Poverty in the midst of the market: the Zambian scenario

At present, 73% of the population live in poverty. Of these, close to 59% are extremely poor, with the majority being women and children. In addition to income deficiency, the poor lack access to adequate food, health and educational facilities, safe water, clothing and shelter. The PRSP is a weak response to poverty’s alarming proportions, while agriculture liberalisation has not benefited domestic farmers, due to high tariff walls and heavy subsidies in Western markets.

Povertytrends and aspects of poverty

Whoare the poor?

Whileat independence in 1964 the economy was one of the strongest in sub-SaharanAfrica, Zambia today is ranked as one of the poorest nations of the world.Poverty is more prevalent in rural (83%) than in urban areas (56%). However,recent statistics show that poverty is rapidly urbanising. Between 1996 and 1998urban poverty rose by 10%. Land tenure, sanitation, garbage disposal and accessto water in suburban areas, where most of the poor reside, are serious problems.To a large extent, poor sanitary conditions are responsible for high incidencesof cholera and diarrhoea outbreaks in urban areas during the rainy season.

Childpoverty has increased significantly in the last ten years, mainly as a result ofthe HIV/AIDS pandemic. Close to 75,000 children have become street beggars tosupport themselves and their siblings. Recent reports show that the number ofchild-headed households stands at 11,500. Children and youth between ages sixand twenty-four survive under extremely harsh conditions, which include physicalabuse, child labour, and prostitution.

Socio-economicindicators show that women are poorer (65%) and experience more deplorableconditions than men (52%). Poor women generally lack economic opportunities andthe struggle for survival has forced them into dehumanising activities thatexpose them to high health risks. Prostitution as an economic activity isrampant. Maternal mortality is exceptionally high for women. Gender roles,combined with some traditional and cultural norms, increase women’svulnerability. The lower position of women in society coupled with culturalfactors (such as “sexual cleansing” in which, in some cultures, survivingspouses are expected to have sexual relations with relatives of the deceased)expose them to higher risks of contracting HIV/AIDS.

Basicneeds and vulnerability

Inaddition to income deficiency, the poor lack access to one or more of the basicnecessities of life, such as adequate food, health and educational facilities,safe water, clothing and shelter. This material and social deprivation makes thepoor vulnerable to external factors such as natural calamities, like droughtsand floods, and economic shocks. The combined effects of poverty and HIV/AIDSleave Zambia with a large population at risk in case of a food shortage.

Baseline malnutrition levels for children under five are high, and the majority ofchildren, therefore, have a narrow margin of tolerance for any disruption offood and water. Considering that Zambia has experienced several years ofsuccessive drought and occasional isolated flooding, many communities today havea limited capacity to withstand new or repeated natural or environmental shocks.Also, the poor are major victims of disease outbreaks (e.g., cholera), and lackresources to procure medical services for preventable and curable diseases,resulting in particularly high mortality levels among them.

In1992 governmentremoved subsidies on farming inputs and marketing support. Over two millionpeople in the Southern Province are now facing famine, as a result of marketpolicies and drought. People in the Southern Province are eating dogs or dying.

HIV/AIDSand poverty

TheHIV/AIDS pandemic has devastated Zambia. Life expectancy at birth, which hadreached 54 years in the mid-1980s, is now down to 37 years. Recent statisticsshow that one million (10%) people are living with the HIV/AIDS virus. Close to20% of the economically active age group (15-49 years) are infected with thedisease. The annual number of AIDS-related deaths is estimated to be 99,000.There is an increasing number of orphans, most in areas where the incidence ofpoverty is highest. The impact of the epidemic goes beyond the individual level,increasing the burden on families and society at large through rising costs forhealth and social security systems, loss of production capacity and depletion ofthe human capital base.[1]

PovertyReduction Strategic Plan: a weak response

Today,an increasing number of the poor, as well as government officials, civil societyorganisations and the donor community are placing the blame for the country’sincreasing poverty largely on poor political and economic governance.Appropriate targeting of the poor and the vulnerable did not take place in thelast 10 years of the Chiluba administration and earnings resulting from theprivatisation programme and other national incomes have not been equitablyshared. There is a widespread consensus that although economic growth cannot initself alleviate poverty, Zambia cannot successfully fight poverty under astagnant economy.

Thenational agenda for tackling poverty for 2002-2004 is set forth in Zambia’sPoverty Reduction Strategy Paper (PRSP), which was approved by the Cabinet inMay 2002 and endorsed by the IMF and World Bank. The document recognises thatthe current poverty levels are the result of weak economic growth, inadequatetargeting of the poor and insufficient budgetary allocations.

Consequently,government has concluded that poverty alleviation through growth stimulationshould be complemented by measures that shield the poor from adverse impacts ofeconomic reforms. The focus of the PRSP is on achieving a sustained economicgrowth that creates employment and generates tax revenues, which in turn can beused to improve the provision of basic social services.

Onesector that is perceived to combine the virtues of growth and equity isagriculture. Consequently, the PRSP tries to give priority to enhancedagricultural productivity. Equally important is the renewed commitment todemocratising decision-making, ensuring efficiency and the equitable andtransparent management of public resources. The PRSP drafting process was hailedas “highly participatory”. Indeed, a first draft of the document wasprepared and discussed at a national summit in October 2001 with input from alarge number of stakeholders. A network of civil organisations conducted theirown parallel process, resulting in a comprehensive shadow report produced as aninput to the formal process.

However,the PRSP was conceived and written without the participation of the poor. Duringa human rights workshop held by Women for Change (WFC) in July 2002, more than200 participants drawn from across the country knew nothing of the paper. Therewas no involvement of ordinary people in the discussions and negotiations forthe paper, which undermined the legitimacy and integrity of the process.

Despitethis weakness, the PRSP is considered a good basis for analysis of Zambianpoverty. It applies a multi-dimensional perspective and explores avenues forcombating poverty in this context. Most of its policy statements are sound.However, some of the interventions proposed are clearly exaggerated. Thepossibilities for implementing the rather ambitious development agenda may bequestioned, both from a financial perspective and from a human resourceperspective, not least in light of the HIV/AIDS pandemic. It is not clear howthe government is to procure the resources it proposes to spend on povertyreduction as outlined in the PRSP. Similarly, the document has a weak financingplan and lacks a realistic time frame. The macroeconomic assumptions underlyingthe PRSP—especially real growth of between 5% and 8%—may also be challengedgiven the uncertain economic conditions facing Zambia.

Economicrestructuring

Privatisation

Privatisationstarted during the era of President Kaunda as reform “with a human face”.The full-blown privatisation of President Chiluba, whose government wascompletely wooed by the so-called market magic, removed any pretence ofprojecting a human face on the market. The enactment of the Privatisation Act in1992 created the Zambia Privatisation Agency (ZPA) as the machinery for theprivatisation of the economy.

TheZPA is responsible for developing the Divestiture Sequence Plan, a list of StateOwned Enterprises (SOEs) scheduled for privatisation with a timetable for each.After the Cabinet approves the sales, tender advertisement, asset valuation, bidevaluation, and the initiation of independent negotiations take place. Finally,agreements are signed between parties. In all of these procedures, there is nopublic involvement, the process being largely technical.

Theprivatisation programme is one of the most ambitious programmes in the post-ColdWar period. Beginning almost from zero in 1991, Chiluba’s Movement forMultiparty Democracy (MMD) Government sold 244 companies and units by 31 May2000.[2]According to the latest information on the Privatisation Status Report, a totalof 254 companies and units have been privatised as of June 2002. In one yearalone, from November 1996 to December 1997, a total of 52 companies and unitswere privatised. From March to May 1997, a mere three months, the ZPA privatisedeight companies.[3]The MMD government measured success of the privatisation process on the basis ofspeed; the Zambian privatisation was the fastest in the world. Little attentionwas paid to other important factors, such as social impact.

Thousandsof jobs have been liquidated, often without severance pay. Following ZambiaAirways’ privatisation, government simply denied ex-employees their rights toseverance pay. A subsequent compensation package was worked out without theparticipation and consent of the workers. The government then paid the moneythrough the company of one of the Ministers and Members of Parliament. In thecases of the United Bus Company of Zambia (UBZ) and several other SOEscompanies, there was no severance package at all. The majority of formeremployees of the state cotton company (LINTCO), which was privatised in theearly 1990s, have still not been compensated. In cases where compensation hasbeen forthcoming, it has either been late or grossly inadequate. The ZPA hasconsistently refused to intervene in disputes between ex-employees and thegovernment or managers of privatised companies.[4]

Agriculturaldevastation

Thegovernment has praised itself for increasing agricultural productivity,especially for export sectors such as cotton, sugar and dairy products, byliberalising agricultural markets. The claim that liberalisation has benefitedfarmers is laughable. The Western markets for which their products are destinedremain closed behind high tariff walls. In addition, these products in Westerncountries are heavily subsidised, making it difficult for farmers to compete inthe market.

Domesticagriculture, on the other hand, has been almost completely destroyed during thelast ten years. The switch to free markets and the discontinuation of governmentloans has ruined village farms that depended upon fertilisers andnon-traditional seed maize. Millions of farming households have no food becausethey cannot afford the high prices of seed and fertiliser. Meanwhile, duringgood seasons when farmers produce high yields, most products go to waste sincethe government no longer subsidises or markets the produce.

Governanceand constitutional reforms

Badgovernance has clearly exacerbated poverty and is largely the result of aConstitution that concentrates power; it severely restricts legislative actionand allows the president to govern virtually alone. Corruption of presidents andtheir ministers has been a common complaint.

PresidentMwanawasa first proposed and then dismissed the idea of carrying out afundamental review of the Constitution. His reversal came after civil societywelcomed the announcement and suggested how the process should be conducted.Without a fundamental alteration of the Constitution, it will not be possible tohave a real democracy or to solve the problem of poverty in Zambia.