Sunday, September 6, 2009

IMF Loan to Zimbabwe Sparks (More) Fighting

The International Monetary Fund (IMF) threw Zimbabwe a lifeline last week when they approved a half-billion dollar loan to prop up the African country's crippled economy. Officials within Zimbabwe's unity government hope that this could be a sign that the international aid community is once again willing to open their wallets to the southern African country. The IMF halted their aid to Zimbabwe in 2002 to protest President Robert Mugabe's slow slide into dictatorship.

Of course nothing ever happens in Zimbabwe these days without political infighting between Pres. Mugabe's side and that of Prime Minister Morgan Tsvangirai. The Prime Minister's MDC party is trying to keep the IMF funds out of the hands of Gideon Gono, governor of Zimbabwe's Reserve Bank and a member of Mugabe's ZANU-PF party. The MDC blames Gono for economic policies that resulted in the worst inflation rate the world has ever seen - remember this picture from January of the Zimbabwean $500 billion bill?

The MDC also worries that Gono could use the economic power the IMF funds give him to further undermine the power-sharing government and boost the fortunes of Pres. Mugabe.

It's estimated by international financial experts that Zimbabwe would need at least $10 billion to rebuild its shattered economy - assuming that $10 billion was actually used for financial reconstruction and not skimmed off by the political elite. IMF loan aside, most foreign governments are still not ready to start sending aid directly to the Zimbabwean government until more reforms take place.
Sphere: Related Content

No comments: