Wednesday, September 17, 2008

IMF opens door to restore ties with Zimbabwe

The International Monetary Fund on Monday opened the way to work with Zimbabwe's new power-sharing government but said the country's leaders first need to make clear commitments to rescue the economy.

IMF Managing Director Dominique Strauss-Kahn said the signing of the power-sharing accord between President Robert Mugabe and opposition leader Morgan Tsvangirai was a chance to reverse the economic crisis, where inflation is more than 11 million percent, the world's highest rate.

"We stand ready to discuss with the new authorities their policies to stabilize the economy, improve social conditions, and reduce poverty," Strauss-Kahn said in a statement.

But Strauss-Kahn said the government needed to show it was willing to implement credible policies to put the economy on sounder footing.

"I encourage the government to take steps to show clear commitment to a new policy direction and to seek the support of the international community," he added.

Such a strategy would also help put Zimbabwe in better standing with the international community and to restore ties with the IMF.

The fund suspended Zimbabwe's voting rights in June 2003, barring it from participating in IMF decisions, as the Mugabe government fell behind on paying its IMF debts and the economic situation deteriorated.

While Zimbabwe has averted expulsion from the IMF, the global lender has maintained its suspension of financial and technical assistance to Mugabe's government, which is around $114 million in arrears to the fund.

Strauss-Khan urged the new government to seek help from international donors.