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IMF to Review Zimbabwe Situation in Mid-2004 - 2003-12-05

The International Monetary Fund says this week's announcement that Zimbabwe could be expelled from the multilateral lending institution for non-repayment is more an appeal for policy reform in the country than a threat. VOA's Barry Wood spoke to the IMF official responsible for Zimbabwe.

IMF division chief Doris Ross says it will be at least 12 months before Zimbabwe could be expelled from the organization, an action that would be unprecedented in recent decades. Zimbabwe's situation will be reviewed in mid-2004. Zimbabwe owes the Fund $233 million and has been in arrears for over two years.

Ms. Ross is hopeful that expulsion will not occur and that instead Zimbabwe's leaders will take action to arrest the country's accelerating economic decline, which has led to severe food shortages.

"We're not looking for leverage," she said. "We're looking for policies that will help the country improve its situation. And certainly a decline of its gross domestic product - the value of the production in the country - of 40 percent since 1999 is not a very good track record for the quality of the policies that have been pursued."

Sudan in the mid-1990s is the only other African country to have faced possible expulsion from the IMF. The United States Thursday has endorsed the IMF stance on Zimbabwe, accusing the country's leaders of appalling misrule.

IMF African division chief Ross detects some promising new signs inside Zimbabwe. She mentions specifically this week's appointment of Gideon Gono to head the central bank. He, says Ms. Ross, is expected to announce the bank's exchange rate and interest rate policies by mid-December.

"We are hopeful that this will provide an opportunity for the government to announce some specific measures that will help correct the many distortions that are in the economic system today," she said. "And that are acknowledged as problems by the policy makers."

Ms. Ross says Zimbabwe's 500 percent inflation rate will worsen over the next two months. This week President Robert Mugabe said the country's practice of having two sets of interest rates and two exchange rates had created distortions that must be corrected. Until recently, the country was an agricultural exporter. Now however, more than half of all Zimbabweans are receiving food aid.