Donors concerned at cost of DRC intervention

Major international donors said on Monday they were concerned that the cost of Zimbabwe’s military intervention in the Democratic Republic of Congo (DRC) was outstripping the country’s ability to sustain development in key social sectors such as health, farming and education. Statements by the International Monetary Fund (IMF) and the European Union (EU) coincided with the release at the weekend of the country’s national budget for the year 2000. In his budget speech to parliament, Finance Minister Herbert Murerwa said inflation, now at 70 percent, had become the “number one enemy” in the fight against poverty and unemployment. He denied media reports in recent weeks that the government had misled the IMF on the cost of its DRC intervention. But both international bodies said on Monday they still did not have a clear idea of how much the country was spending on its DRC intervention. Analysts in Zimbabwe insisted that the cost would decline now that a ceasefire had been signed. Earlier this month, the IMF and the World Bank put aid programmes worth over US $340 million under review. An IMF team, headed by Anupam Basu, deputy director of the Africa Department, left Zimbabwe at the weekend after a week of talks with the issue still unresolved. “A lower budget deficit than that presented to parliament is needed for 2000 in order to reduce upward pressure on prices and interest rates and increase the resources available to finance private sector activities,” the IMF office in Harare said. In a terse statement, it added: “Another fiscal issue covered in the discussions (Basu held with Reserve Bank, Central Bank and the finance ministry) was the need to assess and clarify the costs of the war in the DRC.” It said the IMF would remain in close contact with the government and that follow-up talks would be held in coming months. IMF officials declined to discuss the issue further. An EU diplomat told IRIN Zimbabwe needed a clear strategy to sustain budgetary support in the social sectors, and the EU funding for support in the education, health, agriculture and rural development sectors was in place. “But aid for structural budgerary support could be a problem. It is likely we would follow the lead here set by the IMF and the World Bank. What we do not know is how much the DRC intervention is costing or when it will end. There is no doubt that this is a complicating factor.” Murerwa said the budget deficit for the year 2000 would be 3.8 percent of GDP or 11.4 billion Zimbabwe dollars (US $31.6 million). Defence spending would rise 58 percent to 8.2 billion Zimbabwe dollars (US $22.7 million), second to the Ministry of Education, Sports and Culture which was allocated 14.6 billion Zimbabwe dollars (US 40.5 million). In a country, where according to government figures, 1,200 people are dying weekly of HIV/AIDS, health was allocated the equivalent of US $16.7 million. But Murerwa, in what analysts called a tilt to donor concerns, pledged “a deliberate shift in government spending towards social service delivery over the next three years”. Western diplomats, who said aid allocations were affected by the general economic climate, told IRIN they feared that the finance ministry was often overruled by higher government authorities on key fiscal and budgetary spending issues.