IRIN Focus on South Africa’s intervention with lending agencies

South Africa plans to intercede between Zimbabwe and international donors to help its northern neighbour attract financial aid and reverse the economic crisis plaguing President Robert Mugabe’s government. According to analysts and officials contacted by IRIN this week, Mugabe has reluctantly accepted that the country’s economic crisis needs to be addressed as a matter of urgency. Zimbabwe’s neighbours, especially South Africa, they said, were concerned at the country’s tarnished image resulting from the occupation of white-owned farms, violence during the run-up to parliamentary elections in June, and its tense relationships with Britain and the International Monetary Fund (IMF). A new approach to donors Pippa Green, a spokeswoman for South Africa’s Finance Minister Trevor Manuel, told IRIN that South Africa will play both an advisory and interceding role to convince Mugabe’s government to return to the rule of law, while at the same time impressing on the IMF and other donors to impose “realistic” conditions to their financial support. Green was commenting after Manuel joined President Thabo Mbeki for talks with Mugabe in Harare on Wednesday. She said South Africa would help Zimbabwe’s economic recovery. “We as a neighbour have a responsibility to communicate positively the kinds of decisions being taken here in Zimbabwe and to ensure that there is reward internationally for the tough decisions that the Zimbabwe government is prepared to make,” Manuel said. Analysts said they expected that Manuel, in his capacity as this year’s chairman of the IMF’s board of governors, will help convince the IMF and World Bank to re-open negotiations with Zimbabwe on financial support. Redressing the international perception Zimbabwe’s new Finance Minister Simba Makoni, said of the talks: “We looked at measures that we can take to redress the negative perception of Zimbabwe as a country which does not uphold the rule of law, as a country which is not secure.” The basis of this approach, according to economists, includes Mugabe’s government’s willingness to speed up its privatisation programme, reduce the public service and devalue the currency. Makoni also said the delegations discussed the need for the involvement of the private sector in helping recovery and agricultural restoration. Mugabe accepts the new approach Eric Bloch, a Zimbabwean economist, told IRIN that Mugabe had reluctantly accepted that the country’s economic crisis needs to be addressed. “Mugabe’s government has come to the realisation that economic restoration is an urgent matter and that this can be done with the help of international donors such as the IMF,” Bloch said. He said the IMF would send a mission to Harare on 24 August to evaluate the government’s economic and political programmes with a view to resume financial support to the country. Bloch said he believed there was likely to be an accelerated privatisation programme in the next nine months in keeping with conditions for the resumption of international donor support. “Economic and political governance reform programmes will have to be speeded up to convince international donors to support the government,” Bloch said. He added that he was cautiously optimistic these reforms would be carried through. “Some of the new ministers are not members of the ruling ZANU-PF party, and they will not hesitate to resign if they feel there is political interference in carrying out their programmes.” Mugabe, at the same time, he said, would like to retire from the political scene in 2002 leaving the country with a sound economic base.