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Zambia Feels the Sting of Debt Relief

The nation goes to the polls Thursday, but some analysts say a leadership change won't ease the fiscal restraints set by world lenders.

September 27, 2006|Robyn Dixon | Times Staff Writer

LUSAKA, Zambia — Behind the humming highway, with its foreign chain supermarkets, take-away franchises and cellphone stores, lies sprawling Misisi township, one of the poorest districts of the Zambian capital.

Here, Foster Katoni, a 52-year-old widow, sits in the dust all day selling bags of crushed salt, a cold wind cutting through her ragged cotton shift and light sweater.

Like nearly three-quarters of this nation's 11 million inhabitants, she survives on less than a dollar a day. She has buried her husband, who died of an unknown illness, and eight of her 10 children, half of them killed by AIDS. She supports six people, including two grandchildren.

"Yesterday I tried to sell some salt but I couldn't, so we slept hungry," she said. "Some weeks we only have meals on two days. Other days we go hungry. Life has become very unpredictable. I can't say what will happen on any day."

On paper, the Southern African country is a success story for foreign debt forgiveness, having corralled its inflation rate and restrained its government spending.

On the ground, it is withering under the very fiscal restraints set by world lending authorities as conditions for the debt relief. And as Zambia faces an election Thursday, there is little hope for significant change.

"I am sorry, but there's no cause for celebration because it's debt relief that has come with huge costs," said Jack Zulu, a policy analyst at the Jubilee Trust, a British charity that has campaigned successfully for debt relief for African nations, including Zambia.

"Restructuring of the economy cost tens of thousands of jobs," he said. "Livelihoods were destroyed. In Zambia, each worker has a chain of dependants." Children will not be able to attend school and pregnant women will not have access to healthcare, he said.

"Forty-two years after independence, we are failing to provide a decent level of education."

Misisi is the real Zambia, Zulu said, not Lusaka's paper-thin veneer of prosperity.

On school days in Misisi, children hang around in the narrow streets looking for odd jobs. Few can afford school fees.

Many people do not know in the morning whether they will eat that day.

Zambia is one of the poorest and least-developed countries in Africa, ranked 166 among 177 countries in terms of development, the United Nations said.

Last year, the Group of 8 industrialized nations meeting in Gleneagles, Scotland, agreed to forgive Zambia's debt after the government had complied with painful austerity measures set by the International Monetary Fund and the World Bank. The move cut Zambia's external debt from $7.1 billion to $502 million.

The government's tough fiscal policies have whittled inflation to 8% from 30%, gaining it the respect of international institutions, donors and investors.

But those moves, which have left the country's social infrastructure near collapse, could cost President Levy Mwanawasa a second term and oust the Movement for Multiparty Democracy party from power for the first time in 15 years.

Patrick Kanchense, 37, a water engineer in Kitwe, in the country's northwest, is eager to see the party defeated. He said the government's fiscal policies were fine, but it had neglected infrastructure and jobs. He will vote for the leading opposition presidential candidate, former policeman Michael Sata of the Patriotic Front party.

"People talk about fiscal planning and say we have done the basics. But what are these basics if you can't put food on the table? We need to create employment, but we don't see that coming from our politicians," Kanchense said.

Since suffering a stroke in April, Mwanawasa has fought to brush aside criticism that he is not well enough to govern for five more years.

He has called for the suppression of opinion polls in the election. Most polls show him lagging.

Sata, a former member of Mwanawasa's party, has had some rough patches in the campaign. A plan to replace slum housing with better dwellings was interpreted by many of the urban poor in areas such as Misisi as a threat to demolish their homes. He also pledged to drop graft charges against his close political ally, former President Frederick Chiluba.

The Group of 8 debt relief was billed as a way to free millions of dollars for spending on healthcare, education and the poor. But it has had so little effect that many voters seem unaware of the windfall, and all too aware of the effects of spending cuts.

Some of the government's poverty reduction measures, such as a plan to make rural health clinics free, were bungled, Zulu said. When the clinics could no longer charge fees, they stopped distributing free drugs. Patients faced the expense of having to travel to towns with pharmacies to buy medicine.

Voters also blame the debt restrictions for the nation's high unemployment rate, officially about 50%. If those who work in the informal economy, such as Katoni, are excluded, the rate soars to about 90%, the Zambia Congress of Trade Unions said.

Many teachers say they can't get jobs because of ceilings imposed on public-sector salaries. Critics argue that it would have been better to slash the education system's top-heavy bureaucracy than to reduce the number of teachers.

Essy Hanjalika, 25, an unemployed teacher in Kitwe, said she had no plans to vote despite her opposition to the government.

"I am not seeing any employment," she said. "We just need a leader who can bring development into the country, like the education sector. It should be a priority because when there are no teachers, the children will be affected."

Zulu said that despite the International Monetary Fund and the World Bank canceling Zambia's debt, the country is so burdened with domestic debt that there is little flexibility in the budget to boost spending on social infrastructure.

Whoever is elected president, he said, will have little room to maneuver.


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