March 19, 2009 / 9:50 AM / 10 years ago

Zimbabwe says in talks with West on sanctions

HARARE (Reuters) - Zimbabwe is talking to the United States and European Union over the repeal of sanctions, according to an economic policy document, the first sign the new government may be gaining the confidence of Western powers.

The document released on Thursday by the unity government said political reforms demanded by Western donors were a crucial part of an emergency recovery plan to ease hyper-inflation and widespread shortages of food and fuel.

President Robert Mugabe called for international help for the plan and reiterated a call for sanctions to be lifted.

“I, on behalf of the inclusive government and the people of Zimbabwe, say: ‘Friends of Zimbabwe, please come to our aid’,” he said at the launch of the government’s Short-term Emergency Recovery Program.

It forecast that inflation would fall to 10 percent by the end of 2009 — from over 230 million at last count — due to the use of multiple foreign currencies to replace the almost worthless Zimbabwe dollar.

The document said Zimbabwe has started talking to the U.S., EU, IMF and World Bank over the removal of sanctions.

“In this regard, discussions have already started with the EU, European Commission, World Bank, IMF, and the (African Development Bank) AfDB with the objective of removing the above sanctions and measures...,” the document said.

The government of Mugabe and Prime Minister Morgan Tsvangirai faces the daunting task of rebuilding Zimbabwe’s shattered economy after years of hyperinflation and decline.

While Western powers would prefer that Mugabe step down, they have indicated they can help the country recover as long as a democratic government is in place.

Western donors and foreign investors crucial to rebuilding Zimbabwe want political and economic reforms, such as reversing nationalization plans, before they will pour in cash.

PRIORITY AREAS

“The key priority areas are ... political and governance issues, namely the constitution and the constitution-making processes, the media and media reforms, legislation reforms intended at strengthening governance and accountability and (the) rule of law ...,” said the document.

Much will depend on whether old foes Mugabe and Tsvangirai can work together and persuade skeptical Western countries that they can manage the recovery.

“This is a welcome program but it would require the government to religiously stick to the key principles of respecting the rule of law, upholding the sanctity of property rights and democratic reforms,” said John Robertson, a Harare economic consultant, who met an IMF and World Bank delegation that is visiting the country.

“This will be the major challenge because only then can we be able to convince the international community to release badly needed financial aid.”

The recovery plan will require funding in excess of $5 billion, mostly from donors.

The U.S. and EU have put in place targeted sanctions against certain individuals close to Mugabe and some Zimbabwean companies.

The policy document also warned against continued invasions and takeovers of mainly white-owned farms, saying offenders could be arrested.

Thousands of white farmers have fled Zimbabwe since land seizures began in 2000, a policy that Mugabe critics say helped destroy the economy.

The country’s farmers’ union said some white farmers were still being forced off land or being prosecuted for refusing to leave.

The document said the government wanted to promote confidence in farming and investment in the sector. “The inclusive government will uphold the rule of law as well as enforce law,” it said.

Additional reporting by MacDonald Dzirutwe

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