The International Monetary Fund decided on Friday to restore Zimbabwe’s voting rights after a seven-year suspension over failure to pay $1,3- billion it owes the organisation and other creditors.
The decision by the IMF’s executive board constitutes a first step toward endorsement of the economic policies of the coalition government formed a little more than a year ago by President Robert Mugabe and longtime rival Prime Minister Morgan Tsvangirai.
The impovershed Southern African nation’s economy has improved under the shaky coalition with 4,7% expansion of gross domestic product last year but a continuing political impasse makes its future uncertain.
The IMF said Zimbabwe has started reducing the $140-million it owed the Washington-based lending organisation at the end of 2009.
But IMF officials said it has to produce a programme to settle debts to other creditors, such as the World Bank and bilateral lenders, that total $1,3-billion before IMF lending can resume.
In the meantime, Zimbabwe can again participate in IMF decision-making and receive advice from the fund in special areas such as stabilising the banking system, taxation policies and budgeting.
Repayment
IMF officials said they plan to send a team to Zimbabwe soon to discuss creditor repayament and other issues.
“Access to IMF lending resources is also subject to IMF policies on the use of such resources, including a track record of sound policies and the resolution of arrears to official creditors, which would require donor support,” the IMF said.
“Following today’s decision any remaining issues on further normalisation of relations will be addressed over time.”
The board said its decision on voting rights was a response to a request from Zimbabwe’s Finance Minister Tendai Biti.
The IMF began imposing a number of escalating measures against Zimbabwe starting in 2001 and suspended voting rights in 2003.
Zimbabwe was almost expelled from the 178-nation organisation in 2006 when it made a partial payment of arrears.
In a report last year on Zimbabwe’s economy, the IMF said “poverty and unemployment have risen to catastrophic levels, with 70% of the population in need of food assistance and a cholera epidemic claiming more than 4 000 lives.”
The unity government Mugabe formed with Tsvangirai’s Movement for Democratic Change is trying to turn around an economic crisis that began with a land distribution campaign in 2000. The often-violent campaign disrupted the agriculture-based economy of what was once the region’s breadbasket.
Mugabe blames Western sanctions for his country’s economic woes even though they are targeted at him and his Zanu-PF party allies and not the country.
The IMF report said the revival of Zimbabwe’s economy “depends critically on quickly attracting private and domestic and foreign investors and improving competitiveness”.
But donors and investors have been slow to respond to calls for help from the unity government, waiting to see whether it fulfills promises to shore up democracy and the rule of law. – Sapa-AP