Can the IMF really drag Zimbabwe out of its crisis?

So far, Zimbabwe’s neighbours and the Southern African Development Community have been silent about the renewed crisis. After years of mediation and accompanying Zimbabwe through its 2008 Global Political Agreement, the region was wrong to take its eye off the ball after ‘Mugabe’s so-called win in the 2013 elections,’ says Pigou. He believes the region should wake up to the realities of the Zimbabwean crisis.

Meanwhile, ordinary Zimbabweans are not likely to see any real benefit from a possible bailout in the short term. The news of salary delays came as a blow to government employees who fear the worst, and trade unions are now threatening a nationwide strike. Banks have been limiting the daily rate of withdrawals to prevent money from flowing out of the country.

Since the beginning of Zimbabwe’s economic crisis, thousands of Zimbabweans have left the country. Remittances from these migrants – most of whom work and live in neighbouring countries – are losing their value due to the weak rand-dollar exchange rate.

A very robust informal sector, which has managed to weather many crises these past 15 years, is also hard hit by the currency problems, which have made cross-border trade exceedingly difficult. Pigou says another question is whether international engagement would, in fact, lead to real economic reforms that would benefit everyone in the long term. For now, he says, the population is being held hostage by politicians who are distracted by the succession battle and desperate for short-term gains.

By Liesl Louw-Vaudran- ISS Today

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