IMF voting rights: no champagne glasses yet!

The IMF executive board will this month meet to decide on whether to restore Harares voting rights at the Bretton Woods institution in recognition of the effort made by the country to meet its obligations to the organization. But analysts said, while sending a positive cue to the rest of the international community, the restoration of Zimbabwes voting would not make a difference in terms of accessing financing from the Fund. It wont immediately change anything because the country will still need to clear its arrears with the Fund before it can access financing from the IMF, respected economist John Robertson told The Zimbabwean.

Zimbabwe owes the IMF more than US$130 million in arrears accumulated over the past four years. The country managed to clear its outstanding obligations to the Bretton Woods institution in 2006 but immediately allowed the arrears to build up over the past four years. The IMF has insisted that Harare clears the arrears before it becomes eligible for financial aid.

The only thing that may change in the event of the restoration of our voting rights will be the restoration of Zimbabwes pride and the feeling that they can now participate in Fund meetings as full members, said a Harare-based stockbroker. Finance Minister Tendai Biti said last week that the move to restore Zimbabwes IMF rights was in response to positive reforms implemented by the unity government formed last year by arch rivals President Robert Mugabe and Prime Minister Morgan Tsvangirai.

Zimbabwe had its voting rights suspended by the IMF in 2003 over policy differences with Mugabe’s government and payment arrears to the IMF. The country is emerging from a decade of economic decline, which critics of Mugabe blamed on his land reform policies and economic mismanagement that led to hyperinflation. Since the creation of the unity government a year ago, Zimbabwe’s economy is showing signs of recovery with gross domestic product growth at a better-than-expected 4.7 percent in 2009.