Zimbabwe should use loan for displaced, says opposition

HARARE - Zimbabwe's opposition cautiously welcomed South Africa's decision to offer financial support to its neighbour, but urged President Robert Mugabe to use the money to help those displaced by shantytown demolitions.

"Our immediate concerns must be focused on alleviating the pain and suffering of hundreds of thousands of people on the ground," the opposition Movement for Democratic Change (MDC) said in reaction to the move by South Africa.

"They need food, shelter and clothes as soon as possible," it added in a statement. "We hope that any financial assistance extended by South Africa is immediately channelled towards addressing these basic survival needs."

The United Nations says the authorities' razing of shantytowns and illegal business premises has left at least 700,000 homeless or without a livelihood.

It issued a damning report in July saying the two-month demolition was carried out "in an indiscriminate and unjustified manner, with indifference to human suffering".

Zimbabwe, which insists the exercise was necessary to root out black market trade, said the report was biased and false.

"A direct show of solidarity by the South African Government would engender tremendous hope amongst those who have lost everything as a result of the Zimbabwe government's disastrous policies," the MDC said.

The South African cabinet said it had agreed in principle to provide financial assistance to Mugabe, albeit not as much as the $1 (NZ$1.46) billion touted in local media.

"In principle, the government is open to such assistance, including provision of a loan facility in relation to Zimbabwe's obligations to the International Monetary Fund," government spokesman Joel Netshitenzhe told reporters in Cape Town.

Critics say Mugabe, in power since independence from Britain 1980, has mismanaged Zimbabwe's economy, leading to chronic shortages of foreign currency, fuel and food coupled with record unemployment and one of the world's highest rates of inflation.

The IMF and other donors have withheld financial aid over policy differences with Mugabe's government, especially its seizure of white-owned commercial farms for black Zimbabweans.

The veteran leader has sought help from African countries as well as Arab and Asian countries, under a "Look East" policy.

The IMF's board is due to meet on September 9 to discuss Zimbabwe's $295 million arrears, an IMF official said, adding that Harare last made a payment in June.

South Africa's opposition Democratic Alliance criticised the government's decision, saying a loan would "serve no useful purpose other to prop up the increasingly despotic rule of Robert Mugabe".

If the loan went ahead, parliament should debate conditions to be attached to it, the party said.

But Netshitenzhe rejected speculation that South Africa would impose strict conditions as a way of prodding Zimbabwe into changing its policies. South African leader Thabo Mbeki has faced criticism at home and abroad for his support for Mugabe.

- REUTERS