via Chinamasa’s letter to IMF 28 November 2014
November 3, 2014
Ms Christine Lagarde,
Managing Director
International Monetary Fund
Washington, DC 20431
Dear Ms Lagarde,
THE first and second reviews of our Staff-Monitored Programme (SMP) were approved by Fund Management in June 2014. The SMP is Zimbabwe’s first programme engagement with IMF staff in more than a decade.
The SMP played a pivotal role in setting the stage for a more stable macroeconomic environment and for rebalancing gradually the economy toward fostering private sector-led growth.
Following delays in the initial implementation, related to the fact that 2013 was an election year, we succeeded in bringing the programme back on track.
Moreover, we have taken steps to strengthen the financial sector, and have made progress in increasing diamond revenue transparency.
As a result, we have met all quantitative targets and structural benchmarks for the third review. We are grateful to the IMF for its continued support of our economic reform programme and technical assistance.
The government has also stepped up its efforts to reach out to a broader set of stakeholders. In September 2014, we held a workshop with development partners, private sector representatives and NGOs to prioritise projects and programmes under our economic blueprint for the next five years, October 2013 to December 2018.
ZimAsset aims to achieve sustainable development and social equity, propelled by the country’s abundant human and natural resources.
As part of ZimAsset, we also intend to accelerate our re-engagement on debt resolution with all our creditors, including the international financial institutions. We also plan to host a second international debt resolution forum sometime in November 2014, to build consensus on the process for resolving Zimbabwe’s debt challenge.
Zimbabwe urgently requires a substantial amount of inflows of fresh capital to help the economy to recover. Against this background, we hereby request completion of the third review (now approved) and continued fund staff support under a successor 15-month SMP.
The new SMP (October 2014–December 2015) will provide a coherent macroeconomic framework that will support our efforts to maintain macroeconomic stability, promote inclusive growth, address weaknesses in the financial sector, improve the external position and lay the foundation to build our capacity to repay our outstanding debt.
We consider that a successor SMP will be instrumental in building on the achievements already made and tackling the economic challenges Zimbabwe faces. It will also, in our view, be an important step on the path toward normalizing relations with our creditors and the fund’s financial support.
The attached Memorandum of Economic and Financial Policies (MEFP) outlines our macroeconomic objectives for 2014-15 and provides specific measures to achieve them.
We are committed to the objectives of our programme recognising that completion of reviews under the SMP is subject to observance of quantitative targets and structural benchmarks. The government believes that the policies set out in the attached MEFP are adequate to achieve the objectives of the SMP, but stands ready to take additional measures.
Furthermore, the Government of Zimbabwe will consult with the IMF staff in advance of any revisions to the policies contained in the MEFP, in accordance with the IMF’s policies on such consultations, at the initiative of the government or the IMF staff.
COMMENTS
To be true, I have not read the subject article of this thread. I couldn’t find enough time. However, I listened on radio to the man Patrick Chinamasa addressing an obliging crowd. I switched on when some clever guy (Possibly a Permanent Secretary, poor guy) came up with a Government Revenue as a percentage of GDP as a metric for taxation levels in a country. Ours is around 30%, he said, the highest in the region (Zambia, twice our GDP, at about 20%). That meant we had no further room for taxation, in a normal economy. Chinamasa loved the perspective, which was fine, as he is an intelligent guy who unfortunately finds himself having to lick ass for his rescue by Mugabe from as-yet obscure past crimes, but which I am convinced exist.
Anyway, he proceeded to give a fireside talk about having met a female IMF official who realised, no doubt with his articulate persuasion, that Zimbabwe had a resilient economy, and (he told her) that the $6 billion debt that spooked the IMF and foreign investors was peanuts compared to such economic muscularity. So, he went on, WE could turn this economy around if only we could get some slack. The obliging audience chuckled, much to his pleasure.
But what did it take, I wondered, to kill such a resilient economy, if not resilient incompetence? The irony was is how Chinamasa seemed to think that a resilient economy could be equated to the capability of the morons that ran it into the ground. I asked my wife if the audience had any clue what they were chuckling about – the foolishness of the IMF or the dim wit of the speaker?
Somewhere in the self-important talk he attacked the private sector for failing to get foreign direct investment (which he called, importantly, “FDI”). His job was to get Loans, he pleaded! Believe me, I recorded this comedy and I know what I heard. Whether he knew that the failure by the private sector to get FDI was due to his government failing to respect property and human rights, is something that all normal Zimbabweans can easily answer, including himself. But there we are, 34 years parrying with Mugabe’s make-believe scenarios and self-righteousness intellectual masturbation.