IMF suspends voting rights

The International Monetary Fund (IMF) has suspended Zimbabwe's voting and related rights because the country has not sufficiently strengthened its cooperation with the IMF over policy implementation and payments. An IMF statement said economic and social conditions in Zimbabwe had deteriorated progressively over the past four years. Inflation reached 270 percent in the year through April 2003, while welfare and poverty indicators have also sharply fallen. "The Zimbabwean authorities introduced some policy measures since early 2003 to arrest the decline in economic activity, including a devaluation of the exchange rate of the Zimbabwean dollar from Zim $55 to Zim $824 per US dollar for most transactions, adjustments in fuel and electricity tariffs, rolling back price controls, and raising interest rates moderately," the statement said. "However, the authorities have not adopted the comprehensive and consistent policies needed to address Zimbabwe's serious economic problems." The suspension means Zimbabwe can no longer appoint a governor or alternate governor to the IMF, participate in the election of an executive director to the board, or cast its vote in decisions on IMF policy or matters affecting the country. Zimbabwe has been in continuous arrears to the IMF since February 2001 and owes US $233 million. In September 2001, Zimbabwe was removed from the list of countries eligible to use resources under the IMF's Poverty Reduction and Growth Facility. In June 2002, the board adopted a declaration of non-cooperation with respect to Zimbabwe and suspended all technical assistance to the country. The IMF urged the Zimbabwean authorities to build on recent efforts to strengthen cooperation, and said it would review its decision within six months.