No full US financial aid before major Zim reforms: Wharton

via No full US financial aid before major Zim reforms: Wharton – The Zimbabwe Independent November 13, 2015

THE United States (US) will not fully support Zimbabwe’s much-vaunted debt clearance strategy and extend any fresh lines of credit to Harare if it fails to implement far-reaching reforms relating to human and property rights as espoused in the Zimbabwe Democracy and Economic Recovery Act (Zidera) of 2001.

Hazel Ndebele

The US says Zidera aims to support the people of Zimbabwe in their struggle to effect peaceful, democratic change, achieve broad-based and equitable economic growth and restore rule of law. The Act is however seen by President Robert Mugabe and his cronies as a regime-change tool to dislodge the veteran leader — in office since Independence in 1980 — from power.

Outgoing US ambassador Bruce Wharton told journalists in a breakfast meeting yesterday that US President Barack Obama would shelve the sanctions-inflicting Act only if Zimbabwe makes clear progress on reforms.

Relations between Washington and Harare, which are currently thawing, turned frosty at the turn of the millennium when government embarked on a chaotic land reform programme which saw white commercial farmers losing large swathes of arable land to blacks. Government denies charges of human rights abuses during the exercise and elections, among other accusations.

Wharton said government’s full commitment to reforms would also restore Zimbabwe relations with the international community and influence international financial institutions (IFIs) to extend fresh lines of credit after nearly 20 years.

Zimbabwe, which is currently saddled with a US$10,8 billion debt overhang, is currently ineligible to access long-term finance from the World Bank, the International Monetary Fund and African Development Bank over non-payment of arrears since 1999.

“Zidera demands or instructs the US representatives in IFIs to support debt relief and new lending facilities for Zimbabwe, but at such a time the government of Zimbabwe has taken steps to respect the rule of law, property rights and respect of human rights,” said Wharton.

“Recently there was the Lima (Peru) meeting where Zimbabweans said they understood that they have to make economic reforms so senior people in government understand that power is in their hands to change the current situation.”

Last month Zimbabwe presented its debt clearance strategy to multilateral and bilateral creditors in Lima.

Government wants to clear US$1,8 billion overdue to multilateral creditors by June next year in a bid to break its vicious debt cycle, and secure at least US$2 billion in new funding from various sources to rescue the imploding economy.

On human rights issues, Wharton said government should investigate further the case of missing journalist-cum-political activist Itai Dzamara who went missing eight months ago.

“Dzamara’s case reminds people of political violence which took place in 2002 and 2008; government said this is not a unique case as people disappear all over the world but they can seek help from International Criminal Police Organisation and International Law Enforcement Agencies to investigate the matter,” he said.

On what the country can do to move from the current economic crisis, he said Zimbabwe needed to urgently work on policy reforms that can quickly and radically change the economy.

“Key reforms need to be done such as restoring economic value to land by giving farmers long term leases, or title certificates, which banks will recognise as collateral. Agriculture is a foundation for this country and if that is applied you can see a turnaround in two to three years,” he said.

He also said there is need for the country to reaffirm support for the rule of law and judicial system such that court decisions are respected in spite of who is involved. Wharton also emphasised the need for clarity on investment policies such as the indigenisation law which compels foreign-owned companies to cede at least 51% to locals.

“Clarity is needed on the indigenisation policy implementation which has remained hard to predict; the policy has a chilling effect on investors that wish to put their money into the country,” he said. He encouraged Zimbabwe to diversify its investment opportunities beyond the East for maximum yields and to reduce risks. He further encouraged US investors to invest in the Southern African nation widely seen by experts as a viable frontier market.

Zimbabwe’s Look East policy aims to expand bilateral and trade relations with the likes of China, Malaysia and Singapore to offset the economic effects of Western sanctions but has failed.