Zimbabwe makes pledges to get $193m from IMF (fwd)

[Robert Weissman <rob@essential.org>]

Zimbabwe in letter to IMF pledges 1.2 percent growth this year
Date: Mon Aug 02 20:00:12 CDT 1999

   WASHINGTON, Aug 2 (AFP) - The IMF on Monday approved a 193 million-dollar
credit for Zimbabwe after authorities there pledged to curb inflation and
provided details on military spending.
   Zimbabwe Finance Minister Herbert Murerwa, in a letter to the
International Monetary Fund outlining 1999 government economic policies,
disclosed that the country's military campaign in the Democratic Republic of
Congo (DRC) would cost three million dollars a month this year, or 0.6
percent of gross domestic product.
   The country spent 1.3 million dollars a month on DRC campaign last year
but was forced to increase the allocation to pay for the deployment of
additional troops, according to the letter, posted on the IMF web site.
   Zimbabwe is estimated to have sent some 10,000 troops to the DRC to
support the Kinshasa government against rebels who launched an insurgency
one year ago.
   Murerwa said in the letter that "the DRC is covering the bulk of the cost
of our military involvement, ... which includes fuel, transport and
ammunition."
   The IMF in June froze its assistance to Zimbabwe after the government
committed 3,000 more troops to the DRC, an IMF source said in the Zimbabwean
capital Harare.
   Fund officials then pressed for clarification on the government's
military spending, he said, adding that Zimbabwe authorities were irritated
by the request.
   In a statement accompanying Monday's announcement of the credit,
Shigemitsu Sugiaski said the Fund executive board "noted the risks that
Zimbabwe's military involvement in the Democratic Republic of Congo posed to
fiscal and balance of payments performance and the
stabilization more generally."
   Elsewhere in the letter of intent, Zimbabwe set an overall growth goal
this year of 1.2 percent, down from 1.6 percent in 1998, and an inflation
rate reduced to 30 percent from 46.6 percent last year.
   The IMF said the downward revision in gross domestic product was
attributable to lower output in the mining and manufacturing sectors.
   The country's current account deficit will be limited to 6.3 percent of
GDP this year, under the program and the budget deficit to 5.3 percent.
   In addition, the government will pursue tight monetary policies, continue
with land reform on the basis of fair compensation and reduce the civil
service from 163,986 employees to 149,600 by the end of 1999.
   A privatization effort will be accelerated, the exchange rate will be
determined by market forces and import tariffs will be scaled back,
according to the letter of intent.