Two Steps Backwards For Zimbabwe
And Why the IMF Can't Help
On September 30, the International Monetary Fund (IMF) completed the second stage of its review of Zimbabwe’s progress toward economic reform. Zimbabwean President Robert Mugabe, whose rule since 1980 has been defined by widespread fear, economic ruin, and anti-Western bombast, and who for more than a decade has refused to repay Zimbabwe’s debts, is now hoping to normalize the country’s relationship with its creditors.
Zimbabwe’s new campaign to resolve its $9 billion debt problem is perhaps a positive sign. After all these years, Mugabe could finally be willing to fulfill his country’s obligations and reengage with the international community. At least that’s how the IMF, the World Bank, and the African Development Bank are interpreting Mugabe’s latest moves, and they are reportedly proceeding with a debt arrears clearance plan for the government. But Mugabe’s proposed plan seems more of a mix of accounting maneuvers and new credits than a genuine commitment to reform. More important, debt forgiveness would be merely a warm-up act for what Mugabe truly desires: new loans for his bankrupt government.
Zimbabwe’s main international creditors, including the multilateral development banks and major governments such as the United Kingdom, are anxious to reengage with Harare. And it is true that the international community will play a crucial role in helping Zimbabwe to eventually recover.
Yet now is precisely the wrong time to embrace Mugabe and his coterie, who for 35 years have done little but devastate the country and enrich themselves. While incomes have been rising rapidly across most of the continent, Zimbabweans are poorer today than they were a generation ago. Although the Mugabe government has taken a few token steps to comply with the IMF, his government’s economic policy and human rights and governance records have not fundamentally improved. In fact, on many measures, Zimbabwe’s situation is worsening. Significant lending before the regime has taken genuine steps toward much-needed reform would be premature and entirely counterproductive.
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