FINANCE Minister Tendai Biti has urged the United States to re-engage with Harare, warning that sanctions imposed by the West are hurting ordinary people and not President Robert Mugabe.

"Your foreign policy could be better, you don't deal with trouble states by disengaging. You must engage strategically to assist the people of Zimbabwe," Biti said in Washington on Thursday.

He was addressing the Atlantic Council, a Washington think-tank and policy group, on progress made in Zimbabwe’s economic recovery and how to move the country out of its current political impasse.

A top official in Prime Minister Morgan Tsvangirai’s MDC-T party which joined government in a coalition with Mugabe’s Zanu PF after inconclusive elections in 2008, Biti has found sanctions imposed by the West a major stumbling block in efforts to turn-around the country’s economy.

Hopes for the resumption of Western aid and increased investment flows following the formation of the coalition government have largely been dashed, with critics blaming Mugabe’s presence in the administration where his Zanu PF party also holds clear sway.

But Biti said the West should ignore divisions in the coalition government and support efforts to help the country recover from a decade-long recession.

"Don't look at politicians, don't look at Robert Mugabe and Zanu PF, look at the ordinary people. The wait-and-see attitude is very retrogressive," Biti said

The US and European Union (EU) countries slapped Zimbabwe with sanctions over a decade ago accusing Mugabe of human rights abuses and electoral fraud. The Zanu PF leader denies the allegations and claims he is being punished for economically empowering his people.

Biti said Zimbabwe, which defaulted on its foreign obligations in 1999, was being crushed by a US$9.1 billion debt and needs some US$14 billion for rehabilitation and development.

"This is part of the things we are battling with on this trip. How do deal with the issue of the crippling sovereign debt? There is no way that we are going to be able to generate these funds," he said.

Treasury had also expected a US$600 million boost in 2012 from diamond sales but some of the companies operating in the controversial Marange fields were slapped with sanctions by the US.

Biti said he had not received any money from diamond sales in the first quarter of the year.

"But (the) question is, is there smuggling and stealing? People talk about that, I don't have evidence of it so I am not excluding it or including it."

Biti also said there was no money for polls Mugabe says must be held today insisting the government could not start worrying about funding elections when it could not pay civil servants.