Isolated Zimbabwe close to striking landmark deal with west
David Pilling and Andrew England Harare
There is increasing appetite among western governments, particularly in Europe, to re-engage with Harare. That is partly because of concerns about what could happen when President Robert Mugabe, 91, who has ruled since independence in 1980 and who is frail, leaves office or dies.
“There’s nothing more dangerous than a political transition with an economic implosion,” said one diplomat.
Patrick Chinamasa, finance minister, said he hoped a deal could be reached by the end of June. “This is our expectation, but it takes two to tango,” he said.
Some western officials remained cautious, saying any number of factors could scupper a complex deal which would require genuine signs of reform in Zimbabwe, a buy-in from a sceptical US and even the co-operation of Algeria, which was expected to lend the beleaguered southern African nation up to $900m to help it repay its arrears.
The IMF, whose endorsement is key to unlocking a deal, was cautiously optimistic agreement could be reached before the end of the year.
“Both Zimbabwe and the traditional donors and creditors realised that what both sides have done and tried to achieve over the last 15 years hasn’t really worked,” said Christian Beddies, the IMF representative in Harare.
Of reform efforts, including a clean-up of some debt-riddled banks, he said: “Zimbabwe is not fixed, but they have taken some important steps in the right direction.”
Payment of arrears would almost certainly be accompanied by fresh loans, something Mr Chinamasa said was essential to make a deal worthwhile.
Zimbabwe has been treated as pariah by western states since Mr Mugabe embarked on a controversial land reform programme around 2000, which saw the seizure of white-owned farms. Human rights abuses and a series of disputed elections, often accompanied by violence, worsened relations further.
Harare has been in continuous arrears with the IMF, to the tune of $110m, since 2001. In addition, it owes the World Bank nearly $1.2bn and the African Development Bank $600m.
The Zimbabwe government has been pushed to re-engage with the west by a desperate economic situation as the formal economy grinds to a virtual halt. Last year, prices fell and the economy almost certainly contracted, according to analysts.
Western officials said Mr Mugabe had tried to persuade Beijing to bail Zimbabwe out, but had been rebuffed by Xi Jinping, China’s president, who had told him to pay off arrears and mend relations with the west.
Mr Chinamasa said: “For recovery, we need to re-enter the global economy. We are saying ‘Let’s move on. We cannot maintain this stand-off forever’.”
The west had also accepted this, he said. “Western powers took a position on the land issue and in past fought to reverse it through regime change,” he said. “I think they now accept it is irreversible.”
To clinch a deal, Zimbabwe will need IMF endorsement of its reform efforts when a mission visits next month. Donors will also need convincing that deeper reform efforts are under way.
Mr Chinamasa said Mr Mugabe personally backed plans to get government spending in order and to attract foreign investment. However, western officials complained of mixed signals over public-sector wages, which consume more than 80 per cent of the government’s budget, and of conflicting rhetoric over “indigenisation” — including majority government stakes — of foreign businesses.
The US may be more reluctant than Europe to be seen to be propping up Zimbabwe. Even some Zimbabweans say the west should not reward Mr Mugabe’s government.
Nelson Chamisa, an opposition MP with the Movement for Democratic Change, said re-engagement would “embolden the dictatorship” and weaken the opposition. “Zimbabweans cannot understand why there’s been an easing of the pressure . . . Nothing has changed,” he said.