Published by the government of Zimbabwe
Business Reporter
22 February 2002
THE International Monetary Fund and the World Bank, which have turned their back on Zimbabwe, should accept responsibility for the debilitating effects their policies have had on the southern African nation.
In a 56-page report on the impact of the public debt on the country, the Zimbabwe Coalition on Debt and Development blamed the policies instigated by the two institutions for plunging Zimbabwe into an economic recession.
Zimcodd is a non-profit-making organisation founded in February 2000 to promote development in Zimbabwe.
The Bretton Woods institutions led by IMF have since folded their arms on the economic crisis gripping Zimbabwe.
This is despite the World Bank's admission that it had misjudged the ability of Zimbabwe's economy to take advantage of economic liberalisa- tion.
Between 1990 and 1995, the Gross Domestic Product, which is the total value of goods and services produced locally, declined from US$8,5 billion to US$6,8 billion as foreign debt increased substantially by about 55 percent.
The external debts increased from US$3,25 billion to US$5,05 billion during the period.
"It is true that in 1992 and 1995, droughts reduced Zimbabwe's GDP and human development index.
"Moreover, the costs of the Economic Structural Adjustment Programme (Esap) and the Zimbabwe Programme for Economic and Social Transformation (Zimprest) in terms of both foregone human development and also in terms of direct budgetary interest expenditures are substantial and unbearable in view of the prevailing economic instability and decline resulting from the same programmes.
Credits
"Not only did conditions on loans throughout the post-independence period lower the standard of living of ordinary Zimbabweans, but the for- eign credits also alienated the intended beneficiaries.
"An important question to ask is whether or not some of these loans, made in hard currency, could not be raised using national savings," said Zimcodd in its report released in Harare on Tuesday.
Zimcodd said Zimbabwe's foreign debt at US$5 billion was "unpayable and should be cancelled."
The coalition called for debate to deal with the foreign and domestic debt holding back Zimbabwe's progress.
The report was commissioned as part of steps to resolve deep-seated economic distortions that have given rise to civil strife and social breakdown.
The report noted that the debt problem inherited by the present Government was largely to blame for the current economic slide.
Zimbabwe is no different from other third world countries that have been pushed to extremes by the need to service debt obligation incurred by former colonial masters.
For example, during the colonial period the Rhodesia government incurred gigantic debts to finance its hold on power.
Even after independence, Zimbabwe had to dig deep into its pockets to defend its sovereignty against destabilising forces in South Africa and Mozambique.
And in 1991, the Government was forced to adopt market reforms by the IMF and the World Bank, which worsened the situation.
The Bretton Woods institution-led reforms meant that the Government embark on civil service reforms, remove price controls, restructure parastatals, do away with subsidies and liberalise trade and interest rates.
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