Economy: Zimbabwe Challenged to Restore Trust

Published on 5th May 2009

This is an edited version of HOT SEAT INTERVIEW in which Journalist Violet Gonda speaks to Finance Minister Tendai Biti,on his foreign trip to drum up financial support for Zimbabwe 's unity government. Finance Minister, Tendai Biti stopped over in London recently to meet UK officials on his way back from a US fundraising trip. This was the first time US and UK government officials have directly engaged with a Zimbabwean government minister for some years.


GONDA: What was the purpose of your visit? Was your trip was successful?


BITI: The trip was a routine annual meeting of the World Bank and IMF, called the Spring Meeting. And as Finance Minister, I am a governor on the IMF board, so I am obliged to attend. That was the first aspect – the technical institutional obligation to attend those meetings.


The second level of the meeting was interaction with SADC Ministers of Finance who are also governors of the IMF. The issue was to ensure that we dealt with our SADC issues, in particular the issue of pledges - the resolution of SADC made at Lozitha Palace in Swaziland on 29th March 2009.


The third aspect of the meeting was re-engagement with the American government. It's been a very, very long time since a government minister from Zimbabwe re-engaged with the American government. The American establishment has three parts: the State Department which (the bureaucrats); the Presidential office (the National Security Council) and the Hill, (congress people and senators).


Then lastly engagement with the broad international community that was there - Finance Ministers and Development Ministers from Europe, South East Asia, India and so forth.


I passed through the United Kingdom where I met Lord Malloch-Brown, the Minister for Africa and David Milliband, the Secretary for International Relations and again the message has been the same, that they will re-engage and that there will be support for Zimbabwe. So yes, the meeting and the visit has been extremely successful.


GONDA: At the IMF, it was agreed that a multi-donor trust fund will be set up. Can you tell us how this will be set up, operate and what it is about?


BITI: The IMF has nothing to do with the multi-donor trust fund. The multi-donor trust fund will be set up between the government of Zimbabwe , the World Bank, the African Development Corporation and the UNDP. The UNDP, World Bank and African Development Bank will form the trinity that will receive funds from donor funding into Zimbabwe with us being part of that, particularly on the demand side.


This vehicle is essential because the donor community has not yet re-established trust with the transitional government, a loss that  arose from the abuse that it has suffered in the past, in particular, the rape of the economy that was conducted by the Reserve Bank, the loss of systems and the invasion of accounts. So until such time we have restored trust and confidence the multi-donor trust fund will be the vehicle in respect of funding.


GONDA: How much money are you expecting from this fund?


BITI: First you've got donations and pledges from the SADC region, those will not go into the multi-donor trust fund, but come directly to the Zimbabwean government. And in the case of lines of credit, those will go to the different countries’ respective banks.


OECD countries like the United Kingdom  and United States of America will operate at two levels. Firstly is how they've always operated in the past, namely- humanitarian assistance through the UNDP.  In addition, they will also choose a particular project to fund, for instance, water and chemical treatment or electricity. The monies will come specifically for a particular institutional or infrastructural project and it will be handled either at embassy level or at some bi-lateral instrument that we will create with the particular funder.


Then you have beyond the humanitarian plus-plus you'll have amounts for specific budgetary assistance which again will be channelled at bi-lateral level. Then you've got those countries that have expressed an eagerness, particularly the Nordic countries, to actually help us with a certain specific aspect of our budget and this is where the multi-donor trust fund will be important.


Whatever money we get will be important. There are two things - what money have I been promised and what money do I expect. You need to get this economy to where it was in 1996, you need about US$45 billion in the next five years and obviously within the context of the global economic downturn, you're not going to get that money. The short term emergency recovery programme that we have launched requires US$10 billion to support but obviously, those are huge amounts within the current context.


However, the pledges we've obtained should be OK for 2009. We should not have a budget deficit in 2009 and I'm in fact hoping that we might actually have a budget surplus. Our budget for 2009 is US$1 billion.


GONDA: At what particular point do you actually envisage your ministry, or the government taking complete control of this trust fund for example? When will they give Zimbabwe direct funds?


BITI: It's a question of confidence and trust. There are a number of things we have to do to establish our own track of credibility, we need to show our own road map of credibility and it is important that we attend to the toxic issues around the Global Political Agreement - the unfinished business of the Global Political Agreement in particular the issue of ambassadors, the issue of permanent secretaries, the issue of provincial governors, the issue of Gono and the issue of Tomana. These are not negotiable, they have to be resolved.


Then at institutional level, as Ministry of Finance, we have to reform our accounting system, our public finance management system. It is important that we get this on the ground, it is important that we have the correct software. Our public finance management system had been vandalised by the use of zeros. No system can take 12 zeros or 24 zeros. Reform of the public finance management system is critical.


The second thing is the reform and credibility of the Reserve Bank. The Reserve Bank had become a predator. We have to rationalise it and make it a decent institution in our economy. The third thing is of course the Zimbabwe Revenue Authority. We have to improve on our tax administration and structure. In short, let us show that we are bankable. I'm quite sure that by July/August, we will have shown them that the new dispensation can be trusted and worked with.


Even the funds that we are getting from our friends in the region, they are insisting that they have to be used for a particular purpose because in the past there has been abuse. A lot of atrocities have been committed in terms of accounting and transparency. Unfortunately, we are victims of history, we are being judged on past omissions and commissions. We have to show our own clean slate and our own track record of credibility, our own regiment of honesty and transparency and I can assure you we will not be found wanting.


GONDA:  You mentioned  re-engaging with the Americans again after a very long time. The State Department issued a rather sad statement saying they have not seen the reforms that they actually want. Given the fact that you don't have control as the MDC, you don't have control of Defence, and only have partial control of the police force and also considering that you've not fully implemented the GPA as you mentioned earlier and struggling to get basic things you've agreed on -in terms of the Global Political Agreement - how does this affect the United States' perception of your position as an equal partner in government and how does it relate to the lifting of ZIDERA?


BITI: I had excellent meetings on both fronts in terms of re-engagement. You can't run away from the concerns and the concerns are simply two-fold. Firstly we have been abused by this country called Zimbabwe . There's been dictatorship in Zimbabwe and there's been no playing according to the rules of the international community. How do we trust and how do we guarantee that the interim government is a basic ruse to get pressure off a regime that is bent and intent on proceeding and working on its own terms? How do we ensure that you are not just junior partners that are being used to sanitise a regime? Those are genuine questions.


Secondly there is a genuine concern on how do we guarantee that whatever money we put in goes to prop up the pillars of dictatorship and more importantly don't reach the intended purposes? You have to demonstrate that there has been a recalibration of mentality. You have to show that there's been a fundamental paradigm shift and you can only show there's been a paradigm shift, by action and performance.


We have to be honest with ourselves. No-one out there owes us anything. We want re-integration in the international community. We don't have an overdraft facility with anyone out there so we have to show that we are a bankable project.


GONDA: So do you have any idea what the stumbling block is and what the progress is in terms of the talks and the issues that you have highlighted - the issues of the permanent secretaries, Roy Bennett and other issues that were agreed on when the government was formed but have not been implemented yet?


BITI: There's been no decent progress to date and we are running out of excuses because this government is now over two months old. Let's tell each other the truth. Are we interested in making this work or not? Some of us are and that's why we are still in it but we should not be taken for a ride by other people with their own ulterior motives. We have to put our foot on the ground and make sure we resolve these issues once and for all. You cannot have a situation where some of us are working day in day out to try and undo

the legacy of insanity of the last decade and others are busy rebuilding the foundations of that insanity. It's not fair to us as individuals and it's not fair to Zimbabweans.


GONDA: That was Finance Minister Tendai Biti speaking to us from Heathrow Airport on his way back to Zimbabwe.


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