecessary things. And that is why we need this important clause in our Constitution to prevent abuse and enhance accountability.
There are countries in Africa such as Uganda, which have provisions for parliamentary ratification of loans in the interest of transparency and accountability and to ensure that they borrow for the right reasons.
There are also countries like Namibia, which have placed a ceiling on debt contraction and cannot go beyond a certain percentage of their country's Gross Domestic Product in their borrowing. All these measures are there to ensure good governance and development for the benefit of the people.
The fact that developing countries such as ours lack proper bargaining power on the loans leaves us at the mercy of international financial institutions and bilateral donors. And this is where the reality of the flaws in the distribution of power internationally comes to the fore.
This is the reason why Parliament should be able to look at the conditions of all loans before the government actually commits the country. Contractual processes should be as transparent as possible and Parliament should be involved to ensure that whatever money our country is borrowing is in line with the development priorities.
Challenges of misapplication of funds are still there as evidenced by the Auditor General’s annual reports and our poor people will continue to suffer as long as these reports are treated as an academic exercise.
Poverty, disease and underdevelopment will continue to be with us as long as fighting corruption and prudent usage of resources continues to be confined to political rhetoric.
Our bilateral and multilateral partners will continue to cancel our debts but our people will still lack the basic of needs if there is no proper leadership; if priorities are not set right; if the thieving goes unabated; if the wastage of resources on expensive tourism expeditions all over the globe are perpetuated.
We need to guard against the resurgence of the debt trap because it will create a nightmare for the future generations.
Labels: DEBT, HIPC, WINDFALL TAX
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Some donors willing to cancel debt: Biti
AFP/TZG
Thu, 25 Feb 2010 15:36:00 +0000
SOME donors would be willing to cancel Zimbabwe's 5.4 billion dollar foreign debt, if the inclusive Government presents a united proposal to settle it, finance minister Tendai Biti said Thursday.
"I am in constant touch with the donors and I have no doubt that they will put up money," Biti told journalists in Harare after meeting officials from the African Development Bank.
"They will help us, once there is a green light from government" on how Zimbabwe wants to settle its debt, Biti added.
Zimbabwe's 5.4 billion dollar (four billion euro) foreign debt is roughly the size of its gross domestic product last year, and is hampering efforts to rebound from a decade-long sanctions-induced economic crisis that saw inflation soar to multiples of billions in 2008.
The inclusive Government of President Robert Mugabe and Prime Minister Morgan Tsvangirai has over the past year been divided on how to tackle the debt.
Some in government have proposed mortgaging the country's vast mineral deposits, while others want the country to be declared an Highly Indebted Poor Country (HIPC), criticised as a carbon copy of the disastrous Economic Structural Adjustment Programme of the late eighties.
Zimbabwe posted economic growth of 4.9 percent last year, the first growth in over a decade.
Hassan Khedr, dean of the African Development Bank, said Zimbabwe's government remained divided on what route to take.
"We understand that there is still divided opinion related to whether to be classified as HIPC country in order to be eligible for this kind of support for debt cancellation," he said.
"There are still a lot of impediments, strains that still need to be looked at. That is do-able only if the country is willing to have an arrears clearance programme."
Zimbabwe owes a combined 1.3 billion dollars to the IMF, the World Bank and the African Development Bank.
Last week, the IMF restored Zimbabwe's voting rights, stripped seven years ago, although the southern African country will not be able to access much needed financial aid until it settles its arrears.
Labels: HIPC, TENDAI BITI
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Biti's HIPC plan slammed
TZG/IPS
Fri, 12 Feb 2010 00:55:00 +0000
FINANCE Minister Tendai Biti plan to apply for Highly Indebted Poor Country status for Zimbabwe has been slammed by critics who say the minister is ill-advised and has no proper understanding of the crisis in the country and what is required to tackle the problems.
Zimbabwe owes 5.7 billion dollars to the International Monetary Fund (IMF), the World Bank, the African Development Bank, and other international financial institutions. Biti says that joining the HIPC programme is one way out.
HIPC was initiated in 1996 at least partly as a response to criticism of IMF and World Bank economic policy by civil society. The programme provides debt relief and low-interest loans to cancel or reduce external debt repayments.
To be considered for the initiative, countries must have an unsustainable debt burden. Assistance is on condition that the national governments of these countries meet a range of economic management and performance targets.
"You should know that Zimbabwe is not a poor country. It has vast natural resources, but these resources cannot be turned into capital," says minister of state in the prime minister's office Gordon Moyo.
"Zimbabwe should come up with a poverty reduction strategy paper, which is a blue print of how it is going to use the resources which are going to be availed to it once the debt is cancelled," continues Moyo.
"It is the responsibility of Zimbabwe, it's not the imposition of the World Bank, IMF or the Paris Club or any other institutions."
But Dr Qhubani Moyo, a public policy analyst, says Zimbabwe's economic problems do not originate with its debt, but with the economic sanctions intended to weaken President Mugabe's Zanu PF party.
"Unless we address the issue of sanctions we are not going anywhere. We need to ensure that we link the issue of sanctions with HIPC.
"Let's ensure there is economic growth in this country by engaging in trade - that trade can be done if the sanctions barriers are removed."
Responding to the minister's assertion - citing debt relief and economic growth in Uganda, Mozambique, Zambia and Nigeria - that HIPC has worked well for other African countries, Moyo says the comparisons are mistaken.
"If you think that there is one formula for solving problems that hit all African counties, then you will have a serious problem in the long run.
"Countries like Mozambique were coming from a bloody civil war. Zimbabwe is a country whose economy collapsed but there was nothing in terms of destruction of infrastructure and superstructure.
"Also: if you look at Mozambique and these other countries that have become HIPC countries, the so-called growth is nominal. It's not being felt at the level of individuals."
Zimbabwe Coalition on Debt and Development representative Janet Mudzwiti also criticises the HIPC plan, albeit from a different angle.
"We are against lender-led relief initiatives, simply because their ideology is not pro-people; they are not people-based policies.
"To us the HIPC principles still hinge on the neo-liberal policies that you have to open up your markets, introduce user fees for social essentials such as health and water.
"We are saying it's not different from the Structural Adjustment Programme which was disastrous."
Regarding the country's debt, she raises two important issues.
"There is the issue of odious debt and the issue of illegal debt," Mudzwiti says.
"When you look at the issue of Zimbabwe's debt profile, there is the issue of colonial debt (incurred by a white-only government between 1965 and 1980). And we have the issue of debt (incurred) under the economic structural adjustment programme."
Odious debt is debt entered into by a government on behalf of the people, but which doesn't benefit them.
Much of the $500 million dollars of debt run up by the Rhodesian state was spent on fighting a war against the black majority; there is a strong case for that debt to be deemed odious.
Much later, Structural Adjustment Programmes were imposed by the World Bank and IMF across Africa in the 1980s and 1990s as a condition for loans to cover a previous debt crisis.
The conditions it imposed sharply restricted government spending on things like healthcare and education, called for privatisation of valuable state assets and of services like water and electricity, required the devaluation of local currencies, and stopped governments from protecting local production by means of import tariffs.
Zimbabwe's adoption of structural adjustment proved disastrous for the economy and activists are concerned that the conditions for HIPC may replicate this experience.
Moyo does not want the country to turn to the Bretton-Woods institutions for answers.
"Zimbabwe has a way of dealing with its problems. We can't have a one fix solution for all. Zimbabwe has to come up with its own model to use its own resources for its own recovery and its own growth."
Labels: HIPC, TENDAI BITI
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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
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Biti learns from Chinamasa and Gono
Comment
Fri, 04 Dec 2009 01:32:00 +0000
FINANCE Minister Tendai Biti's Budget Statement was welcomed by the business community in Zimbabwe. In the statement, the minister was broadly optimistic about Zimbabwe’s prospects predicting that that the country's Gross Domestic Product will grow by 7 per cent after ten years of contraction.
Broadly, Minister Biti predicts a healthy economic future for the country. Mr. Biti said growth would come from key sectors such as agriculture and mining; sectors he said badly needed humanitarian injection just a few months ago when he suggested that the country declare itself a Highly Indebted Poor Country (HIPC).
Minister Biti's U-turn is interesting and one wonders why he was thinking of going the HIPC way.
His report that Government revenues were improving from about U$4 million in March to U$90 million in June is testimony that his originally idea on HIPC status was flawed.
The minister said his Budget was the most comprehensive, as over 5,000 people and businesses used the Ministry of Finance website to make their submissions.
It would be interesting to know how many of those 5,000 entities suggested the HIPC way?
Does the MDC-T have a blueprint for Zimbabwe's economy and can we trust that blueprint?
Surely it makes less sense now to think that Zimbabwe could have been considered under the HIPC initiative when it can register such significant growth, even under the current sanctions regime.
Reserve Bank Governor Dr Gideon Gono suggested that these productive sectors, agriculture and mining, need cash injection. His economic logic is now clear.
Minister Biti's Reconstruction, Stabilisation, Recovery and Transformation (RESTART) policy, proposed to make the Reserve Bank "autonomous in the maintenance of price and exchange rate stability, and the effective monitoring and supervision of the financial sector". Yet, as Finance Minister he is proposing to curtail that autonomy.
He also proposed that Zimbabwe "needed budgetary and balance-of-payments support ... during the stabilization period" - and that income tax will be reduced for those in the low income bracket.
His party, the MDC-T, is not working to get that "needed budgetary and balance-of-payments support" through the removal of illegal sanctions againts the country.
Minister Biti's Budget infact is good for businesses, but still fails to deliver for the poor. While businesses will welcome the reduction in corporate tax from 30 percent to 25 percent, the reduction in personal tax failed to meet expectations.
The Minister could have further reduced personal tax in order to increase disposable income and thus spur local demand.
Minister Biti's Budget is not exactly different from the one presented by then Acting Minister of Finance Patrick Chinamasa just over a year ago. One then wonders what exactly the MDC-T is proposing for the people of Zimbabwe.
Labels: GIDEON GONO, HIPC, PATRICK CHINAMASA
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Biti's HIPC plan triggers concern
Newsnet
Fri, 02 Oct 2009 17:32:00 +0000
THE move by the Minister of Finance Mr. Tendai Biti to declare Zimbabwe a - Heavily Indebted Poor Country, has triggered concern from Advisers on Zimbabwe Debt Management Strategy who say the philosophy has far reaching implications to the economy given that the country is still under sanctions imposed by the same western allies.
Sources close to treasury revealed that the Minister of Finance is working on a Heavily Indebted Poor Country (HIPC) project and is
deliberately letting the economy bleed by
blocking the US$510 million fund given to Zimbabwe by the IMF.
Such a move will lead to the shrinking of the economy to a stage where he can lobby for a decision to declare the country a Heavily Indebted Poor Country.
In principle, the Heavily Indebted Poor Countries’ initiative is an intervention jointly structured by the IMF and the World Bank as a way of providing debt relief to countries deemed to be heavily indebted and poor.
And in essence, the underlying philosophy of HIPC is that a country must first publicly announce its vulnerability and degree of high poverty levels and heavy indebtedness before it can get sympathy from the league of lenders.
In the case of Zimbabwe, technocrats feel that there is need for extreme caution to be taken, given that the country is under sanctions imposed by the same people that have a say on whether or not Zimbabwe would get help after self declaration of HIPC status.
It is also important to note that when a country declares itself to be in the HIPC cluster, any delays in the actual assistance as is likely to be the case with Zimbabwe would trigger a sustained worsening of investor-creditors sentiments on Zimbabwe to the detriment of the economy.
If left unchecked Mr. Biti’s HIPC project has the capacity to damage and leave the economy with deep scars that might never heal.
Mr. Biti has over the past weeks been under the spotlight from different sectors which condemned him for holding the country at ransom by blocking the US$510 million unveiled by IMF to member states.
Observers are of the opinion that Mr. Biti is being used by the Western forces to declare Zimbabwe an HIPC state to achieve their regime change agenda as President Robert Mugabe will be held responsible for running down the country by virtue of him being the Head of State and Government.
Labels: HIPC, MDC, NEOCOLONIALISM, NEOLIBERALISM, SANCTIONS, TENDAI BITI, ZDERA
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Biti is asking for sympathy from the devil
Prof Jonathan Moyo, MP - Opinion
Sun, 20 Sep 2009 11:33:00 +0000
IS the MDC-T in the Coalition Government under the cover of a false paradigm for political, media and constitutional reforms to ameliorate the continuing suffering of Zimbabweans or is it actually pursuing a double-strategy to worsen and prolong that suffering by purporting to support the GPA while at the same subverting it as part of its new internal regime change plot of illegally grabbing political power from within the belly of the Government?
There are three alarming developments in our body politic that warrant this important and urgent question.
The first and most alarming development is that the Minister of Finance Tendai Biti has since the formation of the Coalition Government some seven months ago been surreptitiously working with Western donors that have imposed illegal economic sanctions against Zimbabwe to use the African Development Bank (AfDB) to fund a sell-out process through which the Coalition Government would be tricked into permanently humiliating Zimbabwe by having it declare itself to be a "Heavily Indebted Poor Country" (HIPC) in order to enable the US and Britain to takeover the running of the country using the IMF as their control-instrument of choice.
Minister Biti has authored an outrageous document to this effect dated August 30, 2009 which some American and British diplomats have been widely circulating in Harare over the past two weeks to promote what they cynically say is a HIPC Initiative for Zimbabwe designed to get the country to plead for debt-forgiveness from the donor community by declaring itself to be a collapsed economy that is sick, poor, hopeless and incapable of paying its debts whose arrears are now about US$3,1 billion.
Minister Biti's document has 32 pages with 81 paragraphs that are poorly argued and contradict each other. The circulation of that underhanded document increased this weekend with the arrival last Friday of a curious team of so-called Debt Consultants funded by Western donors through the AfDB.
The second alarming development related to the first is that the very same donors that have imposed sanctions and are surreptitiously working with Minister Biti to impel Zimbabwe into declaring itself a HIPC patient are also clandestinely conniving with Ministers Biti, Elton Mangoma (Economic Planning and Investment Promotion) and Prime Minister Morgan Tsvangirai through the World Bank and two American sponsored NGOs based in Cape Town in South Africa-one of them coordinated by Isaac Maphosa who has a close working relationship with Minister Biti-to setup an illegal parallel government whose sinister regime change activities include creating conditions that would push Zimbabwe into declaring itself an incurable HIPC patient that cannot survive without Western mercy and charity.
The third alarming development which is an integral part of the first two is that in addition to setting up an illegal parallel government to fast-track the creation of ominous conditions for a collapsed economy to pave the way for Zimbabwe to declare itself a hopeless HIPC patient begging for debt-forgiveness, the very same countries that have imposed illegal economic sanctions against the country and which are using Minister Biti to push Zimbabwe into an HIPC trap have also setup and funded a host of NGOs numbering over 2,300 which are threatening to form a colony whose aim is to turn development-starved and vulnerable ordinary Zimbabweans in urban and rural areas into hopeless dependents of donor handouts and emergency kits.
An examination of each of these three alarming developments is in order starting with the strategy of turning Zimbabweans into donor subjects that are dependent for their livelihoods on donor trinkets. Over the last decade since its formation and particularly over the last seven months since becoming one of the three ruling parties in the Coalition Government, the MDC-T has demonstrated beyond doubt that it is ever willing and ready to conspire with Western donors who seek regime change in Zimbabwe to shun capital development projects in favour of consumable donor trinkets in the name of humanitarian assistance.
Indeed, it is as striking as it is disappointing that, over the last 10 years including the last seven months, the MDC-T and its Western backers have not supported any capital or infrastructural development in Zimbabwe such as the construction of roads, dams, schools, hospitals or clinics to give but a few examples. Instead, the MDC-T and its donors have sought “humanitarian-plus” consumable aid where the “plus” has been entirely about funding regime change initiatives such as supporting the Prime Minister’s partisan and inflammatory Newsletter or setting up of a parallel government in Prime Minister Morgan Tsvangirai’s Office in which bureaucratic incumbents exclusively drawn from the MDC-T are paid non taxable double salaries between US$700 and US$7 000.
On this score, there is now a very sharp and clear difference between the MDC-T and Zanu PF. Whereas Zanu PF has continued to push for “Empowerment First” as a nationalistic expression of the politics of development even under crippling economic sanctions, the MDC-T has been content to run around with the rhetoric of political, constitutional and media reforms to cover up its donor-driven pursuit of the politics of handouts designed to ensure that Zimbabweans live from hand to mouth so as to browbeat them into supporting illegal regime change. This is why the vast majority of the over 2,300 NGOs, whose handouts are cynically linked to the next general election, have nothing to do with development.
Soon after being sworn-in last February, Prime Minister Tsvangirai toured Harare Hospital and was shown a non-functioning boiler which needed to be replaced at a cost of US$40,000 an amount which the Prime Minister described as paltry yet none of the over 2,300 NGOs and their donors immediately came forward to assist despite having coffers into which millions of Obama dollars have been poured.
Then there is the second alarming development related to the parallel government that is being setup in the Office of the Prime Minister. Over the last two weeks, nervous officials at the World Bank including its donors, MDC-T elements in the NGO community and the media along with beleaguered mandarins in the Prime Minister’s Office have been running around with their pants down trying in vain to institute a cover up following stunning revelations that the MDC-T is using the GPA to setup a parallel government with World Bank funding.
Claims by World Bank officials in Harare that the Bank has only supported technical experts and that the support is available to all political parties are as absurd as they are insulting. The individuals affected are not technical experts by any stretch of the imagination but well known MDC-T activists.
The claim that even Zanu PF can access the funding is insulting because even fools know that Zanu PF is under illegal sanctions and that the creation of the so-called World Bank Multi-Donor Trust Fund is precisely to deny funding to anyone and anything associated with Zanu-PF. Encouraged by what it sees as the success of the funding of the parallel government, the Australian government declared last week that it will start interacting with ministers in the Coalition Government on “a selective case by case basis” in announcement which did not require the interpretation of a rocket scientist to understand that Australia will only deal with ministers in the illegal parallel government.
In the meantime, while they might succeed to confuse things down the line, which is unlikely given their breathtaking incompetence, the MDC-T's architects of the parallel government in the Prime Minister’s Office most certainly cannot cover up the trail of their tracks over the last seven months because that has been photographed beyond rational disputation. The evidence of the parallel government is overwhelming, incontrovertible and cannot be erased. More is on the way.
This is partly because the Prime Minister's Office is too bloated, with a hierarchy that is full of loquacious cronies and incompetent relatives all together numbering some 16 officers who are either principal directors or directors assisted by a host of part-time sidekicks most of whom receive scandalous top up salaries ranging from US$700 to US$7,000.
The civil service hierarchy behind the parallel government in the Prime Minister’s Office includes the following principal directors who are playing double roles: Lazarus Muriritirwa (Policy Implementation); Andrew Chadwick (Communications); Denis Murira (Public Affairs); Valentine Cinemane (Special Projects-whatever that means); Martin Rupiya (Security) and Norman Sachikonye who left a high paying job at First Mutual to join Ian Makone as principal director for Finance and Administration at a time when civil servants were earning a mere US$100.00 a month in food vouchers!
Below these principal directors are directors who are in charge of ministerial clusters and who therefore shadow the entire GPA Government and these include Moses Chundu (Economic Affairs); Rose Zigomo (Rights and Interests); Abisha Nyanguwo (Social Affairs); Ghandi Mudzingwa (Infrastructure) and Emmanuel Chimwanda (Security). Also in the hierarchy are James Maridadi (Spokesperson of the Prime Minister); Sabelo Gatsheni Ndlovu (Personal Assistant to Minister of State Godern Moyo in the Prime Minister's Office); Dumiso Matshazi who is a director manning the Bulawayo offices of the Prime Minister and Jacob Mafume who was recently moved from the United States Embassy to coordinate and link the Prime Minister’s Office, Usaid and the parallel government with the activities of over 2 300 NGOs in close liaison with Xolani Zitha, who used to work with Mafume at Zimbabwe Crisis Coalition (created and funded by Usaid) and who has now been deployed as a Personal Assistant in the Office of Lovemore Moyo in Parliament. Zitha and Mafume are specifically supposed to represent the interests of Usaid and other donors in the now controversial constitution-making process at risk of derailment.
The funding of the top up salaries and the activities of the parallel government is coming from donors such as USAID through the World Bank and also through two NGOs based in Cape Town that are funded by the same donors and one of which is coordinated by Isaac Maphosa who is working closely with Finance Minister Biti. Also of note is that these bureaucrats are operating from shadow offices scattered around Harare and Bulawayo including one in Avondale and another along Kwame Nkrumah Avenue near Ambassador Hotel in Harare.
Although the foregoing specifically deals with double-dealing civil servants in the Prime Minister's Office, available information indicates that some Cabinet Ministers received wardrobe allowances in February upon their ministerial appointments while others who have been working with the above named civil servants are also receiving very high top up salaries well above the US$7,000 a month that some of the directors are getting.
Because the funding of the parallel government is neither transparent nor accountable, and because the top up salaries being paid are ridiculously high compared to what other really hardworking civil servants are getting, and further because there is no code of conduct binding its bureaucrats, the parallel government is already embroiled in all sorts of corruption and scandals involving shocking debauchery whose disclosure will expose the moral decadence of the MDC-T and its self-righteous donors and outrage the nation beyond belief.
Finally and within the same vein as the first two alarming developments just narrated, there is the recent shocking development in which Minister Biti has written a widely circulating document he calls a "Debt and Arrears Clearance Strategy" proposing that Zimbabwe should seek the sympathy of Western donors that have imposed illegal economic sanctions to get their debt forgiveness by declaring itself to be a “Heavily Indebted Poor Country” (HIPC).
To become a HIPC, a country must voluntarily and publicly pronounce itself to be heavily indebted and poor; the IMF and World Bank must then test this self-pronouncement and if they like it, they then design a HIPC programme for the country to be run by the IMF which will assume sovereignty over that country's economic and political decisions including control of funding of key institutions such as the army ; after this, the HIPC country gets partial debt forgiveness and criteria to be met for total debt relief upon rigorous implementation of an IMF managed programme; if the country meets al the preconditions after receiving partial debt-forgiveness, then it reaches what the IMF calls “a decision point” at which the Fund and the World Bank with the agreement of the contributing bilateral donors can forgive the debt of that country.
The process is protracted with no guarantees and thus can fail at any stage before the “decision point” and the consequences of that failure can be disastrous.
What is worse about HIPC is that, even though its logic is to achieve debt and arrears clearance, its successful adoption does not bring additional funding because HIPC countries continue to borrow and contract new debt to meet development needs after receiving total debt relief.
As such, the import of this so-called debt and arrears clearance strategy sought by Minister Biti is to get Zimbabwe to humiliate itself by announcing that, since 2000 when it embarked on the historic land reform programme following which the governments of the United States and Britain along with their European, Canadian, New Zealand and Australian allies imposed illegal economic sanctions, it has become so irretrievably poor, so hopelessly inept and so heavily indebted to the same Western donors which have imposed illegal sanctions that it cannot recover and develop without their mercy and forgiveness.
In essence, Minister Biti’s strategy for Zimbabwe's debt and arrears clearance is equivalent to seeking sympathy from the devil. It never works, ask any Christian. Given that the countries that have illegally imposed economic sanctions on Zimbabwe are the same that would have to approve any HIPC status for the country, it is foolhardy for anyone, including the visiting AfDB Debt Consultants, to even contemplate the approach unless they have a sinister agenda to use the HIPC route to further collapse the Zimbabwean economy as a final chapter of the sanctions saga.
It is notable that of the over 40 countries that have gotten debt and arrears relief under HIPC, none of them was under illegal Western economic sanctions prior to attaining a HIPC status.
First things must come first and that means the illegal sanctions must first go before any consideration of going the HIPC way. In any event, Minister Biti and his other Cabinet colleagues who are well known architects and drafters of the illegal economic sanctions, especially ZIDERA, must be honourable and audacious enough to undo their terrible damage to their homeland by openly and continuously calling for the removal of the sanctions.
Without the illegal sanctions, the Zimbabwean economy would recover within a relatively short time. This is because while the country is indeed considerably indebted given its size, it is certainly not poor in natural and human resources and that’s where the solution must be found not in further economic sabotage through Minister Biti’s HIPC treachery authored in Washington and London.
Labels: COLOUR REVOLUTIONS, HIPC, MDC, TENDAI BITI
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A dose of reality on sanctions for MDC
Dambudzo Mapuranga - Opinion
Mon, 14 Sep 2009 15:17:00 +0000
THEY say, "Politics is an overwhelming game and it has a tendency of turning grown men and women into tall tale telling children". The maturity of some of our political leaders needs to be questioned because their behaviour is disgraceful. They say, "Empty vessels make the most noise," and while in politics empty vessels have their uses, putting them in charge of anything other than food and beverage is most certainly a big mistake.
Rewarding chief supporters by giving them posts in government is a common practice, what is an exception is giving these political friends high profile portfolios where they find themselves at every turn displaying their empty vessel characteristics and constantly shoving their feet in their mouths.
Political friends and colleagues are given the safe embassy, a strong deputy, or even a ministry where all you do is read the newspaper.
Minister of State in the Prime Minister’s Office Gorden Moyo certainly takes the cake when it comes to being an empty vessel.
Unlike his principal Prime Minister Tsvangirai, Moyo has no constituency to talk of and like Deputy Prime Minister Mutambara is riding on the coattails of others.
Plucked from the Bulawayo Agenda, a group that was formed solely for regime change purposes and funded by the West, he has the nerve to try and lecture Zimbabweans on what is good and bad for them.
Minister Moyo, instead of advocating unity among Zimbabweans is instead continually sowing seeds of discord that have always been his mantle as a regime change devotee.
His hatred for Zanu PF blinds his vision and parroting the Prime Minister’s half-educated stances on national issues exposes his lack of depth.
As a political appointee, he should stick to what he knows best, smiling for the cameras and chanting slogans and leave the tackling of real issues to the big boys.
When Minister Moyo refuses to say the word “sanctions” not only is he denying any wrongdoing on the MDC’s part, he is also subjecting Zimbabweans to further economic hardships, poverty, and psychological damage.
There are sanctions written in black and white on Zimbabwe and sugarcoating the word will not make the pill less bitter.
The MDC called for sanctions and this is a documented fact.
The Prime Minister addressed the Sub-Committee on African Affairs of the Committee on Foreign Relations of the US, the Foreign Relations Committee itself and interacted on numerous occasions with the members of these committees in a bid to push for regime change agenda in Zimbabwe through sanctions among other tactics.
Infact, on some of his visits to the US, Prime Minister Tsvangirai was introduced to other Senators and Representatives in a bid to buy votes for the Bill that later became ZIDERA.
So when the MDC turns around and says it is not their responsibility to deal with the issue of sanctions, who do they think they are fooling?
Forget all that nonsense about Zimbabwe having failed to pay its interest on loans and as such it cannot get any more money from global financial institutions.
How many countries in Africa and Latin America have had their debt cancelled or restructuredd under the increased North-South cooperation umbrella?
How is Zimbabwe different from any of these countries?
Why has America refused to engage the one man who matters the most when it comes to Zimbabwe, its President Robert Mugabe?
America is holding to the belief that its true and tried method of destabilizing countries through poverty and economic strangulation will work anytime soon as the MDC-T consolidates its regime change agenda through its position in the inclusive Government.
The coloured reading glasses came off soon enough for Finance Minister Tendai Biti. What used to be good for the goose remains good for the gander and as such the poor man is having problems trying to find a way out for Zimbabwe’s empty coffers. [See Youtube: The MDC Finally Accepts The Effect Of Sanctions - MrK]
Given his animosity to the RBZ governor Dr Gideon Gono, Biti is not likely to try out the two heads think better than one strategy.
His recent actions expose him for the fake that he is. Zimbabwe’s Finance Minister certainly likes being in the news.
Well, I have a headline for him “Minister Fired For Stupidity”. Unfortunately he cannot be fired because his boss the Prime Minister has no control over him and President Mugabe wanting to keep the peace in the inclusive Government will have to find someway of pulling us out of this latest escapade.
Who in their right mind refuses US$510 million loan with 0.26 interest when they have an empty pocket and a whole country that needs attention?
Biti needs to stop playing fiefdom with Zimbabwe’s economy and finances.
While I understand that those from the MDC-T pinnacle in government are getting salary subsidies from their paymasters, sorry partners in the West, they are condemning the rest of Zimbabwe to poverty.
History teaches a very important lesson time and again: Keep the masses full and happy and you can get away with practically anything. A hungry man is an angry man. Marie Antoinette learnt that the hard way.
While the Bitis and Chamisas of the MDC-T were suckling their mothers' breasts, the men and women who form Zanu PF’s support base were living by hook and crook fighting for their freedom.
To have the MDC-T call themselves democrats and reformers is an insult to the name Zimbabwe.
Zimbabwe was not born out of selfish individuals like those witnessed in the MDC-T hierarchy who like the proverbial dog, bites that hand of its owner.
How would our reformers like it now that they are in government to have South Africa cut of electricity and close its borders to Zimbabwe because their party refuses to honor what it signed up for in the GPA?
Only men with no dignity have the gall to continually deny what is evident to the ordinary Zimbabwean.
While the MDC-T thinks it is hiding its shame, it is actually exposing itself. The long and short of the story is this: "If you take a thief and make him the hen house guard, you cannot blame anyone but yourself when the chickens start missing".
The MDC-T took thieves, rapists, liars who are good at pleasing and entertaining crowds and made them their representatives, so when their members of parliament, councillors and ministers start stealing, extorting bribes, and raping, the party has no one to blame but itself.
Accusations of selective prosecution, arrests, and sentencing are nothing more but smoke screens to displace attention on the band of criminals some people made the mistake of voting for last year.
Sanctions, restrictive measures, travel and trade bans or whatever one may choose to call them, have done one thing and that is ruin the lives of many decent hard working Zimbabweans.
It is an affront to the men and women of this country to have self-serving pundits disguised as politicians to ask them to compromise their nationalistic values for thirty pieces of silver.
What has been happening in the Prime Minister’s office needs to be stopped.
I am one of the many Zimbabweans who are tired of sitting in a bus that is going nowhere because it has flat wheels, no engine, and certainly no fuel.
Despite promises by the "whindis" that the bus will be departing soon, the bus driver is yet to start the bus because apparently he can't find the key. The mechanic who is fixing the engine does not have any qualifications and his eyes have a glint in them that is typical of mentally deranged persons. The wheels that are being fitted on the bus are all of different sizes and the fuel container was contaminated so the conductor and another "whindi" are trying to clean it.
It is quite obvious this marriage is not working out, continued hate speech from top portfolio holders in the MDC-T indicates that nothing has really changed.
Recently Senator Gutu wrote an article where he was discussing the matter of having all top senior civil servants and politicians declare their assets.
In his usual half-truth telling manner, he went on and on about how there are no sanctions but just corrupt leaders. Well Senator Gutu sure is a chip off the old block when it comes to his anti Zanu PF rhetoric. His father would be very pleased that he is one apple that did not fall far from the tree.
Maybe Senator Gutu and his fellow MDC-Ts can start by coming out in the open about the salaries they have been receiving from the World Bank and all those manies they have been receiving from the US to sell our birth right and explain to us what exactly this kind of practice is called. I call it corruption mixed with a little bit of greed and a pinch of deceit.
The MDC-T has been a puppet programme for regime change since its inception.
Eddie Cross who now goes around calling himself a democrat these days and comparing President Mugabe to Hitler can attest to the fact that all that “they” want are their farms back and everything will be peachy.
It is satanic for the Crosses and Gutus of the MDC-T to continue to vilify the only party whose ethos embraces the essence of what it means to be Zimbabwean.
Take note dear MP and Senator. The only reason you hold these positions is because your sponsors proved to have deeper pockets than the men and women who gave their youth and lives to fight exactly what you represent
Eddie Cross, Tendai Biti, Nelson Chamisa, Obert Gutu, Gile Mutsekwa, Morgan Tsvangirai are not the ordinary man on the street. When one of their children, wives, or even themselves falls sick, they do not take a moment to ask around what is cheaper and better going to the neighborhood doctor, clinic or general hospital or which pharmacy has cheaper medication.
They are not bothered that the measly US$150 they are getting as a salary cannot last past payday. Their bills are catered for. They have no transport worries. They have party and government vehicles, which is why they can say with a straight face: "There are no sanctions on Zimbabwe."
They say if you repeat a lie long enough it becomes the truth, but this lie is just refusing to become the truth.
Why is it that it is only those in the MDC-T who refuse to acknowledge that there are sanctions on Zimbabwe? The AU, Sadc, and many leaders on the continent have all called for the removal of sanctions and yet a handful of men and women refuse to accept what everyone else sees.
Freedom, justice and democracy were not handed over in a plate to blacks and it is surely not going to be handed back in a plate.
Rhodesian mercenary turned MDC-T policy coordinator Eddie Cross got it right, no money will come from “our leading friends in the world community” until “we deliver on these key issues”; top issue being the reversal of the Land Reform Programme.
The reason they say Rhodies never die is because they have no place to be buried. Rhodesia is gone and Zimbabwe will never be a resting place for them.
The earth of Zimbabwe has refused to give rest and peace to these evil men that is why they seek to now use fancy terms and rules to coerce our land to accept them.
Labels: FAST TRACK, GORDEN MOYO, HIPC, LAND REFORM, MDC, RHODESIANS, SANCTIONS, TENDAI BITI, ZDERA
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Should Zambians in Diaspora Come Back
November 20, 2008
By Wesley NgwenyaSeveral years ago I was privileged to meet former president Levy Mwanawasa in Washington DC when he attended the annual United Nations Security Council Meeting. This was the year that Mwanawasa had just ascended to the highest office in the land. During the semi-formal meeting at the Zambian embassy in Washington DC, the President encouraged the many Zambians present to come back home to contribute to the rebuilding of the economy.
At the time I was doing my last year at one of the universities in the area. With the passion I have for my country, I took the president’s appeal very serious. A few years later I packed my belongings and came straight home to help in the rebuilding of my country. I had been gone to the United States for nine years and during that time had never come back home. I experienced reverse “culture shock” from the dilapidated infrastructure around the city to the many people standing around street corners with nothing to do. It was then it really hit home in my mind on how real and high unemployment rate was in my country.
The next day after arriving I went straight to work—applying for a job to various businesses, government, and non-governmental organizations where I thought my education and experience would be taken advantage of. I have never been offered a job to this day although I was able to attend a few interviews. I must mention here that at my last count I had applied to roughly 260 places over the period of a year and half.
I guess the big question is; Should Zambians Abroad Come Back Home? Or to rephrase the question; Are we ready for Zambians Abroad to come back home? During my stay abroad, I attended meetings of various African politicians and Zambians politicians who continue preaching about creating jobs and appealing for the Diaspora to come back home. Unfortunately, little is being done on the ground to prepare it for these people when they come. I find it frustrating to struggle like this in my home country. In the United States the employers rushed to offer me a position when they looked at my qualifications. On the other hand, employers here don’t seem to appreciate the education and experience I have. Not to mention that I graduated on the top tier of my class in Business Administration and Marketing. My experiences have included working as a manager for one of the largest financial institutions in the world. Not to mention that in all my marketing position I have won awards for best performance. Not to mention that I went to one of the best private universities in the United States. Not to mention that I also got another degree in communication from an elite private school.
If I was an employer here in Zambia and a CV that looked like this came to my desk I would be wanting to talk to this person. Businesses in Zambia must realize that Zambians educated abroad are not a threat to their teams but an asset that they must take advantage of. The world in becoming more and more integrated into one marketplace. Businesses with personnel who have a worldview approach and a global touch to business will stand the chance to benefit. Employees with a global view bring a wealth of experience including the ability to work well with different people from other cultures as well as people of different ages.
Government has absolutely failed in changing the unbelievably high unemployment rate in this country. They have failed the Zambian people in having poor labor laws that disadvantage many Zambians. For example, why hire a South African to be a cook at a hotel, or an American to work as a marketing manager, or a Chinese (who can hardly speak English) to work as a secretary? Needless to say that companies go to great lengths in acquiring work permits and other immigration papers for these people. Moreover these people are often paid three times or more what a more qualified Zambians is willing to take home. Is there any business sense in this other than the fact that these business owners have identified our weak labor laws and will relentlessly take advantage of them?
If government will attract the Zambian Diaspora to return home they need to even the playing field for everyone. As a matter of fact, the playing field should advantage the Zambians. Foreigners come to Zambia with little or no capital but within years they get wealthy. Of course they get wealthy since they get the huge government contracts, don’t have to queue for anything, and easily get business loans to start their businesses. Why advantage foreigners over your own citizenry? Do you think this would happen in Canada, Germany, Botswana or India? Of course not. The government, therefore, has an obligation to create an environment suitable for a poor woman in Solwezi to establish her business favorably the way an Australian will. It has an obligation to contract a Zambian owned business in Maamba over a Chinese owned business. It has an obligation to employ a returning Zambian student from the United Kingdom over an unqualified South African.
Sometimes, there is a stereotype that Zambian who come back have money—actually they don’t. Many of them worked hard in their host countries to acquire the little they had. Thank God at least many times they were recognized and appreciated for their hard work. Saving money was not so easy because of the demands that come with living in a foreign country. Therefore, when they come home they equally need to be empowered by giving them opportunities to get loans and establish businesses if they are to be self-employed. The Citizens Economic Empowerment Fund is a great initiative, however many Zambians don’t even know there is such a fund let alone how to access it. The application papers are unavailable and have to be bought at high prices. The application paper itself is complex with financial jargon for a graduate even. How will this help empower Zambians?
As I sit on my computer and put these thoughts to paper, I wonder of how things will be different for me a year from now. Will I find a job—just any job? Will my business pick after accessing that loan? I wonder about the blind lady on the fly over bridge on Church Road or the crippled lady across from Central Park. How will their lives change a year from now? Will their luck to have a meal continue to be in the hands of passer-bys in these tough times? Or should it be in the hands of the government? I wonder.
Categories: Lifestyle
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Labels: CABINET, HIPC, ICT, PAC, SITUMBEKO MUSOKOTWANE
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JCTR calls for utilisation of gains from debt cancellation
By Chibaula Silwamba
Wednesday January 23, 2008 [03:00]
THE Jesuit Centre for Theological Reflection (JCTR) has said this year’s national budget needs to take advantage of the gains from debt cancellation to enhance poverty reduction through implementation of policies that increase household productivity.
In an interview yesterday, JCTR debt, aid and trade co-ordinator Muyatwa Sitali said to increase household productivity, it was essential to create and support a highly productive and dynamic industrial base rather than concentrate on promoting consumption related development such as retails and chain stores.
“These narrowly improve the employment base but increase importers thereby affecting the balance of payment which is the ingredient to a ballooning external and domestic debt,” Sitali observed. “Opportunities for improving the industrial base range from new investments as well as innovative ways of improving quality and adding value to Zambia’s products which are often raw materials. This paves the way for better and efficient technologies which can be encouraged locally and learnt from other countries.”
Sitali said although foreign direct investment could potentially contribute to this objective, it should not substitute the role of the state to ensure that there was a favourable environment for investment especially local producers and investors.
He urged the government to provide incentives in this year’s budget whereby Zambians that want to invest in production sectors could be exempted from paying duty on imported equipment.
“Increased household productivity has the potential to contribute significantly to aggregate national income and even lead to the over seven per cent growth desirable for attaining the Millennium Development Goals (MDGs) in Zambia,” Sitali said.
Labels: HIPC, JCTR, MUYATWA SITALI
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