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Zambia: where capitalism cuts lives ten years short

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'WE WILL not force countries onto our programmes.'
Issue 1904

‘WE WILL not force countries onto our programmes.’

Horst Kohler, managing director of the International Monetary Fund (IMF)

‘IF ZAMBIA doesn’t sell the ZNCB bank then they will not get the money.’

Mark Ellyne, IMF resident representative in Zambia

CAPITALIST GLOBALISATION is driving the poorest countries deeper into poverty, according to a new report for the United Nations’ development agency. The fate of the African country of Zambia shows how a real weapon of mass destruction has torn apart people’s lives. The weapon is debt, and the people launching it are the same ones who ordered the assault on Iraq.

A second devastating new report, from the World Development Movement (WDM), shows how Zambia’s 10.5 million people are seeing their children die as a result of the economic stranglehold of the IMF and the World Bank. The US dominates these bodies and has enough votes to veto all decisions. The British government also holds key positions.

Chancellor Gordon Brown chairs the IMF’s key finance committee. Hilary Benn, the International development secretary, is on the board of the World Bank. They continue to demand policies which spell death for Africans. Money that should go to health and education is sucked out to repay debts.

In order to attract continued ‘support’ from banks and donations from government agencies, successive Zambian governments have been pressured to strip away any pretence of social protection. As in so many other parts of the Third World, Zambia’s economy has been kidnapped.

In 1960 average Zambian life expectancy was 41.6 years. Today it has slumped to 33.4. One in five Zambian children dies before they are a year old. Zambia began borrowing from the IMF and the World Bank because its economy suffered two shattering shocks in the 1970s.

First the price of the oil and manufactured goods it imported rose steeply. At the same time the money it received from exporting copper and agricultural goods slumped. As the WDM report says, ‘In return for loans, Zambia was required to implement World Bank and IMF-endorsed economic policies over three decades. This period is a sad story of increasing debt, economic stagnation or collapse, and social crisis. Zambia’s total external debt rose from $814 million in 1970 to $3,244 million by the end of the decade. The situation then further deteriorated, with Zambia’s external debt more than doubling to $6,916 million by the end of the 1980s.’

There has been much talk of how countries like Zambia are now being given ‘debt relief’. Yet it has received only just over 5 percent of the reduction it is supposed to get under the much vaunted Heavily Indebted Poor Countries (HIPC) initiative. The rest is dependent on Zambia speeding up its surrender to economic blackmail. Even at the end of the programme Zambia’s debt payments will rise.

Every loan from the world’s bankers has come with heavy conditions. The IMF and World Bank have forced the privatisation of over 250 Zambian public service companies.

Other imposed measures include: phasing out food maize subsidies; sacking 10,000 public sector workers; introducing VAT; ending intervention in the currency’s exchange rate; trade ‘liberalisation’; investment deregulation; public sector wage cuts; and deregulation in the agricultural sector.

None of this has produced the miracle promised by the quack doctors who prescribed the medicine. National economic production per head fell from $1,455 in 1976 to $1,037 by 1987 and then $892 in 2000. Zambians have repeatedly risen up against their poverty only to find that the great powers are not interested in anything so troublesome as democracy. Between 1984 and 1986 students and workers demonstrated and struck against the government’s austerity regime. The uprising forced the government to say it would limit debt repayments.

In addition there were some minor curbs on the power of multinationals. The economy grew in this period, but the IMF retaliated by refusing all finance. Eventually the government gave in.

A recent example of how democracy is thrust aside was the privatisation of Zambia’s state electricity company (ZESCO) and state bank (ZNCB) in return for debt relief. The government initially agreed to implement these measures, but this provoked large-scale resistance.

Following a major protest march, the Zambian parliament urged the government to rescind its decision to privatise. So ministers reversed their commitment to sell off the companies.

The IMF responded immediately by announcing that Zambia risked forfeiting $1 billion in debt relief. The government gave in. Another condition for receiving debt relief has been to curb public spending. This has forced the government to abandon plans to provide a living wage. Health services have also been made too expensive to use, just as HIV sweeps through the continent.

One in six Zambians between the ages of 15 and 49 years are infected with HIV. What a time to make pay people for even the most basic health treatment! A recent study showed that nearly half of people in the Copperbelt province, one of the wealthiest regions of the country, could no longer afford to take their children to the doctor.

The World Bank itself reported in 1994 that following the introduction of health fees outpatient attendance fell by about 60 percent and attendance at childbirth clinics by over 20 percent in the capital, Lusaka. Despite this, a new World Bank health project called on the ministry of health to ‘pursue improvement in cost recovery through user fees’. This is the real face of imperialism and capitalism-war in Iraq, death through enforced poverty in Africa.

For the full report go here


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