(Adds U.S., Mugabe comments) By Nelson Banya HARARE, Nov 20 (Reuters) - South Africa said on Thursday it will withhold aid for Zimbabwe until a representative government is in place, in what appeared to be the first punitive measure by a regional country to enforce a power-sharing agreement. Toughening its stand, the South African government said it was "extremely concerned" about Zimbabwe's political impasse, which has deepened a humanitarian crisis. It called for mature leadership to resolve outstanding issues. The U.S. ambassaodr to Zimbabwe James McGee said that President Robert Mugabe's grip on power appears stronger now than a year ago and that the humanitarian situation was "really going down the tubes" as more people went hungry, hospitals closed, the school system collapsed and cholera spread. Mugabe's ruling ZANU-PF and the opposition Movement for Democratic Change (MDC) are due to hold another round of talks in South Africa next week to seek a breakthrough. The money being withheld by South Africa -- 300 million rand ($28 million) meant for agricultural assistance -- is a small fraction of foreign aid to Zimbabwe, but carries symbolic weight as a sign of irritation in its powerful neighbour. "This money will be only disbursed once a representative government was in place and in time for the next planting season in April 2009," a statement from the South African cabinet said. Doubts have grown over Zimbabwe's Sept. 15 power-sharing agreement and Mugabe is trying to push through a constitutional amendment allowing him to name a cabinet alone, which could lead to the unravelling of the deal with the opposition. Opposition leader Morgan Tsvangirai has refused to enter the government, accusing Mugabe of trying to grab the powerful ministries. The main obstacle in talks is the issue of who runs the home affairs ministry, which oversees the police. Mark Schroeder, director of risk analysis for sub-Saharan Africa at Stratfor, doubted South Africa's move would sway Mugabe and said the aid move as largely symbolic. "It is not sufficient for them to yield power to Tsvangirai," he said. "It is a small step and could be an initial negotiating stance. But a lot more needs to be done." DASHED HOPES The September deal had raised hopes that a new leadership would get on with the task of rescuing the ruined economy. The stalemate has frustrated Zimbabweans and regional impatience is growing. "We're going to make sure that everything is done to force the parties to go back to the negotiating table," South African cabinet spokesman Themba Maseko told reporters. The power struggle between Mugabe and his old foe Tsvangirai has overshadowed daily hardships including food and fuel shortages and hyperinflation that have driven millions of Zimbabweans out of the country and strained regional economies. The U.S. ambassador said there were now 294 confirmed deaths from a cholera outbreak and a further 1,200 confirmed cases of the disease that can rapidly lead to death if not treated. Zimbabwe's health authorities have cited a lower death toll. "We have a very, very bad situation. I don't see anything that will alleviate these problems until the government of Robert Mugabe starts to act in good faith," McGee said in a video conference call from Harare. "His grip on power may be actually stronger than it was this time last year. Mugabe continues to hang on to power through the political patronage system," McGee told reporters. McGee said the U.S. strategy was to continue piling on targeted sanctions against Mugabe and his supporters and U.S. allies in Europe, Australia and elsewhere would do the same. "We have additional sanctions that we are prepared to roll out," he said without specifying when or what these were. Mugabe said the situation was dire in an address to regional military officers at a graduation ceremony in Harare. "This is the most difficult year, in economic terms, since independence in 1980," he said. Zimbabwe's gold output, which accounts for a third of its export earnings, hit an all-time monthly low of 125 kg in October as economic woes forced more mine closures, a mining official said on Thursday. Mugabe's foes say he has destroyed the country, but the 84-year-old leader, in power since independence from Britain in 1980, says the economy has been sabotaged by forces opposed to his nationalist stance. (Writing by Michael Georgy)
Zimbabwean riot policemen stand in front of doctors and nurses who are demonstrating over the deteriorating health system, outside Parirenyatwa group of hospitals in Harare November 18, 2008 promising to stay ...
