1. April 2009

Biti warns of social breakdown if West fails to pay

Zimbabwe's Finance Minister Tendai Biti has called on the West to begin funding the new government to avoid a social breakdown. His ministry has produced a short term recovery programme, costing it at US$5bn, but he is already saying that he needs at least $8bn to fulfill the reconstruction wish-list.

Biti was addressing a joint press conference in Harare with the visiting Norwegian International Development Minister Erik Solheim. The Zimbabwean minister told reporters the unity government was set to fail without donor support, and explained the consequences would include possible violent civil unrest.

“The consequences of it (unity government) not working are drastic, it will lead to a failure of the state, a collapse of the state and all the civil unrest that follows the failure of a state,” Biti said.

But there has been no sign that Western donors will break ranks beyond giving humanitarian aid, though Denmark and Norway have indicated they may move further along this line. The International Monetary Fund said after ending its first mission to Zimbabwe since 2006 that it will not yet give the go-ahead.

Western countries remain nervous about the future of the government and the degree to which it can hold together. They want first to see the implementation of genuine and comprehensive political and economic reforms. The US wants a new and democratic constitution in Zimbabwe within the next 18 months, followed by fresh elections, before it lifts targeted sanctions or provides significant financial support.

There were immediate signs of an economic pick-up in Zimbabwe after the Zim Dollar vanished and was replaced by Rands, Dollars and Pula. But the long-term effects of economic breakdown remain, with an 82 percent increase in asylum seekers from Zimbabwe recorded last year, according to a report by the UN Refugee Agency.

South Africa is meanwhile likely to use the G20 summit meeting coming up in London on April 5 as a lobbying opportunity to break the unity of Western countries, with Finance Minister Trevor Manuel saying they needed to support their “friend” MDC leader Morgan Tsvangirai.

SA has also promised $2bn in loans and an addition R60m in agricultural support, to back up the R300m it sent at the end of last year for farming inputs. SA can expect these loans to be repaid - Zimbabwe is effectively being integrated into its own economy after the decision by the finance ministry to make the Rand Zimbabwe¹s effective currency. (SouthScan)

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