Zimbabwe's MDC holds out on signing memorandum

By Stella Mapenzauswa

JOHANNESBURG (Reuters) - Zimbabwe's main opposition party said it would not sign an accord paving the way for talks to end a political crisis until mediator South Africa addressed its concerns, but regional officials on Sunday appeared optimistic a breakthrough was possible.

Pressure has been building for a negotiated settlement to the dispute over Zimbabwe's June 27 run-off election, which President Robert Mugabe won by a landslide after his challenger, Morgan Tsvangirai, pulled out citing violence and intimidation against his supporters.

The post-election tension and uncertainty has worsened the country's already desperate economic situation, with inflation of well over 2 million percent, chronic shortages of basic food and other commodities, and unemployment at about 80 percent.

On Sunday both sides publicly appeared to be digging in on their positions.

Mugabe's government took aim at Western countries supporting sanctions against Harare's ruling elite by saying it would transfer ownership of Western-owned firms to locals and investors from "friendly countries", Zimbabwe's state-owned Sunday Mail newspaper said.

Mugabe's spokesman George Charamba confirmed the government's drive against Western firms, which it has in the past accused of creating false shortages of basic commodities and unnecessarily pushing up prices.

"We are anxious to understand the behavior of corporate bodies and whether this (shortages and price hikes) owes to market imperatives or political obligation of the foreign investors," Charamba told the Sunday Mail.

For its part, the opposition Movement for Democratic Change (MDC) said on Sunday it would not sign a deal paving the way for talks with Mugabe's ruling ZANU-PF until South African President Thabo Mbeki, who has mediated the crisis, addressed its concerns over guidelines on substantive negotiations.

"I think in principle the decision is to sign the document. We are committed to the dialogue process," MDC spokesman George Sibotshiwe told Reuters.

"Our executive and council have already gone through the document and have raised their concerns with the facilitator ... the onus is on the facilitator to ensure that those things are sorted out in order for the signing to happen within the required time."

The MDC has refused to recognize Mugabe's victory, insisting Tsvangirai won the first vote outright in March, although official figures showed he did not get the absolute majority needed to avoid a run-off.

TSVANGIRAI READY TO SIGN?

MDC sources had said on Saturday Tsvangirai might sign a memorandum of understanding on talks as early as Monday.

Asked whether a signing was likely on Monday, Sibotshiwe replied: "I cannot answer that. (Mukoni) Ratshitanga, the spokesperson for President Mbeki, is the only person who can respond to that."

Ratshitanga said he was not aware of any plans for Mbeki to travel to Zimbabwe "any time soon".