Saturday, March 14, 2009

Without aid the inclusive gvt will fail: Biti

Ralph Nkomo
Fri, 13 Mar 2009 18:45:00 +0000

ZIMBABWE'S new finance minister yesterday said that the inclusive Government will fail, with potentially disastrous consequences, unless international donors urgently inject cash into its treasury.Tendai Biti, who once said the Prime Minister had friends who would support the inclusive Government said: "Our capacity to deliver is linked to economic stability and we need help. It cannot be a chicken and egg situation; there has to be a chicken, or an egg, first."Biti said he welcomed Australia's move to boost humanitarian assistance to Zimbabwe by US$10 million, but said donations channelled through international aid agencies would not save the transitional Government. The finance minister, who is also secretary general of the Movement for Democratic Change (MDC), said: "If we fail, the consequences will be dire, such as a military coup or civil unrest."Western countries' governments that have imposed illegal sanctions on Zimbabwe have indicated that they will not immediately pour funds into Zimbabwe, or lift sanctions.Biti needs to raise a civil service salary bill - including the politically crucial police and army - of up to US$70m a month after Prime Minister Morgan Tsvangirai promised at his inauguration speed that all civil servants will be paid by foreign currency.Zimbabwe's exchequer is severely depleted and inflation is running into millions of per cent. Biti said: "I am the treasury, I am the chancellor of the exchequer, trust me. I guarantee money paid to the treasury will be correctly spent."When MDC leader Morgan Tsvangirai was sworn in as prime minister on 11 February he promised to pay salaries in hard currency. So far the inclusive Government has managed to pay a US$100 bonus to all civil servants which was suggested by then Acting Minister of Finance, Patrick Chinamasa.On Wednesday, Australia became the first donor country to announce an increase in humanitarian aid - split between the British Department for International Development and the UN children's fund, Unicef - since the inclusive Government was sworn in. Diplomats said other countries would soon follow suit, starting with Sweden, which will next week announce £7m for a UN fundraising effort for the Red Cross. Britain has yet to announce any new initiatives.Teams from the International Monetary Fund and World Bank are in Zimbabwe to study "how to resume relations" with Zimbabwe. The country is currently in arrears of US$180m. Yesterday at an IMF conference in Dar es Salaam, Tanzanian president Jakaya Kikwete said: "The economy is almost in freefall. All of us have to lend a hand."Donor countries are to meet in Washington on 20 March. A European diplomat in Harare said donors' focus was on finding ways to increase aid.The diplomat said: "Some of the humanitarian aid money is already earmarked for supplementing health workers' salaries. We are now looking at how to do the same with teachers' pay."Biti recently asked regional counterparts for $2bn (£1.4bn) over the next 10 months.

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