The FT has an interesting piece on Western governments’ new attitude towards Zimbabwe. They write that “Zimbabwe is close to striking a landmark deal with western multilateral institutions that would see it clear billions in arrears of unpaid debt, access new funds for its troubled economy and end more than 15 years of international isolation.”
I find this odd. Why are Western governments suddenly so eager to work with a pariah state like Zimbabwe to get back in the good graces of the international community? As Nelson Chamisa, an opposition MP, noted, “re-engagement would “embolden the dictatorship” and weaken the opposition. ‘Zimbabweans cannot understand why there’s been an easing of the pressure . . . Nothing has changed.'” Indeed, nothing has changed on the surface.
Mugabe is 91 years old and there will clearly be a change of power sooner or later. The article mentions that but it still isn’t obvious to me why the change of heart. Zimbabwe owes the IMF over $100 million and it has been in “continuous arrears” since 2001. And that’s just the beginning. It also owes the World Bank about $1.2 billion and $600 million to the African Development Bank.
Western governments tried to pressure China to pony up new loans to help Zimbabwe out but they wisely said no deal. Somehow the new negotiations involve Algeria lending the dysfunctional government $900 million. I’m not even sure where to start with this. Why is Algeria, a very poor country, loaning another poor (and poorly managed) country $900 million? How does Algeria even have that much money just laying around that it can loan it out? And what do Algerians have to say about the worst loan idea ever? Clearly the Zimbabwean government doesn’t have a stellar track record on loan repayment, so why would any government want to loan them more? Especially an underdeveloped one that could obviously use those $900 million at home.
So what’s really going on here? Is Algeria being pressured to loan this money? If so, why? If not, what are they expecting as a reward for doing so? They clearly aren’t loaning the money altruistically or in expectation of huge financial dividends.
Does anyone have any ideas or backstory to this news?