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SA told to think twice about loan for Mugabe
Moshoeshoe Monare and Sheena Adams, The Star
July 20, 2005

http://www.iol.co.za/index.php?set_id=1&click_id=84&art_id=vn20050720063410141C267739

South Africa should tell Zimbabwe to get its economic-political house in order before bailing out its cash-strapped neighbour.

This was the warning on Tuesday from Harare economists as Pretoria stayed mum about the R6-billion lifeline President Robert Mugabe has asked for.

Zimbabwean government spokesperson George Charamba referred inquiries regarding the bailout to South African authorities.

He added: "Any country needs a bailout".

Harare-based economist John Robertson wanted to know how Harare would repay a loan because the Zimbabwean economic crisis was not likely to abate soon.

"South Africa should say to Zimbabwe: We want you to change your policies, otherwise we know that you will never be able to repay the money.

"That is what the International Monetary Fund said. South Africa will do Zimbabwe another disservice if it continues to support it without forcing it to change," said Robertson.

"South Africa is in a good position right now to use its economic muscle to intervene politically," he added.

If Zimbabwe did not get any bailout it would go the Somalian route, "where the mockery economy is controlled by warlords. If it were a company I would say it will collapse and South Africa will bear the brunt."

Robertson said the economic meltdown in Zimbabwe was caused mainly by political interference in the economy through the controversial land grab programme.

"Mugabe chose to control everything for political reasons and has done immense damage to the economy by interfering with the markets.

"The government does not have the power to take on market forces, which are very powerful. Like the force of gravity, if you choose to defy the law of gravity, you are going to get hurt."

Professor Brian Raftopoulos, a development studies lecturer at the University of Zimbabwe, said South Africa had to work out a long-term project to help Zimbabwe to reform its economy.

"The government has a limited amount of foreign exchange to run the economy. The black market is very strong, so you can see that there is a need for economic reform and not just a bailout."

Jenni Williams, of the women's empowerment NGO Woza (Women of Zimbabwe Arise), said that besides devastating food shortages, there was a fuel crisis that never seemed to end as well as constant water and electricity cuts.

All basic food stocks were depleted either because there were no supplies in the country or because the four-year-long fuel crisis prevented manufacturers from delivering goods.

Williams said that with the average Zimbabwean earning between R1 000 and R2 000 a month, inflation continued to leave "big dents" in people's earnings.

"The ordinary person cannot even afford to use public transport to come to town anymore. If you are lucky to find transport, the price may have doubled, so you won't have money to get home," Williams said.

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