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IMF
Executive Board considers Zimbabwe's arrears to the fund
International
Monetary Fund (IMF)
February 23, 2007
The Executive
Board of the International Monetary Fund (IMF) met today to consider
issues related to Zimbabwe's outstanding arrears to the Poverty
Reduction and Growth Facility-Exogenous Shocks Facility (PRGF-ESF)
Trust. The Board also considered the sanctions, including the suspension
of voting and related rights, that had been imposed on Zimbabwe
with respect to its arrears to the IMF's General Resources Account
(GRA), which were settled in full in February 2006 (see Press Releases
No.
06/33 and No.
06/45).
With regard
to Zimbabwe's outstanding arrears to the PRGF-ESF Trust, the Board
expressed deep concern over the deteriorating economic and social
conditions and regretted that the authorities have not undertaken
the policies recommended by the IMF. The Board also noted that Zimbabwe's
payments towards settlement of its PRGF-ESF arrears have been minimal
and that its arrears to the Trust have further increased. The Board
urged the authorities to decisively address the ongoing economic
crisis by immediately implementing a comprehensive stabilization
package comprising several mutually reinforcing actions centered
on fiscal tightening (including transferring the quasi-fiscal activities
carried out by the Reserve Bank of Zimbabwe to the budget) and price
and exchange regime liberalization. The Board also called for fundamental
structural reforms, including public enterprise and civil service
reforms, strengthened property rights and improvements in governance.
In light of
Zimbabwe's deteriorating policy performance and payments to the
IMF, the Board kept in place the decisions previously taken to address
Zimbabwe's arrears to the PRGF-ESF Trust—the declaration of noncooperation,
the suspension of technical assistance, and the removal of Zimbabwe
from the list of PRGF-ESF-eligible countries. The Board urged Zimbabwe
to resolve its remaining arrears to the PRGF-ESF Trust promptly,
and agreed that it will again consider Zimbabwe's arrears to the
Trust in six months.
Zimbabwe has
been in continuous arrears to the IMF since February 2001 and is
the only case of protracted arrears to the PRGF-ESF Trust, which
currently amount to SDR 86 million (about US$129 million).
With respect
to the suspension of Zimbabwe's voting and related rights, the Board
made no decision and agreed to return to the issue at a later date.
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