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Mugabe in plea for S Africa to bail him out of crisis
President Robert Mugabe's destruction of Zimbabwe's economy began to strike home yesterday after he had to ask South Africa for a rescue package.Unable to arrest the spiralling crisis or buy essential supplies of fuel, Zimbabwe has turned to its powerful neighbour. Senior officials have visited South Africa to request an emergency injection of money likely to run into hundreds of millions of pounds. About one third of Zimbabwe's economy has been wiped out in the past five years, putting it among the fastest shrinking in the world. Inflation runs at 164 per cent, the highest in Africa. Mr Mugabe's seizure of white-owned farms, the destruction of commercial agriculture and the collapse of tourism mean his regime is incapable of paying its way. Until recently, his response to this crisis was repeatedly to claim that Zimbabwe was enjoying a "strong recovery". Yet he has finally acknowledged the gravity of the situation by dispatching his key aides to South Africa. A spokesman for South Africa's central bank said that Tito Mboweni, its governor, met a Zimbabwean delegation last Friday. Sources in Zimbabwe's capital, Harare, said this was led by Gideon Gono, the governor of the Zimbabwean Reserve Bank. If agreed, the rescue package would place a considerable burden on South Africa. John Robertson, an independent economist in Harare, said Zimbabwe needed about £60 million for fuel and £110 million for importing maize to fend off starvation. Zimbabwe owes the International Monetary Fund £175 million - more than seven per cent of its entire economy. The next meeting of the IMF executive board will discuss whether to cast Mr Mugabe into isolation by formally expelling Zimbabwe. Since electricity and raw materials also have to be imported, an overall sum approaching £500 million may be required. Unable to turn to any international organisation, Mr Mugabe has no option but to approach South Africa. "The government find it too embarrassing and too difficult to try to make things work in the absence of outside help," said Mr Robertson. "The scarcity of fuel means the country is nearly immobile. You can park anywhere in town these days because there are so few cars about." Mr Mugabe's demolition of township areas has worsened the economic crisis. With hundreds of thousands left homeless, his regime has pledged to build new houses to replace those its bulldozers have destroyed. But there are no funds available. The Reserve Bank will have no option but to print money to cover the cost of new housing. By turning to the printing press to fund his budget deficit, Mr Mugabe will cause inflation to rise still more. pathetic for Bob; tragic for Zimbabweans Posted by: Spot 2005-07-19 |
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