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Mugabe's begging bowl
Business Day (SA)
July 19, 2005

http://www.businessday.co.za/articles/opinion.aspx?ID=BD4A70612

GOVERNMENT seems to have decided on a reassuringly measured response to Zimbabwe’s request for substantial financial assistance to help it through its economic travails.

While it remains unclear how much it is that President Robert Mugabe is ultimately seeking — some reports speak of up to $1bn — it is clear that our northern neighbour is in deep trouble. That has been obvious for years, but Mugabe has managed, through a series of deals with countries such as Libya and China, to stay afloat. Clearly, now, the crunch has begun to tell.

The question is what to do. If we don’t lend Mugabe the money, we may force him to make an accommodation with someone else, and that could be both unpredictable and nasty. The last thing SA needs on its doorstep is a neighbour in hock to a power over whom we have no influence.

And even if he is unable to pull any more financial rabbits out of his hat, a truly cash-starved Zimbabwe is a most unattractive prospect for SA. The effective bankrupting of that economy will, as sure as the sun rises, force more thousands of Zimbabweans to make the crossing into our country.

On the other hand, to give him the money would cause controversy, both at home and abroad. We do most certainly not now need to become recognised around the world as bankers to a tyrant.

Also, there is obviously little prospect that Harare could ever pay the loan back. Zimbabwe is too badly damaged.

President Thabo Mbeki is in a bind. There is no point imposing on any loan conditions that Mugabe might find too humiliating, however tempting that might be. That would force him to try to tough it out or look elsewhere.

Mbeki’s only option is to look upon the request as would the manager of a bank in a small town. You know the client — in fact, you played golf with him just yesterday.

That bank manager would most likely say, well, look, send us your legitimate bills for essential goods and services and we will pay them for you, up to an agreed limit.

In the meantime, the bank expects you to restructure your life in a way that measurably and rapidly improves your earnings and your credit risk.

In Mugabe’s case, that would mean desisting from any further repression of his people and immediate moves to boost his traditional export revenues massively. Basically, that means food and tobacco. If not, he should be shown the door.

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