By MacDonald Dzirutwe
HARARE (Reuters) - Zimbabwe's President Robert Mugabesigned a power-sharing agreement with opposition rival MorganTsvangirai on Monday, giving up some of his powers for thefirst time in nearly three decades of iron rule.
The deal followed weeks of tense negotiations to end a deeppolitical and economic crisis compounded by the veteranleader's unopposed re-election in a widely condemned vote inJune. Under the agreement, Tsvangirai will become primeminister.
"This agreement sees the return of hope to all our lives,"Tsvangirai said after the signing ceremony.
Zimbabweans hope the agreement will be a first step inhelping to rescue the once prosperous nation from economiccollapse. Inflation has rocketed to over 11 million percent andmillions have fled to neighbouring southern African countries.
Cheers greeted the signing of the deal at a Harare hotel byMugabe, Movement for Democratic Change (MDC) leader Tsvangiraiand Arthur Mutambara, who leads a breakaway faction of the MDC,the main opposition party.
The three smiling Zimbabwean leaders exchanged copies ofthe agreement and shook hands in front of South AfricanPresident Thabo Mbeki, who brokered the deal, and other Africanleaders.
Raising hopes that Western support will come quickly, theInternational Monetary Fund encouraged the new government toshow clear policy commitments to tackle the economic crisis.
"We stand ready to discuss with the new authorities theirpolicies to stabilise the economy, improve social conditions,and reduce poverty," IMF Managing Director DominiqueStrauss-Kahn said in a statement.
Mugabe, 84, made clear he would not tone down his attackson Western countries such as former colonial power Britain. Heaccuses them of backing the opposition to drive him from power.
"African problems must be solved by Africans ... Theproblem we have had is a problem that has been created byformer colonial powers," Mugabe said after the signingceremony, as Tsvangirai looked uncomfortable.
But Mugabe added: "We are committed to the deal. We will doour best."
WESTERN COUNTRIES WATCHFUL
Western countries want to see how the deal works inpractice, but the European Union said on Monday it stood readyto bring aid to Zimbabwe if the new government took measures torestore democracy and the rule of law.
British Foreign Secretary David Miliband welcomed theagreement but said its details would be studied carefully.
"The new government needs to start to rebuild the country.If it does so, Britain and the rest of the internationalcommunity will be quick to support them," he said.
Under the deal agreed last week, Tsvangirai will becomeprime minister and chair a council of ministers supervising thecabinet. Mugabe, who has ruled since independence in 1980, willremain president and head the cabinet.
The deal is expected to split control of the powerfulsecurity forces that have been key backers of Mugabe.
The president, a former guerrilla commander, is likely tokeep command of the strong army, but the MDC wants the police.Mugabe's ZANU-PF will have 15 cabinet seats, Tsvangirai's MDC13 and Mutambara's splinter MDC faction three seats.
Analysts say the power-sharing deal is fragile and willrequire former enemies to put aside their differences and workclosely to overcome scepticism, especially from Western powerswhose financial support will be vital for recovery.
International aid agency Oxfam group called on foreigncountries to make a long-term investment in Zimbabwe.
"The international community must not just throw money atthis problem then walk away and say 'job done'," said CharlesAbani, regional director for Oxfam in Southern Africa.
To gain the confidence of Zimbabweans, the new leadershipmust present a formula for knocking down prices and easingsevere food, fuel and foreign currency shortages.
"While it might be too early to predict the first policysteps of the new government, we think tackling inflationarypressures by reducing the money supply should be one of the toppriorities," said Samir Gadio of investment bank RenaissanceCapital.
ZANU-PF and MDC negotiators met early on Monday to allocatethe 31 ministries. Names of the ministers are likely to beannounced later in the week, a government official said.
(Additional reporting by Nelson Banya in Harare; LesleyWroughton in Washington; Ingrid Melander in Brussels; AdrianCroft in London; Writing by Marius Bosch and Michael Georgy)
