The Multinational Monitor


G L O B A L   N E W S W A T C H

Zaire Debts Rescheduled

Western financial institutions have once again rallied to the support of Zaire's President Mobutu Sese Seko. In late June, the International Monetary Fund authorized a three-year loan of $1.1' billion and in mid-July, 12 Western governments agreed to reschedule debts of about $600 million falling due in 1981 and 1982.

The IMF agreement will reinforce Mobutu's "stabilization program," which the IMF claims has made "significant progress." The program has brought down inflation by lifting price controls on goods and services, by liberalizing imports and by devaluing the currency by 40%.

The Western government creditors, principally France,, the U.S., Germany, and Belgium, agreed to spread repayment for the debt over the next 10 years, with a grace period-during which no payments will be required-of four and a half years. These generous terms point not only to the inability of Zaire to pay its debts in the near future, but also to the importance the West places in Zaire as an ally. "We aren't anxious o take steps that would lead to the kind of confusion, turmoil, and bloodshed that occurred in Uganda," says Alexis Rieffel, U.S. Treasury officer for Development Assistance. "Were we to withdraw support from Mobutu precipitously, there would be a breakdown of law and order."

A consistent problem for governments and agencies who lend to Zaire is corruption which, say many critics, drains the aid straight into Mobutu's pockets. The U.S. has given "constant consideration of that problem," Rieffel says, thought he adds that the U.S. has "conflicting objectives. One might be to get rid of corruption; another might be to foster political stability in the country and-in the region."

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