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IMF boss leaving Zimbabwe after rocky stint

Staff Writer

THE International Monetary Fund (IMF)’s senior resident representative Gerry Johnson packs his bags next month to return to Washington, after a rocky stint in Zimbabwe.

Relations between Zimbabwe and the Bretton Woods Institutions – the IMF and World Bank – have not been rosy during his tour of duty.

In fact, they have been at an all-time low ever since President Robert Mugabe decided to embark on the fast-track land resettlement programme two years ago.

While Mugabe points out that his government was compelled to distribute tracts of land to the country’s “landless peasants” the IMF, World Bank and major international organisations including the influential European Union (EU) have blasted the way this was done.

In an interview Johnson confirmed he was leaving Zimbabwe next month.

“I can confirm that I am leaving the country next month,” he told businessdigest. “I think the announcement of who will take over from me will come from Washington as soon as I get there. Right now I do not know who will replace me. I have enjoyed my stay here and learnt a lot.”

Under IMF protocol Johnson cannot openly express his feelings about the situation on the ground in the country but can refer to Article IV Consultations concluded with Zimbabwe.

Insiders however, say the IMF might not replace Johnson because of the prevailing political and economic situation.

The IMF on June 6 suspended Zimbabwe’s voting and related rights after having determined that the country had not sufficiently strengthened its cooperation with the Fund in areas of policy implementation and payments.

Johnson refused to comment on this.

The last IMF Article IV Consultation report on Zimbabwe made shocking reading and riled government so much that Mugabe told his high-ranking officials to ignore the IMF and World Bank and concentrate on countries in the Far East for economic aid and advice.

Mugabe openly said his government had dumped the Bretton Woods institutions because they were the major culprits bringing “untold economic suffering” to the nation.

Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year.

A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the executive board.

At the conclusion of the discussion, the managing director, as chairman of the board, summarises the views of executive directors, and this summary is transmitted to the country’s authorities.

On June 6 the IMF report on Zimbabwe resembled the script of a horror movie.

It pointed out that the economic crisis reflected to a large extent “inappropriate economic policies: loose fiscal and monetary policies, the maintenance of a fixed exchange rate in an environment of rising inflation, and administrative controls”.

The IMF said increased regulations and government intervention had driven economic activity underground and contributed to the chronic shortages of goods and foreign exchange.

“The impact of these policies have been exacerbated by the fast-track land reform programme, recurring droughts, and the HIV/Aids pandemic,” the IMF report said. “Meanwhile, investor confidence has been eroded by concerns over political developments, weak governance and corruption, problems related to the implementation of the government’s land reform programme, the push for an increased indigenisation of the business sector, and the selective enforcement of regulations.”

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