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ZIMBABWE: Loan request gives SA leverage to press for change
IRIN News
July 18, 2005

http://www.irinnews.org/report.asp?ReportID=48173

JOHANNESBURG - Amid news reports that Zimbabwe is seeking a massive loan from South Africa to offset chronic food and fuel shortages, political analysts say it's an opportune time for President Thabo Mbeki to push for political dialogue in the troubled country.

Although South African treasury officials confirmed meeting with their Zimbabwean counterparts in Johannesburg on Friday, both parties were tight-lipped about the possible loan.

Harare is reportedly requesting around US $1 billion to buy electricity, fuel and food, but banking experts say the loan, if granted, is likely to run into millions rather than billions of rands.

Joel Netshitenzhe, the head of the Government Communication and Information Services on Monday said the principles and considerations guiding the possibility of a loan would be Zimbabwe's "economic recovery" and "political normalisation".

President Robert Mugabe's government again finds itself in a precarious situation: up to four million Zimbabweans need food aid and petrol shortages are a perennial problem. With most of its conventional international credit lines cut, forex has been in short supply. To make matters worse, Zimbabwe now faces expulsion from the International Monetary Fund (IMF).

A brief flirtation with Libya as a possible source of fuel soured over terms of repayment; more recently Mugabe has turned to a number of Southeast Asian countries in an effort to secure hard currency.

Even though cordial relations with China, Malaysia and India have yielded some positive results, analysts point out that regional engagement, especially with South Africa, is key to economic recovery.

South Africa continues to face a barrage of criticism from local and international critics, who argue that Mbeki's "quiet diplomacy" has largely failed. They point to deepening poverty, rapidly deteriorating health care and a slew of human rights violations. South Africa's tacit support of the Harare government, they say, has only served to strengthen Mugabe's resolve not to engage the opposition and push ahead with policies that critics argue have worsened living conditions.

On the other hand, Mbeki has long maintained that Zimbabwe is a sovereign state and active interference in its domestic affairs would be misguided.

Observers point out that the Zimbabwe loan request puts South Africa in the position to attach a number conditions to granting the funds.

"South Africa can now make full use of the carrot-and-stick approach. If the loan is granted, it must be accompanied by a set of conditions, which include restarting talks with the opposition MDC [Movement for Democratic Change]. These talks are essential, as they will set the stage for constructive dialogue towards economic recovery," a Harare-based economist, Denis Nikisi, told IRIN.

"It is ironic that even though South Africa has constantly expressed support for Zimbabwe, the support has not improved the lives of ordinary Zimbabweans," Nikisi commented.

Zimbabwe's economic crisis deepened after 2000 as a result of the government's violent and haphazard land reform programme, and the drying up of aid. Parliamentary and presidential elections were condemned by many international observers as flawed.

Some political pundits have argued that the lifeline from South Africa might stave off food shortages, but was unlikely to remedy the country's underlying impoverishment.

Albert Musarurwa, Chairperson of the Zimbabwe Human Rights NGO Forum, commented, "If South Africa does indeed have the capacity to help Zimbabwe, it will only be a short-term solution. We, as civil society, would like to be part of any agreement between the two countries, in order to monitor just how the money is spent." He cited alleged rampant government corruption as the main reason for concern.

Musarurwa stressed that South Africa should turn up the pressure on the government to end a controversial 'cleanup' campaign, that has displaced an estimated 375,000 people.

It was reported that South Africa's deputy president Phumzile Mlambo-Ngcuka, who visited Harare, last Tuesday, refused to bail out Zimbabwe unless Mugabe stopped the demolition of illegal settlements - home to the country's urban poor.

Chris Maroleng of the Pretoria-based Institute of Security Studies underscored the importance of "strict benchmarks and exact timelines" in the agreement, which he said should include easing up on the opposition, the press and the NGO community.

"If South Africa misses this opportunity we are unlikely to see any concrete changes until 2008 [when Zimbabwe's next presidential poll is due]. Mbeki can contribute to change, but his government has to be firmer," John Makumbe, a senior political science lecturer at the University of Zimbabwe, told IRIN.

IRIN was unable to get comment from the Zimbabwean government.

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