Zimbabwe: IMF ready to talk

"Today’s power-sharing deal in Zimbabwe paves the way for a new government that can begin to address the economic crisis," Strauss-Kahn said in a statement.

"We stand ready to discuss with the new authorities their policies to stabilise the economy, improve social conditions, and reduce poverty."

Under a historic deal signed on Monday President Robert Mugabe will share power with his arch-rival Morgan Tsvangirai in a bid to resolve the political crisis in a country in economic meltdown.

The IMF effectively suspended its dealings with Zimbabwe after a delegation paid a fact-finding visit to Harare in December 2006, when the southern African country only narrowly avoided expulsion from the organisation.

Strauss-Kahn said in his statement: "I encourage the government to take steps to show clear commitment to a new policy direction and to seek the support of the international community."

Over the past decade, Zimbabwe’s economy has collapsed with the world’s highest inflation rate, chronic shortages of foreign currency and food, skyrocketing unemployment and widespread hunger.

Shortly after signing the deal at a ceremony in the Zimbabwean capital, the 84-year-old Mugabe said he was "committed" to working with longtime rival in the new government.

"Let us be allies," said Mugabe, who has ruled the country since independence from Britain in 1980.

The IMF has in the past expressed concerns about the central bank in Harare, accusing it of over-printing bank notes in order to finance government expenditure.

Under Monday’s deal Mugabe will remain president while Tsvangirai, who leads the Movement for Democratic Change (MDC), will serve as prime minister.

But President Thabo Mbeki, who brokered the deal, later said the unity government had not yet been finalised, calling on the two parties to do so as soon as possible.

While questions remain over whether the power-sharing deal can work in practice, Mbeki has expressed confidence it will allow Zimbabwe to address the economic meltdown.

– Sapa-AFP