The International Monetary Fund's board meets Friday to discuss the restoration of Zimbabwe's voting rights, which were suspended in 2003. If granted, this would bring the African nation one step closer to being eligible to access IMF funds.
In 2001, the International Monetary Fund decided that Zimbabwe was ineligible to receive IMF resources because the nation had failed to meet its obligations. Two years later, the IMF's Executive Board suspended Zimbabwe's voting and related rights, after determining that Zimbabwe was not sufficiently cooperating with the IMF in areas of policy implementation and payments.
But the IMF's stance on Zimbabwe could be changing.
David Hawley, the senior adviser in the IMF's external relations department, says the executive board is considering whether to restore Zimbabwe's voting rights, and, in connection, Zimbabwe's ability to access IMF assets. "The restoration of voting rights means that Zimbabwe can, like other members, participate in the decision making by casting votes, access to the general resources, the quota resources of the fund which means borrowing," he said.
Even if the board decides to restore Zimbabwe's voting rights Friday, Zimbabwe's outstanding debt prevents the African nation from immediately gaining access to IMF credit. "There is an important caveat that I should add. Access to the general resources of the fund, the quota resources of the fund, would depend on Zimbabwe clearing its arrears to the Poverty Reduction and Growth Trust," said the senior adviser.
Hawley says that as of the end of 2009, Zimbabwe was about $140 million in arrears. He adds that Zimbabwe has taken steps within the past year to resolve that outstanding debt. "Zimbabwe has made some quarterly payments of $100,000 to the fund from May 2009, as we have previously disclosed, toward clearance of those arrears," he said.
For most of the past decade, Zimbabwe's economy was in decline, marked by soaring inflation and unemployment rates, and a shrinking economy that critics blame on controversial land-reform policies.
Soon after Zimbabwe's national unity government came to power in February 2009, the Zimbabwean dollar was replaced - a move that brought some stability to the nation's economy.
IMF officials who visited Harare last October said Zimbabwe's economy began to recover in 2009, in part due to the government's adherence to cash budgeting. The IMF delegation chief said access to IMF loans would require a sustained track record of sound policies and the clearance of arrears.
During a recent visit to Washington in an effort to gain international support, Zimbabwe's Finance Minister Tendai Biti said his nation needs help to sustain the progress it has made. "We need to transform the Zimbabwean economy. We need to modernize the Zimbabwean economy. But we cannot do that without a fund of at least $8 billion, and therefore, we are appealing for a modern day George Marshall," he said.
Marshall was the man responsible for formulating the so-called Marshall Plan to rebuild Europe after WWII.
Biti has said that the United States, Britain and Germany have offered assurances that they will support the restoration of Zimbabwe's voting rights.