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IMF Paints Bleak Picture of Zimbabwe's Economy - 2004-04-01

The International Monetary Fund has painted a bleak picture of Zimbabwe's economy, which it says continues to deteriorate. A team from the International Monetary Fund, which is one step away from expelling Zimbabwe, has spent two weeks collecting information for its annual report.

Zimbabwe's economy has shrunk by 30 percent and inflation has doubled each of the past three years, according to a brief statement issued by the IMF team hours before it left the country late Wednesday.

For many years, the Zimbabwe government has criticized the International Monetary Fund, calling it a tool of western imperialism.

But times have changed, and even though President Robert Mugabe remains critical of the fund, his central bank governor welcomed the team warmly. The governor, former private sector banker Gideon Gono, said last December Zimbabwe needed to repay its IMF debt and be able to borrow again.

The IMF team highlighted a downturn in agricultural output as the major factor in Zimbabwe's economic crisis.

Mr. Mugabe's government has seized 90 percent of land owned and worked by white commercial farmers, whose production sustained the economy for decades. The land was given to blacks, many of them Mr. Mugabe's supporters, who do not have the skills or the financing to make the farms productive.

The IMF team also said unemployment is at 70 percent.

The president of the Zimbabwe Congress of Trade Unions, Lovemore Matombo, said the unemployment figure is actually higher than that, and is growing daily.

The IMF team did applaud the central bank governor's financial reforms, which have resulted in the closing of several banks and asset management companies after several years of wild currency speculation.

Team members also said they appreciate Mr. Gono's effort to stabilize the Zimbabwe dollar, which have closed the gap between the official and black market rates.

Zimbabwean economist and financial advisor John Robertson says the country is now repaying small amounts monthly to the International Monetary Fund and so probably will not be expelled from the organization.

But he said the full extent of the IMF criticism would only be known when it finishes its report, perhaps in two months. Mr. Robertson said the decision on whether to make the IMF report public will rest with the Zimbabwean government.

A statistic from the International Monetary Fund that has shocked many Zimbabweans across party political lines, is that school enrollment has dropped by 35 percent. Many students have been forced to drop out of school because rising fees and runaway inflation have left their families unable to pay the fees. Both private and public schools in Zimbabwe charge fees.

The government says it had charged more than 30 principals at private schools with raising fees without government approval. The national Education Department says it has suspended 70 state school heads for the same reason.

The state controlled Herald newspaper, which usually reflects government thinking, was critical of these actions Thursday. It said action should be taken against schools only when fees are raised without parents' consent.