The Herald has billed tomorrow’s breakfast briefing by Finance Minister Patrick Chinamasa and the International Monetary Fund head of mission in Harare Domenico Fanizza as unprecedented.
“This development marks a new chapter in Zimbabwe’s relations with the multilateral institution whose engagement in the past has been frosty and comes in the wake of a new momentum in the country’s efforts to revive the Zimbabwean economy following the historic agreements to support major infrastructure development projects with China and Russia,” the paper says.
While Zimbabwe seems desperate to get help from anyone, friend or foe, The Herald should have stated clearly that the IMF is bad news for Zimbabwe. This is not to say Russia and China are good, they have yet to be tested and history will tell.
The IMF record is there and it is not good.
According to the report: Uncovering Zimbabwe’s Debt, published in 2011, Zimbabwe was doing well in the first decade and poverty was declining. That is until the IMF came in, in 1991 with its Economic Structural Adjustment Programme.
“Structural adjustment was meant to increase economic growth, make the balance of payments more positive and reduce unemployment. In reality, economic growth fell from averaging 4.5 per cent in the 1980s to 2.9 per cent between 1991 and 1997.
“Imports grew faster than exports, changing an annual trade surplus between 1985 and 1990 to a trade deficit. Unemployment increased from around 22-30 per cent to 35-50 per cent. Furthermore, the proportion of people living below the poverty line increased from 40 per cent in 1990 to 75 per cent by 1999,” the report says.
Another report:How Zimbabwe lost its food sovereignty and security, says in the first decade of its independence Zimbabwe boosted maize production by peasant farmers from 10 percent to 60 percent.
The Grain Marketing Board held over three years of maize food security reserves and over eight years of small grains.
When the IMF came in, it said Zimbabwe should dispose of its reserves. It was costing too much to keep them. Zimbabwe has been importing food ever since and has never been self-sufficient.
The report says under the IMF formula, Zimbabwe exported 7.1 million tonnes of maize between 1980 and 2008 and imported 6.4 million tonnes, but it paid US$1.9 billion for the imports and earned only US$944.5 million for the exports.
According to Uncovering Zimbabwe’s Debt, Zimbabwe was given loans totaling US$7.7 billion up to the end of 2009 and had repaid US$11.4 billion but it still owed more than US$7 billion.
The IMF is therefore only there to make sure Zimbabwe gets deeper and deeper into debt and remains under its grip. Witness the cases of Argentina and Ghana, both recently referred to as success stories by the IMF.
Russia and China are not saints either, they too should be watched.