The International Monetary Fund gave Zimbabwe a six-month reprieve from its threat to expel the cash-strapped African country, sparing President Robert Mugabe -- for now, at least -- from diplomatic humiliation.
The deferral of the proposed expulsion was announced last night following a meeting of the IMF's executive board, which represents the fund's 184 member countries. The board gave Zimbabwe credit for making partial payment on its overdue debts and for taking "initial" steps to comply with the fund's economic prescriptions. The board will consider the matter again "within six months," the IMF said.
Expulsion from the IMF -- "compulsory withdrawal," in the fund's parlance -- is a punishment that no country has suffered since Czechoslovakia was booted out in 1954. By forestalling the move, Mugabe has managed to avoid deepening the international isolation his government has experienced for cracking down on dissent and other human rights violations.
To avert expulsion, however, Mugabe had to pay a stiff price, scraping together $120 million in foreign currency to reduce his country's arrears, which still stand at about $175 million. He also had to allow fuel prices to rise and relax the state monopoly on certain imports.
The Zimbabwe economy is in a state of virtual collapse, with food, fuel and other vital commodities in increasingly short supply and inflation well above 200 percent. The economy has been contracting steadily since 2000, when the government, proclaiming its intention to reverse economic injustices perpetrated during colonial rule, initiated a violent campaign of seizing white-owned farms and handing them over to black citizens.
The decision by the IMF does not mean that it will provide Zimbabwe with the loans of hard currency it desperately needs to revive its economy. The fund has not lent to Zimbabwe since 1999, and it suspended the country's voting rights in 2003.
But yesterday's decision, the IMF said, "provides Zimbabwe with a further opportunity to strengthen its cooperation with the IMF in terms of economic policies and payments."
The country's central bank governor and finance minister have stressed the importance of restoring ties with the fund. But Mugabe, apparently conflicted about whether rapprochement is worthwhile, has maintained a defiant stance.