From: barnhart@gagme.chi.il.us (Mr Aaron Barnhart)
Subject: IPS: STRUCTURAL ADJUSTMENT: ZAMBIA, EXPECTATIONS TOO HIGH
Originator: barnhart@gagme
Organization: Evanston, Illinois
Date: Sat, 3 Oct 1992 21:40:48 GMT

Copyright Inter Press Service 1992, all rights reserved.  Permission to re-
print within 7 days of original date only with permission from 'newsdesk'.

Reference: Third World Dvpmnt; Africa, southern
Title: STRUCTURAL ADJUSTMENT: ZAMBIA, EXPECTATIONS TOO HIGH /SERIES/


/attn editors: the following is the last in the series of four
features examining the issue of economic adjustment in africa./

lusaka, sep 25 (ips/chola chimbano) -- as the 11-month old
movement for multi-party democracy (mmd) government attempts to
fuse zambia's newly won democracy with development, there is a
growing feeling among observers that the expectations of both
government and people are unrealistically high.

in the mmd's determination to quickly correct zambia's
economy which has been on the decline for two decades, it has
adopted an international monetary fund (imf) structural
adjustment prgramme.

inspite of the many macromeasures taken by the government to
liberalise the economy and create a suitable environment for
investment -- devaluation, freeing the pricing mechanism and
interest rates and exchange controls -- the judgement by most
zambians will be based on the price of the staple mealie meal.

prices of goods and other services have increased three-fold
since liberalisation started in january and retrenchment within
the public sector is underway. the honeymoon period for the mmd
after its landslide election victory is definitely over.

the mmd government this week came under severe attack from
various quarters, including the powerful zambia congress of
trade unions (zctu) and university students, over the proposed
privatisation of strategic companies such as the zambia
consolidated copper mines. the government has been accused of
betrayal and ''auctioning the country''.

zambia, which under the previous government had five failed
imf programmes since the early 1980s and was declared ineligible
by the fund in 1987, has been forced to return to the
international financing insitutions.

veteran president kenneth kaunda, already unpopular because
of the worsening living conditions, could not adopt the
conditionalities imposed by the imf on subsidies, particularly
mealie meal. when attempted in 1990, serious food riots
followed and directly led to multi-party reform and his demise.

kaunda's 27-years of rule, with state intervention in the
running of the economy, reduced this copper rich country to
one listed by the u.n. as among the least developed.

foreign invetors fled as their companies were taken over,
infrastructure such as roads and hospitals decayed, industrial
utilisation dropped to 30 per cent, inflation, money supply and
budget deficits ran out of control, and unemployment increased.
(more/ips)


structural adjustment: zambia (2)

according to analysts, the mmd in its desperation to break
from the past, and maintain good relations with donors, may have
set its target too high.

''there is a lot of expectation and hope that investors will
come to zambia and there is a risk because the government is
looking at them as the saviours of the zambian economy but the
investors will come at a price which is the human factor'', said
one diplomat.

he added, ''it is only now that the international financial
institutions are starting to realise the worst effects of sap
and it will take a while longer before it can be filtered into
their programmes''.

''the interest of the ifis (international financial
institutions) is only in getting their loans repayed'',
commented another diplomat.

but donors have praised zambia's efforts and pledged over one
billion dollars for the programme as well as cancelled or
rescheduled half of its seven billion dollar external debt.

inspite of the redundancy packages, observers say the mmd has
not come out with a clear social programme on how it will help
people to resettle. the zctu has called for a revision of the
country's investment code to protect workers from foreign
investors.

workers in some of the state firms lined up for privatisation
have expressed fears of being ill-treated by would-be foreign
investors: ''we are scared of south africans because we think
they will treat us the way they treat blacks in their country if
they come here''. the first tranche of 17 companies has already
been advertised for sale.

but investment has been slow. there is anxiety over the
prevailing drought by the would-be investors, which has crippled
some strategic secors of the economy such as agriculture and
electricity supply, as well as the wait-and-see attitude over
the situation in south africa.

for some time the zambian economy, largely based on providing
services, will not offer any benefits to the ordinary zambian
and will operate to the advantage of the elite: some of whom
have found their way into the government.

''for me it is like living in a diferent country and i look
forward to a time when i can afford to pay for the many things
that i see on the supermarket shelves. i know with a lot of
patience things will stabilise, but maybe i won't contain my
suffering'', said patricia banda, a secretary in a private firm.
(end/ips/cc/pa/92)
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