ZAMBIA'S DEVELOPMENT STRATEGIES AND CHALLENGES
2.3 Hijacked Development
2.3.2 Outcome of the Reforms
by 1997, 224 parastatal companies out of a total of 275 had already been privatized (Bienstein &
Kayizzi-Mugerwa, 2000; Situmbeko & Zulu, 2004; Afronet, 2001).
35% over the same period. In terms of overall employment, there was a decline of more than 12%.
This should be seen against the background of the registered increase in the labour force (McCulloch, Baulch &Robson, 2001). Putting these facts together, the situation highlights a general growth in unemployment with decreasing chances of being employed for new entrants to the labour market .
Table 2.13 Paid Employment 1990-2000 ('000)
Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Public
159 162 171 168 174 173 176 170 174 184 185
Mining &
Manufact
142 140 136 126 108 108 95 92 86 85 83
Agriculture
80 78 82 83 79 69 68 59 59 60 50
Other
162 164 158 143 136 135 140 155 157 148 158
Total
543 544 546 520 497 484 479 475 467 477 476
Source: Based on Figures from Central Statistics Office, C SO, 2002
2.3.2.2 Failed Reforms
Overall, the reforms of the 1990s failed to translate into any significant economic turn around as anticipated. Although the poor performance during this period has been attributed to what the World Bank has described as "uneven implementation and limited commitment to policy reform" (Situmbeko
&Zulu, 2004:37) on the part of government, the appropriateness of the policies can be questioned. Even the Bank itself admitted this fact. In one of its reports, the Bank acknowledged that the apparent waning of commitment to policy reform from the government may be attributed to the fact that reforms over this period have not achieved much in terms of reversing the downward trend in the economy (ibid). In a report reviewing the outcome of SAP in Sub-Saharan countries during the 1990s, the World Bank itself came close to admitting that the reforms have actually not worked.
No African country has achieved a sound macroeconomic policy stance - which in broad terms means inflation under 10 per cent, a very low budget deficit, and a competitive exchange rate.
Social spending, while not showing an overall decline during the adjustment period, is misallocated within the health and education sectors. And the politically difficult reform of the public sector enterprise and financial sectors lags well behind (in Hass and Ross, 1997: 578).
As noted earlier, huge decline in employment was actually prevented by the slight improvement of employment levels i the public sector over this period. Employment from the public sector increased from 159 000 in 1990 to 185 000 in 2000.
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2.3.2.3 Domestic Political Context
Implementation of reform programmes should be seen in the context of domestic politics. In the earlier days of the MMD government, the reforms were implemented without much opposition. But as the negative impact of these reforms surfaced amidst the declining of formal employment, rising inflation (in fact hyper inflation of more than 300% in 1994 onwards), introduction of user fees on all public services, further implementation of reforms attracted a lot of public criticism. However, the opposition from other political parties and civil society organizations including the labour unions was weak, with the MMD constituting almost a de facto one party. Furthermore, the trade unions at this time seemed to have partnered with the labour union-based government (Bartlett, 2000).
Looking at the time that the reforms were implemented, little was done by the IMF and the World Bank to strengthen the institutional capacity to ensure that reforms produced the intended results. Instead, focus was on getting the macroeconomic fundamentals right. A key deficit in the reform was the failure to take into account the policy trade-offs. It was assumed that implementation of these policies had no opportunity costs.
2.3.2.4 Impact on Social Development
The Afronet Report sums the general social welfare trend of the period between 1992 and 2000.
The economic reform program has been less than successful in stimulating expansion while it has created untold hardship for the majority Zambians. Between 1992 and 1998, and in real terms, the average percentage change in Zambia's gross domestic product has been negative at -0.2 percent. Government figures attest to a net loss of some 81 000 paid jobs in the formal sector over the period 1992-1998. The ZPA [Zambia Privatization Agency] records eleven state owned enterprise as liquidated between 1994 and 1997 in preparation for privatization and lists a further 28 companies, as of December 1997, as under liquidation or in the process of being wound up .... Rationalisation of the civil service, if implemented to plan, will see 57 000
r e d u n d a n c i e s ( 2 0 0 1 : Introduction)
2.3.2.5 The Water Situation
Regarding the situation of water in general, it is interesting to note that it was during this period of hijacked reforms that water issues were given considerable attention. For instance, the first ever National Water Policy (NWP) was formulated in 1994. Among the policy strategies outlined in the document which are relevant to this study are the seven Water Sector Principles (see Appendix iv).
What is interesting to note here with regard to access to water is that the policies were formulated during the time when the overall policy framework was largely steered by neoliberal conceptions of society and economic development. Given the dominance of the neoliberal paradigm at this time, the focus of the water reforms has not been so much on increasing access to water for those who have no
access, but on reforming the sector assuming that reforms such as the introduction of "full cost recovery" and the commercialisation of water services would make the sector viable and sustainable (NWP, 1994). Emphasis in the policy statements has been on treating water as an "economic good" and realizing its value through the market (see NWP, 1994: #2.2.7). Apparently, the policy mood in the country was largely following the growing emphasis of the economic value of water that dominated the global water debate during the early 1990s following on the Dublin and Rio summits (see Sections 4.1.2.3) Therefore, so far, not much has been achieved in terms of increasing access to water over this period especially for the poor sections of society. However, the reforms initiated during this period form the basis on which current efforts to increase access to water can be built. Both the Transitional National Development Plan of 2003 -2005 and the Fifth National Development Plan (2006-2011) are building on this policy framework.