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Tuesday, December 5, 2023
BULAWAYO, Feb 9 2010 (IPS) - Faced with nearly six billion dollars of external debt, Zimbabwe’s national unity government is considering applying for Highly Indebted Poor Country status.
According to the prime minister’s office, the 5.7 billion dollars owed to the International Monetary Fund (IMF), the World Bank, the African Development Bank, and others prevents the country from borrowing more money, urgently needed to revive its economy.
The finance minister, Tendai Biti, says that joining the Highly Indebted Poor Countries programme is one way out.
HIPC was initiated in 1996 at least partly as a response to criticism of IMF and World Bank economic policy by civil society. The programme provides debt relief and low-interest loans to cancel or reduce external debt repayments.
To be considered for the initiative, countries must have an unsustainable debt burden. Assistance is on condition that the national governments of these countries meet a range of economic management and performance targets.
“You should know that Zimbabwe is not a poor country. It has vast natural resources, but these resources cannot be turned into capital,” says minister of state in the prime minister’s office Gordon Moyo.
“Zimbabwe should come up with a poverty reduction strategy paper, which is a blue print of how it is going to use the resources which are going to be availed to it once the debt is cancelled,” continues Moyo. “It is the responsibility of Zimbabwe, it’s not the imposition of the World Bank, IMF or the Paris Club or any other institutions.”
But Dr Qhubani Moyo, a public policy analyst and activist, says Zimbabwe’s economic problems don’t originate with its debt, but with the economic sanctions intended to weaken Robert Mugabe’s Zimbabwe African National Union-Patriotic Front party, which ruled from 1980 until 2008 when it was joined by two factions of the rival Movement for Democratic Change in a unity government.
Responding to the minister’s assertion – citing debt relief and economic growth in Uganda, Mozambique, Zambia and Nigeria – that HIPC has worked well for other African countries, Qhubani Moyo says the comparisons are mistaken.
“If you think that there is one formula for solving problems that hit all African counties, then you will have a serious problem in the long run.
“Countries like Mozambique were coming from a bloody civil war. Zimbabwe is a country whose economy collapsed but there was nothing in terms of destruction of infrastructure and superstructure. Also: if you look at Mozambique and these other countries that have become HIPC countries, the so-called growth is nominal. It’s not being felt at the level of individuals.”
Zimbabwe Coalition on Debt and Development representative Janet Mudzwiti criticises the HIPC plan from a different angle.
“We are against lender-led relief initiatives, simply because their ideology is not pro-people; they are not people-based policies. To us the HIPC principles still hinge on the neo-liberal policies that you have to open up your markets, introduce user fees for social essentials such as health and water. We are saying it’s not different from the Structural Adjustment Programme which was disastrous.”
Regarding the country’s debt, she raises two important issues.
“There is the issue of odious debt and the issue of illegal debt,” Mudzwiti says.
“When you look at the issue of Zimbabwe’s debt profile, there is the issue of colonial debt (incurred by a white-only government between 1965 and 1980). And we have the issue of debt (incurred) under the economic structural adjustment programme.”
Odious debt is debt entered into by a government on behalf of the people, but which doesn’t benefit them. Much of the $500 million dollars of debt run up by the Rhodesian state was spent on fighting a war against the black majority; there is a strong case for that debt to be deemed odious.
Much later, Structural Adjustment Programmes were imposed by the World Bank and IMF across Africa in the 1980s and 1990s as a condition for loans to cover a previous debt crisis.
Zimbabwe’s adoption of structural adjustment proved disastrous for the economy and activists are concerned that the conditions for HIPC may replicate this experience.
Once bitten, twice shy. Qhubani Moyo does not want the country to turn to the Bretton-Woods institutions for answers.
“Zimbabwe has a way of dealing with its problems. We can’t have a one fix solution for all. Zimbabwe has to come up with its own model to use its own resources for its own recovery and its own growth.”
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