Biti lobbies to restore Zim’s IMF voting rights

FINANCE minister Tendai Biti is in Washington lobbying the International Monetary Fund (IMF) to restore the country’s voting rights and offer lines of credit.

The IMF suspended Zimbabwe’s voting rights in June 2003 after the country’s economy deteriorated and government fell behind on debt repayments.

The multilateral financial institution said the country would only regain the voting rights as well as financial and technical help if it cleared its arrears and implemented sound economic policies.

Zimbabwe owes the IMF US$139 million under the Poverty Reduction Growth Facility – Exogenous Shock Facility.

Biti, sources in government said, left the country early this week for Washington and  was upbeat that the voting rights would be restored.

Voting rights in the IMF are based on countries’ quotas, the amount of foreign exchange reserves that they have deposited in the fund.

Biti’s Washington visit came a few days after US ambassador to Zimbabwe, Charles Ray, said his government would support a motion to restore Zimbabwe’s voting rights in the IMF when the board of the multilateral lending institution next meets.

“We would want to assure Zimbabwe that once the issue of restoring Zimbabwe’s voting rights in the IMF is put forward for debate at the next IMF sitting, America will fully support the motion,” Ray was quoted in the media saying.

Biti hinted during the 2010 National Budget that the budget deficit of about US$480 million would be financed by the international community as major sectors of the economy were still to recover.

Biti said Zimbabwe needed the help of the international community to complement efforts made to reign in inflation, lower the unemployment rate and democratise the country’s political system.

Speaking at a press club in Washington on Wednesday, Biti said 2009 closed a decade of political, economic and social turmoil in Zimbabwe and that the country needed help from the international community to sustain the progress it has made to date.

“The only way you can have democracy and real change in difficult places such as Zimbabwe is if government itself is able to deliver,” Biti was quoted by the international media saying. “But delivery requires resources, and we don’t have the resources.  Therefore, engagement becomes essential,”

He said this engagement needed to come from the international community, and the country could not recover without clearing its US$6 billion debt to various financial institutions worldwide.

“We need to transform the Zimbabwean economy,” said Biti. “We need to modernise the Zimbabwean economy.  But we cannot do that without a fund of at least US$8 billion and therefore, we are appealing for a modern-day George Marshall.”

He was referring to the man who formulated the plan for the rebuilding of Europe after WWII, known as the Marshall Plan. Biti said Zimbabwe was calling on its creditors to eliminate the money it owes them.

If the debt could be erased, Biti said, his country’s political, economic and social prospects would continue to improve rapidly.

The finance minister said improvements implemented last year helped to open a new chapter for Zimbabwe.  Adding that after 12 years of shrinking, Zimbabwe’s economy grew by about 4% in 2009.

Biti said on average, inflation for the year was negative.  He also noted market capitalisation of Zimbabwe’s stock exchange was more than US$4 billion, and its returns made it the most competitive bourse in Africa.

 

Paul Nyakazeya

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