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SA to throw Zimbabwe lifeline as IMF baulks
Jonathan Katzenellenbogen, Business Day (SA)
July 18, 2005

http://www.businessday.co.za/articles/topstories.aspx?ID=BD4A70031

SA IS set to grant cash-strapped Zimbabwe a substantial line of credit, following the visit to SA of a high-level Zimbabwean delegation last week, and amid growing signs that Harare faces expulsion from the International Monetary Fund (IMF).

Sources said yesterday that the Zimbabwean delegation met with Finance Minister Trevor Manuel and Reserve Bank governor Tito Mboweni, and that the country was likely to soon obtain a credit line for electricity, petrol and food. It was unlikely the amount involved would be anything close to the R6,5bn mentioned in weekend media reports.

The critical shortage of foreign exchange comes at a time when new international pressures on the czountry could mount once the report of the United Nations (UN) secretary-general’s special envoy, Anna Tibaijuka, into the wave of mass evictions over the past two months, is released.

With only China among the five permanent UN Security Council members not expressing outrage over the evictions, it is increasingly likely the issues will be taken up at security council level.

Last week MPs from the ruling Zanu (PF) party protested for the first time in parliament about the critical petrol shortages.

Banking sources said that Zimbabwe was likely to receive a credit line from SA that will be in the hundreds of millions rather than billions of rand.

The sources said that under the arrangement it was likely SA will directly pay state-owned power utility Eskom and South African petrol distributors and grain millers for aid.

It is not known if SA has insisted President Robert Mugabe talk to the opposition MDC as a condition for the line of credit. The finance ministry was unavailable for comment yesterday.

The Zimbabwean delegation’s visit came days after Deputy President Phumzile Mlambo-Ngcuka met Mugabe and his deputy, Joyce Mujuru.

There has been mounting speculation that SA has been toughening its position on Zimbabwe, but no statements suggesting a shift away from “quiet diplomacy” and efforts to bring Zanu (PF) and the main opposition party to the table.

However, African Union chairman, Nigerian President Olusegun Obasanjo, is keen to set up a panel to deal urgently with the Zimbabwean political crisis.

The issue of Zimbabwe’s possible expulsion from the IMF is not on the board’s agenda for this week. But speculation is high that Zimbabwe could be facing expulsion for its noncooperation.

In what is understood to be a plea for help and effort to forestall any attempt to take the country to the security council and expel it from the IMF, Mugabe is to visit Beijing soon. Mugabe has had a stated “look east” policy since the European Union and the US ascribed pariah status to his regime.

But in return for its extensive economic aid, Beijing has insisted on large mining and other concessions. China could be Mugabe’s last ally to forestall his country being taken to the security council now that Russia has condemned him as a “dictator”.

In the face of accusations that it is preventing more forceful international action in the Darfur province of the Sudan, Beijing could pay a heavy price if it were to protect Zimbabwe on the security council.

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