Fuente : World Bank
http://www.worldbank.org

IMF Urges Mugabe To Save Economy

/noticias.info/ As it began emergency consultations in Harare on Monday, the International Monetary Fund (IMF) fact-finding mission urged the Zimbabwe government to take urgent measures to save the country's economy from collapse, reports Business Day (South Africa).

The IMF’s call came ahead of the Fund's board meeting on Zimbabwe's fate in the international lending organization on September 9. Harare faces expulsion from the IMF for its failure to repay arrears of $295 million. The IMF team told Finance Minister Herbert Murerwa and Zimbabwe Reserve Bank governor Gideon Gono to adopt a comprehensive policy package to tackle the worsening economic crisis. The team is also expected to meet President Robert Mugabe, among others.

The IMF team's entry point was to review the recommendations it made to the government in June. They wanted to know how far the government has gone to implement recommended policy measures. In June, the IMF told the government to take decisive action to lower the fiscal deficit, tighten monetary policy and work towards the establishment of a unified, market-determined exchange rate. It also urged Zimbabwe to adopt structural reforms, such as the removal of administrative and price controls, in order to ease shortages and restore private-sector confidence.

The IMF, which has projected a 1,6 percent economic shrinkage for Zimbabwe this year, has warned output would decline sharply this year, in part due to the continued difficulties in agriculture which have been exacerbated by drought and worsening foreign exchange shortages. The Fund told Harare clearly that unless there was a fundamental policy shift, the budget deficit would grow markedly partly due to the cost of higher food imports, interest payments and higher pension costs. It also said that the central bank's substantial producer and credit subsidies, and budget deficit would fuel a sharp increase in money supply, and hence inflation, which surged from 164 percent in June to 254 percent in July.

The Australian meanwhile reports that even if South Africa helps Mugabe's Government pay its debts, that may not be enough. South Africa has agreed to help out with meeting the outstanding debt to the IMF, but has attached strict conditions to the loan, such as insisting that Mugabe begin talks with the Movement for Democratic Change (MDC), the opposition party, something he has vowed never to do. South Africa's President Thabo Mbeki is under severe pressure both at home and internationally to crack down on his errant neighbor, and he is likely to insist that Zimbabwe meet his conditions before lending it any money. Up to now, Mugabe has rejected any conditions to the loan but analysts say he may have no choice but to accede to South Africa's demands if he is to get the money he needs.

The daily adds that expulsion means almost no other international credit financiers will touch Zimbabwe, as most lending organizations take their cue from the IMF in setting interest rates and evaluating risk. The expulsion will have potentially catastrophic results for Zimbabwe's economy. It will signal Zimbabwe's status as a failed state and, as such, the country will find it almost impossible to import fuel, electricity and other essentials without paying hard cash up front.

The Montreal Gazette (Canada) also reports that delivering rare words of censure to his Zimbabwean counterpart, Mbeki urged Mugabe to "understand'' that his actions had "an impact'' on his neighbors. Mbeki said that the economic collapse in Zimbabwe affects the whole region. Zimbabwe's crisis has caused millions of its citizens to flee to neighboring countries. Official figures issued in Harare suggest about 3.4 million people fled, with almost half having gone to South Africa. Mbeki fears if the collapse continues the numbers of migrants will climb further. notas_de_prensa_archivo