IMF to decide on Zimbabwe’s voting rights

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The International Monetary Fund will decide later this month whether to restore Zimbabwe’s voting rights in the Fund, Finance Minister Tendai Biti said.

Biti told Reuters in an interview that the move was in response to positive reforms implemented by the unity government formed last year by arch rivals President Robert Mugabe and Prime Minister Morgan Tsvangirai.
“There is a general understanding and support for the restoration of Zimbabwe’s voting rights. The IMF executive board will meet this month to decide on the issue,” Biti said.
“We were pushing for the restoration of Zimbabwe’s voting rights in the IMF. The US will support us, and we made similar requests to Germany and the UK, who will also support us in this regard.”

Zimbabwe, which Biti said needs at least $8 billion to rebuild its battered economy, had its voting rights suspended by the IMF in 2003 over policy differences with Mugabe’s government and payment arrears to the IMF.

The country is emerging from a decade of economic decline, which critics of Mugabe blamed on his land reform policies and economic mismanagement that led to hyperinflation.

Since the creation of the unity government a year ago, Zimbabwe’s economy is showing signs of recovery with gross domestic product growth at a better-than-expected 4.7% in 2009.

Samuel Itam, who represents a constituency of African countries at the IMF board, including Zimbabwe, said he was “cautiously optimistic” about Zimbabwe’s request for restoration of its IMF voting rights

He said the Zimbabwean government had paid off some of its IMF arrears and was working out a plan to clear the rest.

According to the IMF, Zimbabwe settled some of its arrears in 2006. The government committed to reduce a further $140 million in arrears through token quarterly payments of about $100 000 to the Fund from May 2009. Since then, the authorities have made $300 000 in payments.
“I am cautiously optimistic there will be sufficient support in recognition for the effort Zimbabwe has made to (meet) its obligations to the international organization,” Itam told Reuters in Washington.

Restoration of Zimbabwe’s voting rights would signal the international community’s confidence in political and economic reforms of the unity government.

Asked whether Zimbabwe could apply for IMF loans once its voting rights were restored, Itam said: “We will take that as it comes.”

He said Zimbabwe had been cooperating with IMF staff on policies needed to fix its economy and in discussions on how best to deal with its debt obligations to the institution.
“Zimbabwe needs the support for whatever progress it has made for that progress to be intensified,” Itam said.

The Fund has said that any access to IMF loans by Zimbabwe would require a “sustained track record of sound policies and donor support for the clearance of arrears to official creditors.”

Pic: Zimbabwe Finance Minister- Tendai Biti



Source: www.af.reuters.com