Zimbabwe gets World Bank grant
2009-05-18 16:53
Special Report
A classical music presenter for the BBC has been arrested and is in custody in Zimbabwe.
Harare - The World Bank said on Monday it
would soon make its first grant to Zimbabwe since 2001, a
breakthrough for the power-sharing government which is desperate
for Western financial aid to fix the bankrupt economy.
The $22m grant would be available in the next few
weeks, said bank official Toga Gayewea McIntosh, but he said
major support would only come when Zimbabwe clears its arrears.
That is not expected any time soon.
McIntosh was speaking after meeting Prime Minister Morgan
Tsvangirai and Finance Minister Tendai Biti, who joined old
rival President Robert Mugabe in a coalition in February to try
to rescue the ruined southern African state.
Zimbabwe will depend heavily on international support for
reconstruction. Strong ties with the World Bank and
International Monetary Fund are vital.
Arrears
"There are conditions to re-engagement with the Bank, you
have to do a lot of things, such as the clearance of arrears,"
said McIntosh, the bank's executive director for a group of
countries that includes Zimbabwe.
Zimbabwe owes about $1.1bn to the World Bank and the
African Development Bank. Total arrears to official and private
creditors amount to about $3.8bn.
The government has appealed for $8.3bn to help rebuild
an economy ravaged by hyperinflation and business contraction,
but Western donors have been wary of committing funds until it
is clear the government is working effectively.
Sharp differences remain between Mugabe and Tsvangirai, from
the long time opposition Movement for Democratic Change (MDC),
over difficult issues such as the review of the posts of central
bank governor and attorney general.
Despite its limited success with Western donors, who demand
wider political and media reforms and the release of all
political prisoners, Zimbabwe has raised $30m from South
Africa and $5m from China.
The government also says it has surpassed a $1bn
target in credit lines for the private sector from African
banks.
Voting rights suspended
Biti said the government would work with the World Bank on a
debt reduction programme.
"Without an arrears clearance programme, we cannot avail
ourselves of the huge funds that are available," Biti said.
Later on Monday, Biti was scheduled to meet a team of
experts from the International Monetary Fund (IMF), beginning a
visit to provide technical assistance in the areas of payment
systems, bank supervision and central bank governance.
Zimbabwe has been in continuous arrears to the IMF since
February 2001, and now owes the organisation about $133m.
The IMF, which suspended Zimbabwe's voting rights in 2003,
has previously indicated that all arrears needed to be cleared
before any resumption of financial support.
- Reuters