No way out of the woods yet
BEWILDERING signals of Zimbabwe’s relations with the International Monetary Fund (IMF) have again emerged from government with the usual sabre-rattling from President Mugabe and more mellow comments from the Ministry of Fina
nce and the central bank.
Mugabe, who recently authorised the payment of US$120 million towards the IMF’s US$295 million debt, saw it fit last weekend to attack the international banking institution on his arrival in Cuba. While in the warm embrace of the communist state which has promised Zimbabwe assistance in health and education, he sang the Fidel Castro refrain that the IMF was not of any help to poor countries.
It should be remembered that Cuba withdrew from membership of the fund in April 1964. The move was the culmination of a period of difficulties in Cuba’s balance of payments starting in 1959. Castro has since then not missed an opportunity to take potshots at the IMF and to rally other Third World countries to break ranks with the “ruinous institution”.
He has called it the “executioner which pulls the string so that the guillotine’s blade falls on the heads of Third World nations”.
To blend in with his surroundings, Mugabe did not disappoint.
“We have never been friends of the IMF and we shall never be friends of the IMF,” Mugabe warbled on arrival in Cuba on Saturday. “The IMF is never of real assistance to developing countries. It is wielded by the big powers. It is the big powers which dictate what it should do.”
But his Finance minister Herbert Murerwa and central bank governor Gideon Gono were meanwhile working feverishly to ensure that Zimbabwe is not expelled from the fund. Gono justified the payment of US$120 million saying it was “ important as a matter of national pride, dignity, security and survival to sacrifice present comforts in fulfilment of wider global obligations”.
Murerwa also expressed optimism after the decision to spare Zimbabwe from expulsion.
“I am happy Zimbabwe has been given another lifeline,” he said. “We will look at ways in the next few months to cut down on more of our debts and patch up our relationship with the IMF.”
While Mugabe believes that Zimbabwe “shall never be friends” with the IMF, his Finance minister sees hope in maintaining cordial relations with the fund. He has also spoken out against price controls which Mugabe is known to favour.
While Gono pleaded with the IMF not to “take precipitous actions (to expel Zimbabwe) whose effect is to blunt or negate the turnaround efforts currently underway ”, Mugabe sees the IMF as a hostile construct of the capitalist order.
Put simply, the IMF is a key facet of Gono’s so-called turnaround programme but features very differently in President Mugabe’s Fidelist mindset. He already has many converts in the higher echelons of the party who subscribe to his belligerent views on the World Bank and the IMF.
Therein lies the tragedy of Zimbabwe’s quest for economic recovery. Policy contradictions in the handling of the economy within the Zanu PF government have ensured nothing tangible is achieved. Murerwa and Gono seem condemned to the same fate as Makoni, Chambati and Chidzero.
Not that much will be achieved anyway by the payment of the US$120 million to the IMF as Zimbabwe can still not access any balance of payments support as it is still suspended.
Murerwa and Gono’s run-around to normalise relations with the IMF will turn out to be a waste of time as long as Mugabe continues to second-guess his ministers and confuse the country on real government policy with regards to relations with the Bretton Woods twins.
This obscurantist mode that has become so predictable has seen the country failing to implement its own economic policies, from the Economic Structural Adjustment Programme (Esap I and II), Zimprest, the Millennium Budget, the Millennium Economic Recovery Programme, the National Economic Recovery Programme (Nerp), and the National Economic Revival Programme (Nerp) to the expansively titled Towards Sustained Economic Growth — Macro-economic Framework, 2005-6.
There is a long history of half-heartedness by Mugabe’s government in drawing up and executing turnaround programmes. It gets worse when the presidential coach and horses drives through fragile foundations.
Business leaders at the Confederation of Zimbabwe Industries congress last week heard of the co-operation and consultation between Business Unit South Africa and President Thabo Mbeki’s government on economic issues. That remains a pipe-dream here where government thinks co-operation with social partners and the international community is a global conspiracy to evict the incumbent.
If President Mugabe is serious about turning this economy around, he must lead the charge to demonstrate willingness to adopt a cooperative approach to international financial relations.