(Adds details, background)
WASHINGTON Oct 30 (Reuters) – The International Monetary
Fund on Tuesday relaxed restrictions on technical assistance to
Zimbabwe, opening the way for an IMF staff-monitored economic
program.
The move marks a major step toward normalizing relations
with the southern African country.
“The executive board has decided to resume IMF technical
assistance in certain new areas to support Zimbabwe’s
formulation and implementation of a comprehensive adjustment and
structural reform program that can be monitored by the staff,”
the IMF said in a statement.
While Zimbabwe is still not able to tap IMF funding, easing
the restrictions moves it in that direction. The IMF would want
to see a track record of sound policies by the unity government
of President Robert Mugabe and Prime Minister Morgan Tsvangirai
before it agrees to a lending program.
The IMF suspended Zimbabwe’s voting rights in 2003 over
policy differences with the Mugabe government and payment
arrears to the global lender. The voting rights were restored in
2010, allowing Zimbabwe to again participate in IMF
decision-making.
In its statement, the IMF said its board of member countries
agreed there had been “significant improvement in Zimbabwe’s
cooperation on economic policies and renewed commitment to
address its arrears problems.”
IMF technical advice to Zimbabwe will now be extended to
cover tax policy and administration, public financial management
and expenditure policy, financial sector and central bank reform
measures, monetary and exchange policies, and economic
statistics.
The country faces a huge debt burden. Its total external
debt is estimated at $10.7 billion, or 113.5 percent of GDP, at
the end of 2011. More than half of it is in arrears.
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.
However, there are concerns over upcoming elections due next
year given Zimbabwe’s recent history of violent and disputed
elections.
(Reporting by Lesley Wroughton; Editing by Leslie Adler and
Phil Berlowitz)
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