Global Policy Forum

Kumbirai Mafunda

With news that the International Monetary Fund (IMF) has instituted steps to suspend Zimbabwe's voting rights to pave way for an outright ejection from the international body, local analysts say this could be the proverbial straw that broke the camel's back for the country's struggling economy which has so far defied all odds by staying afloat.

The analysts said a decision to suspend Zimbabwe's voting rights alone would lead to a downward revision of the country's projected economic performance for 2002, which is currently expected to shrink by 12%. Industrialists and economic commentators told Standard Business last week that the IMF's decision, announced a fortnight ago, had sounded the death knell for the country's struggling industry which has seen over 500 manufacturing companies close shop over the past two years.

They said that the move could see a wholesale departure by the remaining few countries that were still extending credit facilities to the struggling southern African economy Said John Robertson, a Harare-based economic consultant: "These extra measures will really be annoying to government which wants to take part in international affairs. We should be a market player in international affairs, but yet we are isolated by the Commonwealth and moreover by the IMF. This will further damage our credit worthiness, "We already have a bad record and that will be made worse by our isolation. Nobody will help us if the IMF is not involved because it sets the pace for every entry. We are doing the wrong thing and failing to attract the people we need."

A fortnight ago the executive board of the IMF decided to initiate the procedure to suspend Zimbabwe's voting and related rights in the body for not co-operating adequately with the fund in resolving its overdue financial obligations. Zimbabwe's arrears to the fund amount to 33% of its quota in the fund. Group chief executive of Surgimed Trading and chairman of Trinidad Industries, Danny Meyer, said the country was inclined to lose its established markets abroad as customers and clients will have to contend with thoughts of whether their supplier will be able to continue providing products.

"Our credit rating is definitely going to plunge further down. It is going to affect our business directly in the sense that it is a pure reflection of the way we are managing our economy. The few remaining trading partners are bound to reexamine trading relations with businesses in the country and may scout for other markets," said Meyer.

However Confederation of Zimbabwe Industries acting chief executive, Farai Zizhou, felt the decision would not have a telling effect on the economy as Zimbabwe was already isolated by the international community. "The issue of credit is almost a non issue. Even our colleagues in South Africa are demanding cash upfront. Although there are many people who take a cue from the IMF, the picture is already bad and any such move will not make it really bad," said Zizhou.

FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.