Zimbabwe close to Russian bailout
Robert Mugabe will travel to Russia this weekend to discuss a $10 billion bailout
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Thursday, 15, Jan 2009 06:55
By Zimbabwean staff writer.
Zimbabwean president Robert Mugabe has been promised a massive financial rescue package by 'friendly countries', among them Russia and India, and is now confident to forge ahead and form a new government excluding the opposition, top government officials said.
The government has already struck a deal with Indian investors to pour billions into the diamond sector while Mugabe is expected to visit Russia on January 17th to negotiate an economic rescue package underwritten by diamond rights, inthenews.co.uk was told.
A government delegation that visited India last month managed to strike a deal with New Delhi's investors to pour billions into the country, mainly in the diamond-cutting and processing business.
"Indian investors are expected in country anytime to chart away forward on joint venture projects with the government in the diamond sector and others. A government delegation was in that country last month," industry and trade minister Obert Mpofu confirmed.
As a result, presidential spokesperson George Charamba noted that the opposition Movement for Democratic Change (MDC), which he said was banking on an anticipated collapse of the economy, "will get a rude awakening when the rescue financial package arrives".
"Zanu-PF [Mugabe's party] is confident and the president will forge ahead and form a new government.
"The tables are turning and it won't be long before we get a massive economic package from friendly countries to revitalise the economy.
"If the MDC believed they could bank on a decaying economy, the carpet will soon be swept from under their feet as an economic package to revive the economy is on the way."
Zimbabwe has rich diamond reserves in the Chiadzwa, Mutare in Manicaland, about 260km from Harare. In November the government launched a military style operation to flush out illegal diamond dealers, in preparation for the Indian and Russian investors.
The army-led operation turned Chiadzwa into a war zone as soldiers, aided by helicopter gunships, cracked down on the illegal diamond dealers, leaving almost 200 dead.
Diamonds were discovered in the area in 2006 and, according to the central bank, the country is losing almost $200 million a month through illegal diamond dealings.
Mr Charamba said Mugabe would visit Russia to negotiate a financial package that sources put at over $10 billion (£6.84 billion) to lift the comatose economy.
"The package is a way of bursting the demonic western sanctions," he said.
"The way forward is that come February, the new government will be formed with or without the MDC. The country now cannot be held hostage by the MDC."
Zimbabwe has had no government since June despite a power-sharing agreement signed between Mugabe's Zanu-PF and the MDC led by Morgan Tsvangirai.
Mr Tsvangirai has refused to join a unity government with Mugabe in protest over the latter's refusal to share executive powers and key cabinet portfolios with the opposition.
Analysts say the unity government is the first key step to lift Zimbabwe out of its current economic crisis. It has had no access to foreign currency from the west and international finance institutions like the International Monetary Fund (IMF) since lines of credit to the country were cut because of Mugabe's misrule.