IMF to decide on voting rights

The International Monetary Fund (IMF) will meet next month to decide whether to suspend Zimbabwe's voting rights following the country's failure to meet its repayments to the institution. The news that the country can't make the payments, in spite of previous assurances that some money would be forthcoming, adds to the burden of being unable to raise enough foreign currency to pay for basic essentials like fuel, power supplies and agricultural inputs. Zimbabwe is currently unable to access further funds from the IMF and, if the suspension is carried out, will lose its right to elect representatives to the Fund or have any say over financial issues. IMF Senior Resident Representative Jerry Johnson told IRIN on Friday that in the early 1990s, Zimbabwe received IMF assistance for reform programmes when the economy appeared to be poised for higher growth and investment. But by the late 1990s, financial problems started setting in and the country could not always honour its commitments. Besides a small repayment last year, and in spite of assurances that US $1.5 million would be paid every three months, the country remains in arrears for $223.8 million. However, Johnson said: "We are not just saying pay up or else, we are saying improve your policies - then we can move with you." He said the Fund believed the country was making macro-economic policy changes that were "significant moves in the right direction" and showed a will to address these issues. These include changing the fixed exchange rate from Zim $55 per US $1 to Zim $824, reviewing price controls, and the "homegrown" New Economic Recovery Plan, launched in February by business, labour and the government. The country now needed to work on mobilising and maximising the use of foreign exchange, improving agriculture, and building relations with bilateral donors. "If these things continue, then there will be a response from the rest of the world," Johnson said. The board meeting follows a visit by an IMF team in February who found that the economy had experienced a progressive and sharp deterioration over the past four years.