New Zealand cable shows power of US over IMF

New Zealand had to seek clarification urgently about what to do with Harare when the Zimbabwean government paid back US$120 million to the International Monetary Fund in August 2005.   Zimbabwe owed US$290 million and was at the time facing an economic crisis at home.

According to a cable released by Wikileaks, New Zealand wanted to know whether the United States would now consider Zimbabwe to be in compliance with its IMF obligations.

The cable clearly indicated the power the US has over the IMF because it went on: “Post seeks Department guidance on how it should respond to these questions.”

Full cable:

September 2, 2005

SUBJECT: NEW ZEALAND: RESPONSE TO DEMARCHE ON ZIMBABWE VOTE IN IMF

Classified by: Acting DCM Katherine B. Hadda. Reasons: 1.4 (b) and (d).

1. (U) This is an action request — please see Paragraph 3.

2. (U) Post on August 29 delivered reftel demarche to the New Zealand Agency for International Development, which handles issues related to the International Monetary Fund (IMF).

3. (C) On September 2, a representative of New Zealand’s Treasury noted Zimbabwe’s decision to pay back US $120 million of the US $290 million it owes the Fund. The representative asked whether the U.S. government would now consider Zimbabwe to be in compliance with its IMF obligations, or whether the United States still believes Zimbabwe should be expelled from the Fund. Post seeks Department guidance on how it should respond to these questions. Post also notes that the Treasury representative is due to deliver a recommendation on the issue to New

Zealand’s Finance Minister on September 5 and that a response by COB September 2 (Washington) would be very helpful.

Burnett

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