ZIMBABWE: A donor-dependent region seeks to bail out Zimbabwe
JOHANNESBURG , 27 February 2009 (IRIN) - Southern Africa's finance ministers are mulling over a US$2 billion rescue package for Zimbabwe - 60 percent less than a 2008 estimate by the UN Development Programme (UNDP) of the financing required to haul the country out of its economic malaise.
A two-day meeting of the Southern African Development Community's (SADC) 15 finance ministers in the South African coastal city of Cape Town is being dominated by discussions about how best to avert the collapse of the once prosperous country.
Zimbabwe's Prime Minister, Morgan Tsvangirai, who was put under intense pressure by the SADC to embrace Zimbabwe's unity government, has appealed for US$5 billion to rebuild the shattered country - mirroring the amount UNDP said was required.
Trevor Manuel, South Africa's finance minister and chair of the Cape Town SADC meeting, told local radio: "I was present when Prime Minister Tsvangirai gave the number, but it was just a number. There's a document ... that actually splits the immediate costs over the next 10 months into two amounts of about a billion dollars each."
This included a US$1-billion loan to "restimulate retail and all kinds of things ... that's one billion we are exploring", said Manuel. "The other [is] about a billion dollars for emergencies in education, health, municipal services and some infrastructure."
Zimbabwe's economy is a twentieth of what it was in 1997 - the government stopped counting the inflation rate in July 2008, when it reached 231 million percent - seven million people, or more than half the population, are dependent on food aid, infrastructure has collapsed, and a cholera epidemic has killed nearly 4,000 people and infected over 83,000 people in six months.
Cheryl Hendricks, a senior research fellow at the Institute for Security Studies, a political think-tank based in Pretoria, South Africa, told IRIN: "SADC is in a catch-22 situation. It needs the unity government to work, but for it to work you need a peace dividend, so you have to put money into it."
However, Hendricks said the SADC region, which is heavily donor dependent, was feeling the effects of the global slow-down on its commodity-based economies and would probably not be able to provide the US$2 billion without donor assistance.
Lift sanctions call
South Africa's foreign minister, Nkosazana Zuma, used the Cape Town meeting as a platform to call for the lifting of European Union (EU) sanctions targeting more than 200 of the ZANU-PF elite.
Mugabe has blamed the country's woes on the sanctions, but the EU maintains that the country's collapse is a consequence of gross mismanagement and anti-democratic practices.
The EU has maintained a wait-and-see attitude towards the unity government to determine whether or not it will succeed in re-establishing democratic and good governance norms before it reviews sanctions.
Reports of a US$250,000 birthday bash for Mugabe's 85th birthday and an attempt by ZANU-PF vice-President Joyce Mujuru to sell US$90 million of gold bullion to a London brokerage are unlikely to change the EU's position, but it is ZANU-PF's flouting of the unity agreement that causes greatest concern.
In an interview marking his birthday, Mugabe dismissed calls by Tsvangirai's Movement for Democratic Change (MDC) to dismiss central bank governor Gideon Gono and attorney-general Johannes Tomama.
The MDC said these unilateral appointments were contrary to the terms of the unity deal, which demands consensus from all parties.
"I don't see any reason why those people should go, and they will not go," Mugabe told the state-run newspaper, The Herald.
Gono's governorship of the central bank has seen the inflation rate reach 6.5 quindecillion novemdecillion percent, while Tomama has frustrated the release of detained MDC activists, contrary to the terms of the unity agreement.
Theme(s): (IRIN) Economy, (IRIN) Food Security, (IRIN) Governance
Copyright © IRIN 2009
This material comes to you via IRIN, the humanitarian news and analysis service of the UN Office for the Coordination of Humanitarian Affairs. The opinions expressed do not necessarily reflect those of the United Nations or its Member States.
IRIN is a project of the UN Office for the Coordination of Humanitarian Affairs.
|Join the GlobalSecurity.org mailing list|