Independent Catholic News
The International Monetary Fund has announced that it has agreed a Staff Monitored Programme with the Zimbabwean government. The programme means the Zimbabwean government has to implement conditions as set by the IMF, but no money is lent. Completing the programme is the first of many steps Zimbabwe would need to take to qualify for some debt relief under the Heavily Indebted Poor Countries initiative.
The IMF has not yet revealed the detailed conditions of the programme. However, conditions discussed in 2012 included a freeze in public sector pay. The programme runs from April-December 2013, despite having only just been announced, and despite the fact elections are due to take place in Zimbabwe in coming months, effectively tying the hands of a future parliament.
Tim Jones, Policy Officer at Jubilee Debt Campaign, said: “Rather than rushing into a debt relief process and IMF conditions, Zimbabweans need a debt audit to examine where the debt came from and how to prevent a debt crisis arising again. In the 1990s, the debt crisis and IMF economic conditions forced on the country caused poverty and unemployment to increase, and economic growth to collapse.
“The IMF has no legitimacy to force economic policies on Zimbabwe.”
Zimbabwe has not yet been judged to be eligible for the IMF and World Bank Heavily Indebted Poor Countries (HIPC) initiative. Meeting IMF conditions is one step towards doing so. Completing the HIPC initiative and receiving some debt relief usually takes several years. Joining the HIPC scheme would actually cost Zimbabwe money because it would be required to start making debt payments again, something it is not currently doing.
Tim Jones, Policy Officer at Jubilee Debt Campaign, continued: “The main reason for Zimbabwe to seek HIPC debt relief is to become eligible for new loans again. There is a danger these loans will repeat the country’s history of debt crisis. A debt audit can work out what loans are needed for, and how to prevent them from once again increasing poverty and inequality.”