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Hot seat interview with Finance Minister Tendai Biti
Violet Gonda, SW Radio Africa
May 01, 2009

http://www.swradioafrica.com/pages/hotseat040509.htm

Gonda: My guest on the Hot Seat programme is Finance Minister, Tendai Biti who stopped over in London recently to meet UK officials on his way back from a US fundraising trip. This was the first time US and UK government officials have directly engaged with a Zimbabwean government minister for some years. I asked him to tell us about the purpose of his visit and whether his trip was successful.

Biti: The trip was a routine annual meeting of the World Bank and IMF. They are called the Spring Meeting, so these are routine international meetings that I attended. And as Finance Minister I am a governor on the IMF board, so I am obliged to attend. So that was the first aspect - the technical institutional obligation to attend those meetings.

The second level of the meeting was of course interaction with SADC Ministers of Finance who are also governors of the IMF. So the issue there was to ensure that we dealt with our SADC issues, in particular the issue of pledges - in particular the issue of the resolution of SADC made at Lozitha Palace in Swaziland on 29th March 2009.

The third aspect of the meeting was re-engagement with the American government. It's been a very, very long time since a government minister from Zimbabwe re-engaged with the American government. The American establishment is basically: there are three parts, first is the State Department which are the bureaucrats; second is the Presidential office, the National Security Council and the third is the Hill, congress people and senators.

Then lastly engagement with the broad international community that was there - Finance Ministers and Development Ministers from Europe, from South East Asia, from India and so forth. So those were the different components of this trip and I am very, very pleased with the work we did at a technical level with the IMF and the World Bank. I'm very, very pleased with the understandings we will have on funding with the World Bank and I'm extremely pleased with the meetings with the administration and the people at the Hill.

And lastly as you know I've also passed through the United Kingdom where I met Lord Malloch-Brown, the Minister for Africa and David Milliband, the Secretary for International Relations and again the message has been the same, that they will re-engage and that there will be support for Zimbabwe. So yes, the meeting and the visit has been extremely successful.

Gonda: Right. I understand that at the IMF it was agreed that a multi-donor trust fund will be set up. Now can you tell us how this will be set up or how this will operate and what this is about?

Biti: The IMF has nothing to do with the multi-donor trust fund. The multi-donor trust fund will be set up between the government of Zimbabwe , the World Bank, the African Development Corporation and the UNDP. So the UNDP, the World Bank and African Development Bank will form the trinity that will receive funds from donor funding into Zimbabwe with us being part of that, particularly on the demand side - that is the distribution side.

This vehicle is essential because the donor community has not yet re-established trust with the transitional government. And the loss of that trust arise primarily from the abuse that it has suffered in the past, in particular the rape of the economy that was conducted by the Reserve Bank, the loss of systems and the invasion of accounts that was done by the Reserve Bank in the economy. So until such time we have restored trust and confidence the multi-donor trust fund will be the vehicle in respect of funding.

As I said, that is going to be set up, hopefully in the next two weeks in Zimbabwe and it is important that we have the buy in of the UNDP, of the African Development Bank and the World Bank. It's all a reflection of the fact that slowly but surely there is a bright light of confidence into this economy and into this construction.

Gonda: So how much money are you expecting from this fund?

Biti: The fund is a vehicle; the fund is a vehicle of receiving money. There are a number of, you need to unpack what will happen. First you've got donations and pledges from the SADC region, those will not go into the multi-donor trust fund, those will come directly to the Zimbabwean government. And in the case of lines of credit, those will go to the different countries respective their bank, for instance in South Africa, for instance in Botswana and Mozambique and our industry, our producers, our banks will then access those funds. Then you've got countries like the OECD countries, like the United Kingdom, like the United States of America, they will operate at two levels.

Firstly is how they've always operated in the past, namely the giving of funds and assistance to the humanitarian, for humanitarian assistance through the UNDP. Then you've got what is now known as humanitarian plus-plus in respect of which, humanitarian assistance is now creatively redefined and the multi-donor trust fund will receive this money. In addition they will also provide the funds on the basis of a project matrix, in other words they will choose a particular project to fund, for instance let's just take water and chemical treatment, let's just take electricity. So what will then happen is those monies will come specifically for a particular institutional or infrastructural project and it will be handled either at embassy level or at some bi-lateral instrument that we will create with the particular funder.

Then you have beyond the humanitarian plus-plus you'll have amounts for specific budgetary assistance which again will be channelled at bi-lateral level. Then you've got those countries that have expressed an eagerness, particularly the Nordic countries, to actually help us with a certain specific aspect of our budget and this is where the multi-donor trust fund will be important.

You ask me how much money we are expecting in this fund, whatever money we can get will be important. There are two things - what money have I been promised and what money do I expect. You need to get this economy to where it was in 1996, you need about US$45 billion in the next five years and obviously within the context of the global economic downturn, you're not going to get that money. The short term emergency recovery programme that we have launched requires US$10 billion to support it but obviously again those are huge amounts within the current context.

However, the pledges that we've obtained and the undertakings that we have obtained we should be OK for 2009. That means that we should not have a budget deficit in 2009 and I'm in fact hoping that we might actually have a budget surplus. And for your information, our budget for 2009 is the sum of US$1 billion.

Gonda: At what particular point do you actually envisage your ministry, or the government taking complete control of this trust fund for example? When will they give Zimbabwe direct funds?

Biti: Some governments are going to do that. It's a question of confidence and trust. There are a number of things we have to do to establish our own track of credibility, we need to show our own road map of credibility and it is important that we attend to the toxic issues around the Global Political Agreement - the unfinished business of the Global Political Agreement in particular the issue of ambassadors, the issue of permanent secretaries, the issue of provincial governors, the issue of Gono and the issue of Tomana. These are not negotiable, they have to be resolved.

Then at institutional level, as Ministry of Finance, we have to reform our accounting system, our public finance management system. It is important that we get this on the ground, it is important that we have the correct software. As you know, our public finance management system had been vandalised by the use of zeros. No system can take 12 zeros or 24 zeros so that was the challenge, so reform of the public finance management system is critical.

The second thing is the reform and credibility of the Reserve Bank. As you know the Reserve Bank had become a predator in our economy and we have to rationalise it and make it a decent institution in our economy. The third thing is of course the Zimbabwe Revenue Authority. Again we have to improve on our tax administration, we have to improve on our tax structure. In short, let us show that we are bankable, and I've no doubt that normalcy will be restored and in my own view I've no doubt that even with these countries, these western countries that are still so cautious for obvious reasons, I'm quite sure that by July/August, we will have shown them that the new dispensation can be trusted and the new dispensation can be worked with.

And remember, the multi-donor trust fund, we will direct it as the Ministry of Finance - so that on its own will show a credibility track and I need to say that even the funds that we are getting from our friends in the region, they are insisting that they have to be used for a particular purpose because in the past there has been abuse. There are question marks over the 300 million rand that was given by South Africa to Zimbabwe in November of last year and you know what happened to the US$7 million that was donated by the Global Fund last year.

So there's been a lot of atrocities that have been committed in terms of accounting, in terms of transparency and unfortunately we are victims of history, we are being judged on past omissions and commissions. We have to show our own clean slate and our own track record of credibility, our own regiment of honesty and transparency and I can assure you we will not be found wanting.

Gonda: Tendai you mentioned the issue about re-engaging with the Americans again after a very long time, now the State Department issued a rather sad statement saying they have not seen the reforms that they actually want. Given the fact that you don't have control as the MDC, you don't have control of Defence, and only have partial control of the police force and also considering that you've not fully implemented the GPA as you mentioned earlier and struggling to get basic things you've agreed on - in terms of the Global Political Agreement - how does this affect the United States' perception of your position as an equal partner in government and how does it relate to the lifting of ZIDERA?

Biti: Well I actually had excellent meetings on both fronts in terms of re-engagement. The concerns are there and you can't run away from the concerns and the concerns are simply two-fold. Firstly we have been abused by this country called Zimbabwe . There's been dictatorship in Zimbabwe and there's been no playing according to the rules of the international community. How do we trust and how do we guarantee that the interim government is a basic ruse to get pressure off a regime that is bent and intent on proceeding and working on its own terms? How do we ensure that you are not just junior partners that are being used to sanitise a regime? And those are genuine questions. You have to understand that.

Secondly there is a genuine concern how do we guarantee that whatever money we put in goes to prop up the pillars of dictatorship and more importantly don't reach the intended purposes? Those things are things you can't wash away and the proof of the pudding is in the eating. You have to demonstrate that there has been a recalibration of mentality. You have to show that there's been a fundamental paradigm shift and you can only show there's been a paradigm shift, by action and performance.

And so it doesn't help dealing with those perception drivers if you are still invading farms. It doesn't help in dealing with those perception drivers if Roy Bennett is not being sworn in. It doesn't help in dealing with those perception issues if Gandhi Mudzingwa and Christopher Dhlamini are still in prison. It doesn't help in dealing with those re-branding issues, those devaluing issues if you've not resolved the Global Political Agreement, outstanding issues in the Global Political Agreement.

So the long and short of it we have to be honest with ourselves. No-one out there owes us anything. We want re-integration in the international community but no-one out there owes us anything. We don't have an overdraft facility with anyone out there so we have to show that we are a bankable project and some of us we have put our reputation and credibility on the line here and I hope that other colleagues in this government also have to re-calibrate their mental mind set and we can take this country out of the doldrums that it is in.

Gonda: So do you have any idea what the stumbling block is and what the progress is in terms of the talks and the issues that you have highlighted - the issues of the permanent secretaries, Roy Bennett and other issues that were agreed on when the government was formed but have not been implemented yet?

Biti: Well the honest, the truth of the matter is that there's been no decent progress to date and we are running out of excuses because this government is now over two months old and so everyone needs to come to his senses and let's tell each other the truth. Are we interested in making this work or not? Some of us are and that's why we are still in it but we should not be taken for a ride by other people with their own ulterior motives. So in short, we have to put our foot on the ground and make sure we resolve these issues once and for all. You cannot have a situation where some of us are working day in day out to try and undo the legacy of insanity of the last decade and others are busy rebuilding the foundations of that insanity. It's not fair to us as individuals and it's not fair to Zimbabweans.

Gonda: Tendai, just going back to the issue of the Zimbabwe Democracy and Economic ... (interrupted)

Biti: Violet on ZIDERA I actually met both Senator Feingold whom you know was one of the authors of these bills. I also met Congressman Payne who was also involved in ZIDERA. I also met others like Luger and Herman - people who mothered and gave paternity to this ZIDERA and I made it very clear that it would be very difficult for us to move when ZIDERA is there.

And if you consider for instance the World Bank has right now billions and billions of dollars that we have to access but we can't access those dollars unless we have dealt with and normalise our relations with IMF. We cannot normalise our relations with IMF because of the voting power, it's a blocking voting power of America and people who represent America on that board cannot vote differently because of ZIDERA, so it is critical.

I think they listened to us, we made our case and I've no doubt that on balance they understood that this act has to go but they also made the point very clearly that you have to strengthen us when we persuade our colleagues who don't have the information that I've just given them. And strengthening those people who want to help us in removing ZIDERA we have to deal with the toxic issues that I've referred to above - the issues of the violence on the farms, the issues of - all the toxicity issues that I've referred to you about.

Gonda: That was Finance Minister Tendai Biti speaking to us from Heathrow Airport on his way back to Zimbabwe . (We will bring you PART 2 as soon as possible).

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