June 11, 2009 11:36 pm

Money the key to Tsvangirai mission

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When Morgan Tsvangirai meets US President Barack Obama on Friday he will be at pains to dispel the notion that he is on a ”begging bowl mission”.

The Zimbabwe prime minister talks in terms of ”international re-engagement”. One of his deputies, Arthur Mutambara, told a meeting of the World Economic Forum in Cape Town this week that the simple fact of the meeting with Mr Obama itself constitutes a ”victory”.

But whether Mr Tsvangirai and his supporters in the Movement for Democratic Change like it or not the prime minister’s three week tour of western capitals will be judged at home by his success in raising money.

Although Zimbabwe’s economy has stabilised since the local currency was effectively replaced late last year by the South African rand and the US dollar, the coalition government between the MDC and President Robert Mugabe’s Zanu PF - which took office four months ago - is in urgent need of very much greater economic assistance.

Manufacturing and mining output is recovering; banks have greater liquidity and the government has secured some $1bn in trade finance - mainly from the Cairo-based African Export Import Bank in Cairo and the PTA Bank (part of the Common Market for Eastern and Southern Africa). At the same time Botswana and South Africa have also come forward with credit lines.

But the the economic advance is extremely sluggish and the government is desperately short of cash. It needs $250m a month just to be able to meet the current civil service “allowance” of $100 a month, let alone pay the ”proper salaries” that it has promised to introduce into the public service from July. 

According to an April report by the International Monetary Fund, it was already on course to register a $200m shortfall in terms of its $1bn revenue target in 2009. Donors are set to disburse more humanitarian assistance than last year’s $600m. In the first quarter of this year $300m was promised.

But without much bigger sums - specifically for budgetary and balance of payments support - the government will be unable to pay its bills and the economy will remain in intensive care.

Donors though are unlikely to make significant payments unless they see more evidence that the rule of law is being restored. Government ministers from both sides of the country’s political divide continue to insist that they are working well together.

”We have worked so well as an inclusive government,” Patrick Chinamasa, a Zanu PF minister told the WEF in Cape Town. But there is continuing deadlock in a number of areas. So far, Mr Tsvangirai has been unable to dislodge two key Zanu PF ministers and allies of Mr Mugabe whose presence in government it opposes.

Gideon Gono, the governor of the central bank judged responsible for much of Zimbabwe’s economic chaos in recent years and a bete noir among donors, remains governor of the Central Bank. Johannes Tomana, who is accused of ordering illegal land takeovers, is still attorney general.

Mr Tsvangirai has not made much progress either in lifting repressive media and law and order legislation. Indeed, to the fury of the country’s remaining 300 white farmers Mr Tsvangirai recently described the farm invasions as “so-called attacks” and “isolated incidents” that had been “blown out of proportion” by the media.

The Commercial Farmers Union says that since the government of national unity took office in mid-February more than 100 farmers have been charged in the courts with being on their farms “illegally” while some 80 farms have been occupied by Mugabe loyalists costing thousands of farm worker jobs.

In Cape Town, both Mr Mutambara and finance minister, Tendai Biti, insist progress is being made. But according to donors in many parts of the country the government is simply not in control of events. Even when the politicians agree a course of action, demoralised civil servants are simply unable to put it into effect.

“It is not just that the right hand does  not know what the left is doing, but the left-hand doesn’t know what the left hand is doing,” said one exasperated donor. In addition, they argue that the inexperienced and under-resourced administration is not handling its relationship with development agencies effectively. ”They keep coming to us wanting a few million for this or that but what we need is a coherent medium-term framework,” he added.

All this suggests that Mr Tsvangirai will return from his trip with good wishes ringing in his ears but little else.

Last week the Dutch government made clear that it wanted to see more reform in Harare before it opened its cheque book. So did Johnnie Carson, assistant secretary of State for African Affairs in the Obama administration and, as a former US ambassador to Harare, a man who knows President Mugabe well.

“There is no indication that the US government is prepared to lift [targeted] economic sanctions against those in Zimbabwe who have been most responsible for undermining the country’s democracy and destroying its economy,” Mr Carson said. More political, social and economic reforms were needed first, he added.

That is likely to leave the Zimbabwe government limping along. One western diplomat said that there is a strong case to provide “enough oxygen” to keep the fragile coalition on the rails.

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