IMF: no lending to Zimbabwe, no loan to Turkey

International Monetary Fund (IMF) Managing Director, Dominique Strauss-Kahn gestures as he addresses students and academics at The University, Witwatersrand, in Johannesburg

The International Monetary Fund is still not prepared to resume lending to Zimbabwe, the head of the body said yesterday, citing concerns about the country’s political situation.
“We are not yet at the point where resuming lending is possible,” IMF boss Dominique Strauss-Kahn told reporters after a two-day visit to South Africa.
He said he discussed Zimbabwe during his talks Tuesday with South African President Jacob Zuma, who said that aid should resume flowing to Harare.
“We are happy to help. We are ready to help, but... as long as the political situation will not make it possible to come back on track in terms of arrears and governance, it will be very difficult for us to come back,” Strauss-Kahn said.
Zimbabwe owes about 140 million dollars in arrears to the IMF.
The organisation last month restored Zimbabwe’s voting rights after a seven-year suspension, but said the impoverished country would not be able to access loans until the arrears are settled.
Zuma, southern Africa’s mediator in Zimbabwe, has lobbied for western nations and multi-lateral lenders to resume aid to Harare, where a unity government took office one year ago to curb political unrest and halt a staggering economic collapse.
In Ankara, Prime Minister Recep Tayyip Erdogan said yesterday Turkey will not sign a loan stand-by deal with the IMF as it does not need emergency funds, ending nearly two years of talks dogged by disagreement on key issues.
“At this point, Turkey’s outlook as a country that is able to stand on its own feet economically has led the IMF to also believe that there is no need for a stand-by deal,” the PM said in televised remarks.
“We have jointly reached the conclusion that there will be no agreement.”
Erdogan cited failure to reach an accord with the International Monetary Fund on many issues as one of the reasons ruling out a loan facility.
“We have principles and it is out of the question for us to make concessions on these. I have already said we would not say ‘yes’ to such demands,” he added.
Erdogan has often accused the IMF of making “political demands” but the Washington-based group has never disclosed details of its differences with the Turkish government.
Turkey and the IMF have been discussing for nearly two years the terms of a fresh stand-by deal since a 10-billion-dollar programme expired in May 2008.
IMF stand-by deals come with conditions attached, setting down guidelines and commitments for recipient governments that can be very unpopular as they usually entail spending cuts to help restore public finances.
The Turkish economy was hit hard by the global economic crisis, with gross domestic product contracting 8.4 percent in the first three quarters of 2009.