Kevin Watkins
FIVE years into an economic reform programme that was supposed to transform Zimbabwe into Africa’s answer to the Asian “tiger” economies, Edith Chido is still waiting to see the miracle unfold in Epworth, a dusty settlement a few kilometres from the capital Harare.
“They speak of the Enhanced Structural Adjustment Programme (Esap) on the radio, promising us a bright future if we suffer some pain now, but I can see no future,” said Chido as she washed clothes outside the one-room wooden shack shared with her husband, their three daughters and the son of a sister who died recently from HIV-related meningitis.
Until last year, her husband earned about Z$70 ($6,90) a month, working in a textile factory. Then the factory closed. Now the family survives on less than Z$1 a day, which she earns from laundry work in Harare. Meal time is a helping of maize-based porridge or “sadza”, and a watery cabbage sauce.
“More than 70% of the children here are malnourished,” a health worker in Epworth said.
Epworth is a microcosm of a wider tragedy unfolding across Zimbabwe. The poverty of more than a quarter of the population is deepening, inequality is widening and unemployment has risen to more than 50%. Those in work have seen their benefits and security downgraded, along with their wages. Their real incomes have fallen by a third since 1990.
The pursuit of International Monetary Fund (IMF) budget targets under Esap has eroded the gains in health and education since independence. Health spending per capita has fallen by a third since 1990, bringing one of sub-Saharan Africa’s most developed health systems to the brink of collapse. A recent report from Harare city council showed that infant mortality rates have doubled since 1990.
Part of the bleak picture can be attributed to Aids, which affects one million people — a third of the sexually active population. According to the World Bank, treating Aids-related sickness will require a fourfold increase in spending in the next decade, yet health-centre budgets are in terminal decline.
In education, real spending per primary school student has fallen by more than 30%, leaving schools to rely on levies and fees.
Yet the IMF believes Esap has been a qualified success. “The challenge now is to consolidate the gains of the past five years and to accelerate the reform process,” said the fund’s Southern Africa representative, Jurgen Reitmar.
Despite this, virtually all of Esap’s macroeconomic targets have been missed. Inflation is more than double the 10% target fixed in 1990, real incomes have fallen, the budget deficit has increased, exports have stagnated and manufacturing output and investment have declined.
In a best-case scenario, it will require annual growth rates of more than 5% to restore average incomes to their pre-1990 levels.
The World Bank and the IMF blame Esap’s performance on two severe droughts. But high interest rates, the exposure of fragile industries to competition from imports and the collapse of the domestic market have also contributed. So has the decline of public investment.
But in the eyes of its supporters Esap’s failure is temporary rather than structural. “Everybody must face up to the transitional costs of adjustment if we are to progress,” the deputy finance minister, Misheck Chinamas, recently told parliament.
President Robert Mugabe is aware of the unpopularity of Esap — an acronym popularly reinterpreted as “eat sadza and perish”.
During his election campaign earlier this year he denounced the IMF and the World Bank and promised a more humane reform programme. Today his officials are completing negotiations on a new five-year Esap.
The new programme will require the government to cut its budget deficit of 13% to 6% within the next three years.
In theory, the budget sustainability could be achieved by restoring taxes on higher income groups and reducing subsidies to loss-making parastatals. In practice, powerful vested interests make this a non-starter. The upshot is that the brunt of the next phase of structural adjustment will be borne yet again by the poor.
Kevin Watkins is a senior policy adviser to Oxfam
July
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