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'You will take away the future of your children,' Zimbabwe warned
12 Jun 2014 at 10:08hrs | Views
Harare - The World Bank's outgoing country economist for Zimbabwe, Nadia Piffaretti, said the country should avoid the securitisation of minerals to get loans.
Piffaretti said if the country was to follow that route, it might end up giving away more than it will be getting.
"You will take away the future of your children and therefore securitisation is not advisable," she said, adding that the country should instead go for concessional loans to stimulate the economy.
"You sit down and negotiate on penalties and interest rates. It's even better when you get a grant.
"When you start securitisation, there are many issues and typically securitisation is legitimately pulling the tool box, but it is not advisable as a panic button because that typically leads to things that are not in the country's interest."
Securisation of minerals is one of the options the debt-ridden Zimbabwean government is considering to get loans.
Economic crisis took its toll
Meanwhile, Piffaretti said Zimbabwe had missed out on investments and developments which were targeted for emerging economies as it was experiencing an economic crisis.
"There has been a global shift towards greater investment around the developing world and this has grown tremendously, but unfortunately it happened in the past 10 years when Zimbabwe was in crisis," said Piffaretti.
She added Zimbabwe is not yet a globalised country because of the wasted decade, and the country needs to do further homework to ensure it catches up.
Piffaretti said Zimbabwe's economy will grow 3.1% on the back of a stronger agricultural sector. "The bad news is that the urban side economy will suffer a little more as all the fundamentals, such as credit, are pointing southwards."
The World Bank has been engaged in negotiations with the Zimbabwean government on how to broaden economic reforms and develop the economy in a more balanced way.
Piffaretti said if the country was to follow that route, it might end up giving away more than it will be getting.
"You will take away the future of your children and therefore securitisation is not advisable," she said, adding that the country should instead go for concessional loans to stimulate the economy.
"You sit down and negotiate on penalties and interest rates. It's even better when you get a grant.
"When you start securitisation, there are many issues and typically securitisation is legitimately pulling the tool box, but it is not advisable as a panic button because that typically leads to things that are not in the country's interest."
Securisation of minerals is one of the options the debt-ridden Zimbabwean government is considering to get loans.
Economic crisis took its toll
Meanwhile, Piffaretti said Zimbabwe had missed out on investments and developments which were targeted for emerging economies as it was experiencing an economic crisis.
"There has been a global shift towards greater investment around the developing world and this has grown tremendously, but unfortunately it happened in the past 10 years when Zimbabwe was in crisis," said Piffaretti.
She added Zimbabwe is not yet a globalised country because of the wasted decade, and the country needs to do further homework to ensure it catches up.
Piffaretti said Zimbabwe's economy will grow 3.1% on the back of a stronger agricultural sector. "The bad news is that the urban side economy will suffer a little more as all the fundamentals, such as credit, are pointing southwards."
The World Bank has been engaged in negotiations with the Zimbabwean government on how to broaden economic reforms and develop the economy in a more balanced way.
Source - Fin24
