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Zimbabwe: Barclays helps Mugabe with US$1 billion

Barclays Bank is helping to bankroll President Robert Mugabe's regime in Zimbabwe, providing millions of pounds of support for his vilified land reforms. Mugabe's opponents describe the bank's activities as a "disgrace" and an "insult" to the millions who have suffered human rights abuses.

Barclays is the most high-profile of three British-based financial institutions providing more than US$1 billion in direct and indirect funding to Mugabe's administration. The other two companies are Standard Chartered Bank and the insurance firm Old Mutual. According to an investigation by influential newsletter Africa Confidential, the organizations provide an economic lifeline keeping Mugabe's regime afloat.

A spokesman for Zimbabwe's main opposition party, the Movement for Democratic Change, likened the bank's actions to its support of South Africa's apartheid regime and urged a boycott.

One of the most controversial of Barclays' Zimbabwe loans is the ?30 million (US$57 million) it provides to a state-sponsored agricultural "facility" aiming to sustain land reforms that saw Mugabe seize white-owned farmland and drive more than 100,000 black workers from their homes.

The government has expelled more than a million opposition supporters from Harare and Bulawayo, dumping them in the countryside.

Britain backs targeted sanctions against the regime -- although there are no economic sanctions -- which prevent Mugabe or his political associates travelling to Europe or the US. It is estimated that Barclays, Standard Chartered Bank and Old Mutual have lent the Mugabe regime about ?100 million (US$195 million) by purchasing treasury bills and government bonds.

Speaking to The Observer from South Africa, Tendai Biti, MDC secretary-general, reacted angrily: "It is immoral and it is criminal. Barclays defended their immoral actions in supporting the apartheid government in South Africa and they seem intent on repeating history in Zimbabwe."

Liberal Democrat chief whip Norman Lamb said: "By going along with the rules provided by the Zimbabwe regime [the companies] become complicit with the actions of Zimbabwe's government and complicit with a corrupt regime ... I struggle to see a justification."

Any bank operating in Zimbabwe must reinvest 40 percent of its profits in government bonds.

Barclays says it has had customers in Zimbabwe for decades and abandoning them now would make matters worse.

A spokesman said: "We have been in Zimbabwe since 1912 and have 1,000 employees serving 150,000 retail, business and corporate customers in the country. We are committed to continuing to provide a service to those customers in what is clearly a difficult operating environment... As with all other banks and businesses, Barclays is required to comply with the regulations of the Reserve Bank. This involves participating from time to time in the purchase of treasury bills and government bonds," he said.
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