Zimbabwe Social Democrats call on European Investment Bank to cancel indirect loans to Mugabe regime
Press Released Sunday 15 June 2014.
According to recent reports, the European Investment Bank (EIB) is considering extending loans to Zimbabwe’s private sector but not to the Zimbabwe government. Whilst this is would be welcome news under normal circumstance this is not so in Zimbabwe’s present situation.
Zimbabwe’s private sector, like the public sector and the nation at large, is suffering greatly because of the serious economic meltdown brought on following decades of economic mismanagement and corruption. The Mugabe regime has stubbornly refused to implement meaningful political and economic reforms necessary for economic recovery.
The EIB loans to the private sector will help them paid they ballooning electricity bills, for example. This will not encourage the power utility company, ZESA, and the regime controlling and running it to address the underlying causes of the soaring cost of energy – mismanagement and corruption. In other words the loans will ultimately go to subsidise the mismanagement and corruption.
It is not just European Union that has stopped giving the Zimbabwe regime any form of financial assistance, other nations have stopped too. The decision was born out of the need to pressure the regime to accept the necessary reform to stop the criminal waste of resources. EIB’s indirect loan to the regime will encourage it to believe it can continue to rule without implementing the reforms.
Whilst the European Union has put its foot down in getting some of its own member countries like Greece and Spain to implement economic reforms considered necessary for economic growth; it is disappointing to note that the EU should be undermining calls for similarly reforms in Zimbabwe.
Although the EIB funds will be given to Zimbabwe’s private sector and not the Mugabe regime; the funds will be indirect subsidies to the regime and easy pressure on it to end the mismanagement, corruption and to implement the reforms necessary to attract donors and foreign investors. Zimbabwe needs the regime to implement the reforms as a matter of great urgency; no among of foreign aid can save the private sector in the long run without first implementing the reforms!
Signed. Wilbert Mukori
Zimbabwe Social Democrats