IMF visit not a panacea

The two-week visit to Zimbabwe by a six-man International Monetary Fund (IMF) delegation is not likely to offer a lifeline to the cash-strapped country for as long as President Robert Mugabe’s government does not change the policies that led to the suspension of donor support, economists told IRIN on Wednesday. The IMF delegation, according to IMF sources in Zimbabwe’s capital, Harare - which arrived on Monday - will be in the country for two weeks. It is expected that the IMF will hold discussions with a wide range of representatives of Zimbabwe’s society, including government. Economist John Robertson said the delegation is in the country to write an assessment report on the economic impact of the government’s policies. “The IMF is not going to offer Zimbabwe any financial support because of its failure to meet conditions that led to the suspension of support,” Robertson said. He listed these as an end to farm invasions, the return to the rule of law, withdrawal of troops in the Democratic Republic of Congo (DRC) and the resumption of payments of loans to the World Bank and other international lenders. “Zimbabwe is not meeting any of these conditions and it is unlikely the IMF will resume financial support until these conditions are met,” said Robertson. Zimbabwe, according to Robertson, defaulted on its obligations in May when its loan payments were 60 days overdue, leading to the World Bank suspending further disbursements. The country’s arrears are estimated at US $400 million, said Robertson, who added: “Zimbabwe no longer receives any money from international lenders because of these arrears.” The government’s decision to acquire 3,000 white-owned commercial farms to resettle landless Zimbabweans would increase poverty levels in the country and condemn many Zimbabweans to hunger, said Robertson. He said the 3,000 farms - although not yet identified - constitute two-thirds of productive white-owned farmland and employ about 250,000 people. Robertson said the seizure of these farms - which earn the country about US $1 billion annually - will reduce the size of the economy by half. “The economic and social implications for both Zimbabwe and neighbouring countries are serious,” said Robertson. He said unemployment in the country, already estimated at 50 percent, will spiral out of control, which could lead to an influx of hungry Zimbabwean refugees into neighbouring countries like South Africa, Mozambique and Botswana. Robertson did not believe President Mugabe’s government had the resources to carry out the seizures and resettle blacks on these farms. But the threat of the acquisitions has already discouraged the banks from extending loans to commercial farmers to prepare for the planting season. “Zimbabwe has only a few weeks to reverse the possibility of the total collapse of its economy,” said Robertson.