MEDIA REPORT IMF AND ZIMBABWE; HARARE

UNCLAS HARARE 001209 SIPDIS FOR AF/PDPA DALTON, MITCHELL AND SIMS AND AF/S RAYNOR E.O. 12958: N/A TAGS: PREL ECON KPAO KMDR ZI SUBJECT: MEDIA REPORT IMF AND ZIMBABWE; HARARE ¶1. Under headline "Embrace the devil" the independent weekly "The Financial Gazette" dedicated its June 12 editorial to encouraging the government of Zimbabwe "to seek rapprochement and mend fences" with the International Monetary Fund (IMF) "for the good of the nation." The call comes hard on the heels of the suspension of Zimbabwe's voting rights in the IMF. Excerpts follow: ¶2. ". . .A wide cross-section of Zimbabweans greeted news of the suspension of the country's voting rights with collective trepidation because they know only too well what this means and its implications - Zimbabwe's credit rating. . .has been reduced to junk status, a red flag which will not escape the attention of the international financier community. With the IMF funding on ice, Zimbabwe is now in a very deep hole because no matter how far the country passes the hat, no international financier will twitch. The decision by the IMF to suspend Zimbabwe will now set the stage for the stiffening of the hands of the other international institutions that have been sitting on the sidelines waiting to take the cue on Zimbabwe from the IMF. What the IMF has done will only help to convince the world that Zimbabwe has its needle well and truly stuck, so to speak. . .To these financiers the IMF's move on Zimbabwe is a wake-up call: they will not touch Zimbabwe even with a barge pole. . .Be that as it may, with the economy having collapsed into a recessionary heap we do not have much of a choice. . .We feel that we have no option but to seek rapprochement and mend fences with the IMF. Whether we like it or not we have to bite the bullet and knuckle down to the IMF demands for the good of the nation. Given our predicament, the IMF is a necessary evil that, if it comes back to Zimbabwe, could trigger a massive inflow of external funds into the country and help us stabilize our finances. . . ." SULLIVAN