Zimbabwes president Robert Mugabe has finally agreed
to seek debt relief for his battered country under the Highly
Indebted Poor Countries (HIPC) programme after
stubbornly denouncing its terms as humiliating.
Zimbabwean finance minister Tendai Biti told
Emerging Markets in an interview in Abidjan Thursday
that a cabinet meeting chaired by Mugabe on March 23 adopted a
new debt relief strategy, which includes resort to the HIPC
initiative to tackle a $6 billion debt burden.
Biti also said Zimbabwe will meet foreign donors in Oslo on
Monday to discuss its critical need for budgetary support. Of
$810 million needed in foreign assistance to fund this
years budget, only $3 million had been received, he
Zimbabwes economy has been on its knees for more than
a decade, and has suffered record levels of unemployment and
shortages of food and fuel. Zimbabwe has been unable to sustain
a national currency: it adopted the US dollar as legal tender,
and Biti said there is no end in sight to dollarization. Mugabe
has doggedly spurned debt relief with stringent terms. He has
said Zimbabwe would offer its natural resources as collateral
for a deal, but both the IMF and the opposition Movement for
Democratic Change (MDC) have scoffed at the idea.
Cabinet agreed on a debt strategy that will
include an attempt to use our resources through securitizations
and what it called traditional methods, Biti said.
Traditional methods basically is a euphemism for HIPC. So
we now have political consensus around this issue, he
Asked whether Mugabe had fully embraced the HIPC initiative,
Biti said: Of course. It was a cabinet
Biti, an MDC stalwart, was assigned the finance portfolio in
a power sharing deal with Mugabes ZANU-PF. MDC leader
Morgan Tsvangirai is prime minister.
It is now Bitis task to draw up a bankable reform
blueprint something Zimbabwe watchers say is fraught
with uncertainties, because of the shaky and dysfunctional
nature of the coalition government.
We have to craft a roadmap vis-à-vis a
monitored programme, Biti said. He indicated Zimbabwe
would allow unfettered access to IMF monitors. You
dont behave like Sudan: you do a staff monitored
programme and no one is at the side of the pitch [to monitor
it], he added.
Biti hinted Zimbabwe might cave to foreign pressure and
soften its laws requiring majority local shareholding in
companies in the country, which have been a major turnoff for
I think sooner, rather than later, there will be
clarity on our indigenization and empowerment clauses, he
said, adding that they would be redefined in a matrix
that I think anyone and everyone will be able to live
Both Biti and Prime Minister Tsvangirai have campaigned
tirelessly for assistance from rich nations, something Mugabe
has been happy to let them to do given his own pariah status in
I have absolutely no doubt that we will be able
to attract significant capital in the second half of the
year, Biti said. And I think our recovery in the
second half of 2010 will be front loaded.
Zimbabwe is also negotiating credit lines with South Africa
and regional banks, and Biti said he hoped to be unveiling
substantial credit lines within the next six