AS we report elsewhere in this edition, a delegation from the International Monetary Fund (IMF) is expected in Harare next week to monitor Zimbabwe’s progress on the Staff Monitoring Programme (SMP).
The Zimbabwe Independent Editorial
The SMP was approved by the IMF management in June last year for the period April-December 2013. After the general elections last July, Finance minister Patrick Chinamasa asked for an extension of the programme.
At the authorities’ request, IMF management approved a six-month extension of the programme to allow time for government to strengthen its policies and deliver on outstanding commitments.
During the October 2013 annual meetings of the IMF and the World Bank, the new Zanu PF government reiterated its commitment to the SMP and re-engagement with the IMF and other multilateral institutions.
This is progressive, we must say. For the first time in a long time, government is showing authorities are somehow now thinking on some issues. Of course, the question however remains sincerity and sustainability.
Authorities must remain engaged to puck the country out of isolation. Zimbabwe needs allies around the world more than successful countries need it. So this requires that government leaders and policymakers must stop thinking in Cold War terms.
They must rebuild bridges with the West and consolidate relations with the East. The matrices of global relations and investment are such that there is no more room for myopic ideological preferences and thinking inside the box when it comes to the economy.China is the best example.
The country needs to mend relations with the European Union and United States — major trading blocs in the world — to move out of isolation going forward.We need pragmatism, not woolgathering. Whatever the ideological preferences authorities might have, the reality is Zimbabwe still does significant business with the EU, including Britain, and the US, as well as countries like Canada and Australia. While trade with China has boomed over the years, the EU and US particularly are still critical trading partners to Zimbabwe.
Brics countries — Brazil, Russia, India, China and South Africa — are important, but Zimbabwe needs investment from all over the world, not from certain blocs only as the failed “Look East” policy shows.
Even if the SMP — Zimbabwe’s first IMF agreement in more than a decade — does not entail financial assistance or endorsement by the Bretton Woods institution, a successful implementation of the programme would be an important stepping stone towards re-engagement with the international community.
The SMP will help deal with such issues as putting public finances on a sustainable course, while protecting infrastructure investment and priority social spending. It will strengthen public financial management, increase diamond revenues transparency, reduce financial sector vulnerabilities and expedite reforms. That’s what is partly needed for Zimbabwe to get out of the woods.