Zimbabwe moves to normalise relations with the IMF on its terms

Zimbabwe has made a move to normalise relations with the IMF after its voting right was suspended in 2003 due to policy differences with President Robert Mugabe and non payment of arrears.

The IMF has approved Zimbabwe's plan to clear billions of dollars of arrears, while Harare has agreed to enter a staff-monitored programme with the Fund, Finance Minister Tendai Biti said on Friday.


"This programme is about showing that Zimbabwe can be trusted again," Biti told reporters in Harare. "We engaged with the IMF on our terms."

While its voting rights were restored in 2010, Zimbabwe has not been able to borrow from international lenders since 1999 when it started defaulting on its debt. Its external debt stands at $10.7 billion (6.8 billion pounds).

The IMF board had agreed to allow Zimbabwe to negotiate debt relief and new financing by leveraging its natural resources according to Biti.

Under the staff-monitored programme, the IMF would want to see evidence of sound policies before agreeing to a lending programme.

Biti's comments came after Mugabe said he would hold elections by the end of July in line with a court order which has angered rivals who want them delayed to allow for reforms to ensure a fair vote. Prime Minister Morgan Tsvangirai has also threatened that its party might pull out of elections due to short time frame.

Zimbabwe is still emerging from a decade of economic decline and hyperinflation. The economy has slowly been on the mend since the formation of a unity government in 2009, and the government recently projected growth of 8.9 percent in 2013 which was 4.4 percent last year.

G20 Leaders Pledge to Avoid Currency Wars

G20 Leaders Pledge to Avoid Currency Wars
By Alexander Bratersky

Leaders of the Group of 20 said Saturday that global economic growth remains weak despite government measures, but they agreed to avoid currency wars intended to stimulate the economy by devaluing their money.

A meeting of the group's finance ministers and central bankers was held in Moscow for the first time, due to Russia's current G20 presidency. The Manezh exhibition hall, a stone's throw away from the Kremlin, was the venue.

"We recognize that important risks remain and that global growth is still too weak, with unemployment remaining unacceptably high in many countries," read a joint communique published on the G20's official site Saturday.

The communique, signed by high-profile financial experts including former U.S. Federal Reserve Chairman Ben Bernanke, also called on countries to avoid "persistent exchange rate misalignments."

"We will refrain from competitive devaluation," the statement said.

Financial experts said the communique indirectly criticized Japan, which recently devalued the yen to encourage economic growth by keeping interest rates at almost zero.

French Finance Minister Pierre Moscovici told reporters Saturday that G20 members had agreed not to engage in currency wars.

The commitment is in line with the position of Russian Finance Minister Anton Siluanov, who has said exchange rates should be set by the market because Central Bank interference could lead to imbalances, Rossiiskaya Gazeta reported Saturday.

G20 leaders also said they had agreed to establish a joint study group with the World Bank, International Monetary Fund and United Nations to stimulate the financing of long-term investment.

The G20 is also seeking to increase governments' control over the global financial system.

"The pendulum has swung toward tougher financial regulation," Deputy Finance Minister Sergei Storchak said Saturday, Prime reported.

The G20 meeting in Moscow was seen as a milestone for Russia, which is nursing the idea of turning Moscow into a key financial center despite purportedly poor corporate governance.

"A clear and enforced rule of law will be important for Russian financial markets to reach their full potential," Lawrence Goodman, head of the Center for Financial Stability, a U.S.-based financial think tank, told the Moscow Times in an e-mail interview Friday.

"Russian participation in the G20 and inclusion in the BRIC category of nations helps deepen its local financial markets," said Goodman, a former adviser to the U.S. treasury secretary.

"Although the clustering of Brazil, Russia, India and China is somewhat artificial," he said, "the four nations maintain the potential to shape future growth outside the advanced economies."

WTO: In search of a Future

All things tremble in the world as American economy shakes. The latest is the World Trade Organisation, a third tier financial cum economic organisation backing the Brettonwood institutions. The organisation admitted China in 2001 and Russia in 2011. It has controlled the destiny of the economy of most countries especially developing ones mostly in Africa alongside the World Band and IMF. The organisation is now in search of a future. More.