Chinamasa gets reality check in the US

via Chinamasa gets reality check in the US – The Zimbabwe Independent May 8, 2015

FINANCE minister Patrick Chinamasa recently came back from the International Monetary Fund and World Bank 2015 spring meetings with the sobering realisation that Zimbabwe has a long way to ensure debt rescheduling or debt relief.Owen Gagare
Informed diplomatic sources said this week the minister got a reality check during the meetings to discuss the global economy and financial situation in Washington D.C. Chinamasa held meetings with officials from multilateral lending institutions and donors in a bid to build consensus among creditors and development partners on ways to address Zimbabwe’s debt arrears and new funding issues.
Zimbabwe, grappling with a severe liquidity crunch, has an external debt and outstanding arrears of about US$10 billion.
The huge debt has made it difficult for the country to attract new finance from the private sector or attract funds from multilateral institutions and donor countries, hence government’s decision to engage creditors for relief.
Multilateral institutions and donor countries have, however, demanded that the country embarks on a raft of economic and political reforms before entertaining any hopes of attracting new funds.
Diplomatic sources in the European Union (EU) told the Zimbabwe Independent this week Chinamasa, who is playing a prominent role in government’s re-engagement programme with multilateral institutions and western countries, held a number of bilateral meetings with Zimbabwe’s creditors in Washington D.C as he pushed for funds while trying to convince them that the country was committed to reforms.
“It was clear that Chinamasa and some officials are trying their utmost best and are committed to reforms. There are, however, serious doubts on the commitment of other senior government officials and this proved to be a stumbling block for Chinamasa,” said a senior diplomat.
“It is a pity that while Zimbabwe is engaging, many things of concern are still occurring in the country. These include the lack of respect for property rights. The country is still experiencing disturbances on farms and the disturbances are not limited to white farmers alone.”
The diplomat added that court orders continue to be violated. He said it was also sad that the factional fights in Zanu PF have now descended into violence like we are seeing in Hurungwe.
“We thought this (violence) was a thing of the past but it is still occurring so naturally people question the country’s commitment when such things occur,” the diplomat said.
Zimbabwe is implementing a 15-month Staff-Monitored Programme with the Bretton Woods institution, under which the country committed itself to strengthening its external position as a pre-requisite for arrears clearance, resumption of debt service and restoration of access to external financing.
The government also pledged to consolidate its fiscal position, accumulate international reserves and mobilise international support for resolving the country’s external debt situation, while also restoring confidence in the financial sector and improving public debt and financial management.
In addition, government has promised reforms to enhance the business climate, boost productivity and competitiveness as well as build confidence.
Another diplomat pointed out that on several occasions Chinamasa was asked about Itai Dzamara’s abduction during the bilateral meetings he held to push Zimbabwe’s case.
The diplomat said most Western countries were very concerned about Dzamara’s disappearance and wanted the government to show commitment in their investigations.
“It was also clear that policy inconsistency was still of concern in Zimbabwe. Chinamasa announced the scrapping of civil servants bonuses only for the President (Robert Mugabe) to publicly rebuke him while he was in Washington. It gives the sense that the government is not pulling in the same direction,” the diplomat said.
The diplomats also said they were aware that Zimbabwe had no capacity to settle its debts, despite making token payments to the IMF and other creditors such as the African Development bank.
They, however, said it was impossible for the debt to be rescheduled or for Zimbabwe to get debt relief, allowing the country to attract new funding when those in leadership were still not yet fully demonstrating their commitment to reform and change.
“But at the same time there has been an effort to make some reforms and these need to be encouraged. This is the reason why some funding has come to Zimbabwe although it is not being channelled directly to the government,” said the diplomat.
The diplomat said the funding that has come Zimbabwe’s way was in response to the progress government had made although there is consensus that the country needs to show more commitment towards reforms.
In February, Zimbabwe and the EU signed the National Indicative Programme which will see the European Union providing the country development assistance valued at US$270 million under the 11th European Development Fund.
Zimbabwe will receive funding until 2020 for projects in the sectors governance and institution building, health, and agriculture-based economic development.

COMMENTS

WORDPRESS: 5
  • comment-avatar
    Chidumbu 7 years ago

    If you hate white people so much why are you going to them with your begging bowl- oh yes I forgot you have no shame

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    Tiger Shona 7 years ago

    And that Chinamasa is a racist.

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    Iam afraid america will not give us money until it changes its hostile policy on zimbabwe.when the indeginization law was crafted it was done to be also hostile to potential western investors.it is high time these issues are resolved because the ordinary man will continue to suffer in zimbabwe.this is 3rd chimurenga guyz during the 1st and 2nd chimurenga some people died for our country some were .injured.today there are no jobs.people are suffering .a lot of people have left the country.all these are sacrifises which have to be made.it may not be us who live to see the good days which i hope will come.future generations will remember all these sacrifises just like we do on independence day .and heroes day.defence forces day.i dont condone the suffering of people today but it looks a long way before our economy gets better.i hope it will be in our life time.

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    Michael 7 years ago

    There is one thing that some people refuse to accept and that is that the sanctions had everything to do with the murder and mayhem that became institutionalized in Zimbabwe ever since 2000. The farm invasions – causing a number of farmers and their workers being murdered – started in 2000, but sanctions were only decided upon after the roguish behaviour of ZANU-PF in 2002 – when bloodshed and murder clearly was an election tactic of the ruling party.

    Murderers were either not charged for murder or pardoned by Mugabe himself when they were found guilty. The Rule of Law collapsed and property rights destroyed.

    The problem was further that through excessive bribery and corruption the country had serious financial problems and the loan money – which mostly went into the pockets of the ruling elite and was not used for the purpose it was intended – was not repaid.

    The introduction of sanctions was partly an effort to freeze the billions of dollars held in foreign bank accounts by Mugabe and his cronies. There were other than armaments – no restrictions placed on any imports and exports to and from Zimbabwe. The issue of financial restrictions must be viewed in the following context:-

    * The Western Governments had a bitter experience in the past that aid money provided by them was not utilized for the purpose intended and ended up in the pockets of Mugabe and his cronies. They also had to stop inter-government financial assistance because of breaking down in the Rule of Law, total disregard for property rights, state-sponsored murder and torture(especially before and during elections, stolen elections and other totally unacceptable practices associated with the Mugabe regime. Western donor countries cannot provide state assistance to a country where the above became the norm – the democratic processes in those countries would not allow for it to support a dictatorial regime.

    * Zimbabwe did not make the required loan and interest repayments on previous loans and it is a fact that financial institutions would not make loans to a country who does renege on loan conditions. This had nothing to do with sanctions and everything to do with the Zimbabwe Government reneging on their contractual obligations. However, it must be borne in mind that “once bitten, twice shy” remains applicable in this case and that institutionalized maladministration, bribery and corruption, as well as a deficient policy structure based on acceptable financial norms, also disqualified Zimbabwe from getting any further loans.

    * The Western Governments were worried about the plight of ordinary Zimbabweans and through non-governmental agencies provided hundreds of millions in food aid and medical and educational support services. There was in this regard absolute distrust of the Mugabe clique, who would use such aid to gain party-political advantage if they could lay their hands on it) and from proven experiences in the past that such aid programmes and the programmes would not have reached and benefited the general population in any event, because of corrupt practises associated with the Zimbabwe Government.

    The issue of sanctions was counter-productive as well. It gave the Zimbabwe Government a smokescreen to cover their own maladministration of the country – while in fact sanctions had a very little financial impact on the country.

    I am afraid the Zimbabwe Government (and not sanction) is totally to blame for the present financial problems of the country.

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    Nyoni 7 years ago

    The regime forgets that Capitalism is the mantra for all progressive countries. Even our crooks in government know this. Their idea that a country runs on empty is tantamount to suicide. ZimAsset has proved to be a failure and like all its failed policies what revenge will government meet to its citizens now.