US embassy cable - 03HARARE1209

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