US and EU dole out funds to cash-strapped Zimbabwe

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The United States is now the latest country to dole out financial aid to Zimbabwe in an attempt to economically stabilize the inflation-ridden African country. President Obama has offered $73 millions in aid to encourage the rule of law, human rights, basic health, and education in Zimbabwe.

In April, Zimbabwe received $400m in credit from African governments. The funds were aimed at helping pay civil servants and regenerating the country’s economy. In May, the World Bank gave Zimbabwe $22 million, its first assistance to the heavily-indebted African country since 2000. On June 3, the European Commission (EC) announced $11.4 million in humanitarian aid to Zimbabwe. The EU executive said the aid will be used to alleviate shortages of water, medicines and other medical supplies.

Early this week, Dutch Prime Minister Jan Peter Balkenende had told the Zimbabwean premier that while the Netherlands would give Harare humanitarian aid, it would not release reconstruction funds unless serious political and economic reforms were first implemented.

Economic experts say that Zimbabwe needs $10 billion in aid to significantly stabilize its economy. Zimbabwe’s Finance Minister, Tendai Biti said the financial aid could help Zimbabwe’s economy grow by about 6% this year. “I think we will be able to achieve a growth rate of at least 6%, although conservatively it will be 4% in 2009,” the Finance minister said, speaking at the World Economic Forum on Africa in Cape Town. The Zimbabwe economy has been battered by years of hyperinflation. Zimbabwe’s Prime Minister, Morgan Tsvangirai is on an international tour to seek aid.

US president, Mr. Barrack Obama has said the power-sharing coalition between Tsvangirai and President Robert Mugabe in February, is showing promise, following what he termed the very dark and difficult period the country had been through.

Later this month, Prime Minister Tsvangirai is scheduled to meet with EC executives to brief them on the progress made thus far by the inclusive Government formed on September 15, 2008 by Zimbabwe’s three main political parties. In 1999, the International community turned off financial aid to Zimbabwe until tangible signs of respect for human rights, the rule of law, and macro-economic stabilisation was shown.

Speaking at the White House in Washington, with the visiting Zimbabwe Prime Minister, President Obama also expressed his admiration for the courage and tenacity shown by Mr Tsvangirai, the leader of the former opposition Movement for Democratic Change in Zimbabwe.

According to Business reporter, Jorn Madslienthe Zimbabwean economic problem is a challenge of biblical proportions. Most of Zimbabwe’s schools and hospitals are closed, its roads and sewers are in tatters, and at least eight in 10 people out of work; there is no shortage of areas where expenditure can be clocked up. According to the Economist Intelligence Unit, the impact ofthe global downturn on Zimbabwe has been particularly severe, leading to the collapse of basic infrastructure, especially electricity and water supplies.

Zimbabwe’s president, Mr. Robert Mugabe is still the subject of a travel ban, his assets have been frozen by the United States and the European Union.

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