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Zimbabwe could face expulsion from IMF
Mail & Guardian (SA)
November 23, 2006

http://www.mg.co.za/articlepage.aspx?area=/breaking_news/breaking_news__business/&articleid=290828

An International Monetary Fund (IMF) team will visit Harare next month for an assessment mission that could lead to the expulsion of debt-ridden Zimbabwe from the global lending body, officials said on Wednesday.

Although no exact date has been set, officials said that a delegation will embark on a visit early next month.

"The IMF delegation will be in Zimbabwe in early December," International Monetary Fund press officer Gita Bhatt told the media.

An official at Zimbabwe's central bank, speaking on condition of anonymity, said the team was expected on December 5 for an 11-day assignment.

The fund's mission comes after the World Bank's lending arm demanded that President Robert Mugabe's government take strict measures to put the blighted economy of the former regional breadbasket back on the rails.

Zimbabwe, which narrowly averted expulsion from the IMF last September for debt arrears of $295-million through a surprise payment of $120-million, still owes the international lender $125-million, Bhatt said.

The delegation will compile a report to be used by the IMF board to decide Harare's fate when it meets in Washington in February to review the overdue debt payments.

Zimbabwe is labouring under record inflation of more than 1 000%, spiralling unemployment and an acute shortage of food and essential goods blamed partly on controversial land reforms launched by the state.

If expelled, Zimbabwe would become only the second country after the former Czechoslovakia to be kicked out from the IMF for debt arrears.

Zimbabwe tried to wangle a bail-out loan from its powerful neighbour South Africa, the continent's economic powerhouse, but it never materialised since Pretoria hinted that Harare would have to undertake political reforms.

The IMF, meanwhile, last year probed the surprise payback of part of the loan arrears dating back to 2001 despite Zimbabwe's central bank Governor Gideon Gono's claims that it came from "free funds" and export earnings.

Given the country's dire economic straits, the payment prompted speculation and suspicion as to its source, with economists adding that Zimbabwe could ill-afford afford to spare hard currency due to its current crippling shortage.

Independent economist James Johwa said the IMF team would not see any change in the economic scenario.

"Almost all the sectors of the economy are not performing. The problems can be traced back to the land-reform programme, which caused a major dislocation of linkages [that] were there in the economy."

Earlier this month, a senior IMF official described Zimbabwe as a dark spot in sub-Saharan Africa, which is otherwise set for higher economic growth next year.

Godfrey Chikowore, a lecturer at the University of Zimbabwe, said Harare was in the doghouse with the IMF as Western nations were pressuring it to punish Harare for seizing white-owned farms and giving them out to landless blacks.

"The Bretton Woods institutions are being used by the great powers to arm-twist smaller nations whose development policies may not be consistent with the neo-liberal paradigm," he said.

"This is where, actually, the discontented relationship of Zimbabwe and the IMF emanates."

Zimbabwe's fast-track land reforms, which saw the often violent seizure of about 4 000 white-owned farms, led to a slump in agricultural output as many of the new beneficiaries lacked the skills and equipment to farm. -- Sapa-AFP

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