Australia will bail Zimbabwe out on one condition

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Australia government could become the first Western country to offer financial help to Zimbabwe.

On Wednesday Foreign Affairs Minister Stephen Smith said in a statement, “Australia will provide $10 million to help Prime Minister Tsvangirai and the so-called inclusive Government of Zimbabwe to restore basic water, sanitation and health services and relieve the suffering of the Zimbabwean people”.

Australia’s assistance to Zimbabwe to date has been limited to humanitarian aid, it added.

Australia previously gave Zimbabwe humanitarian assistance through aid agencies, but did not provide direct funding to the government headed by President Robert Mugabe. Smith said Australia recognised there were risks to the new policy and was “under no illusions about the fragility of the political situation in Zimbabwe”.

Last week president Barak Obama extended sanctions on Zimbabwe by a further one year.

While, political analysts speaking to say the move signalled a policy shift this does not mean their misgivings are over. “This is certainly a first since the onset of the crisis and one can anticipate more such action from countries that have previously refused to deal with the Mugabe government,” John Makumbe said.

“This does not mean that their misgivings are over. It’s an indication of the goodwill they are willing to extend, provided there is a change in direction, in many respects, by the new inclusive government”.

Zimbabwe’s new unity government will be heavily dependent on Western donors and investors to rescue the crippled economy suffering from 90 per cent unemployment, hyperinflation and shortages of most basic goods. Tsvangirai has indicated that rebuilding the economy could cost as much as $5 billion.

On Tuesday the International Monetary Fund said it could not disburse funding to Zimbabwe until the country’s arrears have been cleared and it demonstrated responsible economic policies.

Smith hinted on Tuesday that Australia may change its policy towards Zimbabwe and help the Prime Minister Tsvangirai, rebuild its shattered economy. But he also said that there must be an intensive inquiry into the car crash that injured Tsvangirai and killed his wife before any “insidious undertone” could be ruled out.

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