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Last Updated: Wednesday, 3 August 2005, 18:20 GMT 19:20 UK
South Africa to bail out Zimbabwe
Chinese President Hu Jintao (l) and Zimbabwe's President Robert Mugabe (r)
As western support has dried up, Mr Mugabe has looked to Asia
South Africa's cabinet has agreed in principle to provide financial assistance to neighbouring Zimbabwe.

A government spokesman said on Wednesday a loan would allow Zimbabwe to resume IMF payments and prevent their expulsion from the body.

But he dismissed reports the credit could be $1 billion, saying it "could even be as low as one-tenth of that".

Last week, the finance minister said he did not want a failed state where people died of hunger as a neighbour.

Mr Mbeki has always been reluctant to publicly criticise President Robert Mugabe's rule.

Following a failed harvest, Zimbabwe is suffering food shortages.

It has been short of foreign currency for imports such as fuel for several years.

Mr Mugabe's critics say his seizure of white-owned land have wrecked the country's agriculture-based economy.

He blames his problems on a Western plot.

Last week, Mr Mugabe visited China seeking financial assistance but he did not obtain the help he had hoped for.

South African newspapers reported that Mr Mugabe was only granted $6m for grain imports by Beijing.

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