BEYOND RIGHT AND WRONG: THE LESSONS
FROM ZAMBIA’S STRUCTURAL ADJUSTMENT IN THE 1990s.
By
KATELE KALUMBA MP
MINISTER OF FINANCE AND ECONOMIC
DEVELOPMENT
ZAMBIA
Rhetoric is to be able to see where
unlike things are alike, to understand how unknown things are like known
things. Anybody’s rhetoric belongs to all of us. Who thinks naked is ugly will
not be able to write. All his energy will go into trying to conceal himself. He
will fail: exposing in turn, a shameful intention. We should not intend to be
honest. Intention is not good enough. The honest man writes to find out what he
thinks, to test what he thinks, change what he thinks. He suspects himself
always. He knows honesty is a skill that must be exercised always. Men want to
be honest, few know how.
And from this angle, I approach my
discourse with Mr John Phiri’s article that appeared in the Perspective column
of the Zambia Daily Mail ( July 2001 ).I am aware, that I can only approach a
realistic appreciation of Phiri’s account by enticing him into a dialogue. A
continuous debate over his written text. I cannot satisfy myself by simply
reading into what he wrote. That piece of work is finite. It cannot defend
itself beyond what it has already said no matter how many times we question it.
Only by engaging Phiri into an on-going dialogue can we approach understanding
of each other’s view and possibly of the state of the matter we seek to
understand. Yes seek to know, for above all, are we not admitting our ignorance
as we write ? Understanding what has happened to the Zambian economy must be an
effort of inquiry. The only person to make a genuine effort to understand is
the person who knows he does not understand. I therefore mistrust ‘experts’ who
simply regurgitate what they read three or so decades ago.
I definitely and absolutely think
very low of ‘commissioned thinkers’
whether they be for the State, the IMF or for some Civil Society organization.
I have come across very few who think independently of the ‘politically right’
perspective of the Agency that commissioned them. If you want to pay me for my
ideas, wait until I have written. If you do not like them, fair enough, do not
waste your money. Intellectual prostitution says do not say that which will not
please the IMF, the government or Jubilee 2000. One colleague from the media
sent me an email telling me about how “pissed off” the IMF and the World Bank
in Zambia were about what the media attributed to my paper presented in Berlin.
Well, assuming this observation is correct, I can only say, that is very sad.
Very sad indeed.
If the IMF and the World Bank do
not have what it takes to inquire into Zambia’s policy experiences of
structural adjustment, I understand the glee on Phiri’s face when he read my
paper presented to the IMF/German Ministry of Finance and DSE Forum in Berlin
in June this year. No other person than the Minister of Finance and Economic
Development, admitting that structural adjustment has been a difficult
experience, questioning whether it could give rise to sustainable economic and
social development, well what more evidence do you need to indict the MMD
government’s policies? It is a retreat!
In some order of explication, he uses my analysis as a vindication of what Civil Society organizations like
Jubilee 2000 Zambia and the Jesuit
Centre for Theological Reflection (JCTR) under Father Peter Henriot and, even some opposition elements like Mr Dean
Mung’omba, have been saying all along. Nothing new.
Assuming that the conclusion Phiri
draws refers to the phenomenon I was discussing in the Berlin paper i.e., the
problem of ownership and conditionality in structural adjustment programmes, I
must admit I have not quite read in an exercised way what Mung’omba has said on
the subject generally or on the various elements I discussed in the paper. He
may have written but I will have to rely on Phiri to guide me to those works
and where they are published. As for my concern on the social impact of
structural adjustment, I would recommend Phiri to read my earlier works on the subject
on Structural adjustment and Nutrition in the late 80s cited by ( ). My
concerns on the need to put adjustment programmes to the litmus test of whether
they are: poverty focused, growth oriented, technically sound in terms of
design and politically manageable, is well appreciated by those colleagues who
have cared to read my works or listen to my presentations. Again, nothing new.
Except this time, there is a context. This is not simply another scholar
writing, it is as Phiri correctly acknowledges, the Minister of Finance! That
is where the problem starts, I think. I do not know how to think about the
subject beyond the evidence available and the systematic tools of inquiry that
scientific discipline demands. If something stinks, my sensory experiences won’t register a sweet aroma.
Yes, Mr IMF and the World Bank, the
majority of the human species have a problem with the design and implementation
of conditionalities in Fund-supported programs. That is the real world. Yes Mr
Phiri, structural adjustment measures are not only inevitable but necessary in
economies such as Zambia’s which had serious dis-equilibrium. It is not a
question of whether or not a country needs to adjust. It is only an issue of
when and how? Not of right or wrong but of form and strategies.
The economic policy changes that
external agencies require of national governments in the course of
adjustment---known as conditionalities…remain a source of political contention
between governments and their creditors and in the domestic politics of
individual countries. Zambia is no exception. Or rather, in the experience of
conditionalities during adjustment, there is no country where a huge party was
thrown either by government or Civil Society organizations to celebrate their
introduction. As Jack Boorman, Director of Policy and Review Department of the
IMF said during the Berlin meeting, it
is unrealistic to think of ownership as meaning that everyone in the country
supports the program. Why? Because, as Boorman argues, any program of economic
policies creates winners and losers, and this ‘will be reflected in the views
within the country on the approach to be taken’. He cites the case of
Indonesia. He argues that while the Fund-supported program in the fall of 1997
and early 1998 was broadly supported within and outside government, it was not
owned by the Suharto family and other elements of the political elite who
feared exposure of their economic interests.
Assuming again that we are
discussing the same thing, the relationship between production activities,
factors and institutions is very complex particularly in relation to
distribution of value added, income distribution by socio-economic groups and
actual consumption patterns of socioeconomic groups. Epidemiologists know the
incidence of malnutrition in households with high incomes but where children
are taken care of by domestic workers with little education levels. Perhaps a
rare phenomenon but by no means impossible. Structural adjustment measures that
the IMF and the World Bank often design for countries like Zambia, are often
very complex, too complex sometimes for most countries to fully grasp. Within
them there are many unknowns. These are created by a variety of factors
including sheer limitation in information. That is, there is no way of knowing
because information is not available and assumptions have to be made. When such
information is available, it may not be to the advantage of countries to reveal
them to the Fund officials given perceived problems of contigent conditionalities
that their consideration in the measures designed may entail. Cat and mouse
game perhaps. But consequently, programs may be subject to many design flaws
arising from inadequate analysis of activities, factors or institutions. It is
not an exact science like predicting the eclipse of the sun.
How then shall we pass judgement? I
say by continuous analysis and dialogue. The Fund is beginning to acknowledge
the wake up call, in response to critique from developing countries, adjusting
its mandate emphasizing “high-quality growth”. There is a worth of experience
from which the Fund has had to learn in its design of conditionalities. Morris
Goldstein , a Dennis Weatherstone Senior Fellow from the Institute for
International Economics, told the Berlin meeting that the Fund ‘s
conditionalities have been influenced by multiple factors. He listed among
these: Expansion of IMF’s surveillance responsibilities; Fund’s role in
transition economies; balance-sheet problems of banks and corporations in the
Asian crisis countries; Vicious circle of low compliance and greater
intrusiveness of Fund conditionalities; “pilling on” by legislative groups,
NGOs, and other financial institutions to take advantage of the “leverage” in
an IMF letter of Intent.
Listening to Goldestein on this
point, I couldn’t resist remembering the most honourable member of Parliament
for Lusaka Central , Dipak Patel waving Zambia’s Letter of Intent downloaded
from the internet, in Parliamentary
debates in a manner always suggesting: government you can no longer hide
anything, we know what you are up to and we shall keep you tracked. It is
always a bewildering moment listening to him exhort this new found internet
empowerment ! Actually governments authorize the Fund to publish their Letters
of Intent as one way of enhancing commitment and transparency for both the Fund
and the government in question. It is no longer a secret Mr Patel.
There is one other point Goldstein
mentioned worthy noting here. Sometimes, he observed, the availability of
ground troops and relatively high efficiency of the IMF (or as I argued with him, the lack of it) affects
the type and quantities of conditionalities prescribed. If the mission chief
believes his job is that of policing, rather than work through problems with
the country authorities, you will end up with a wide array of conditionalities
particularly designed to force compliance.
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