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Zambia: Debt Issues
Zambia: Debt Issues
Date distributed (ymd): 000320
Document reposted by APIC
Region: Southern Africa
Issue Areas: +economy/development+
This posting contains a status report from Jubilee 2000 Zambia
on the debt cancellation campaign in Zambia. The report
raises very substantive issues applicable more broadly to the
debt issue worldwide. A parallel posting sent out today
contains several documents related to action internationally
and in the U.S. on debt cancellation.
To support APIC's work:
APIC's Africa Web Bookshop:
Updates on Southern Africa Floods:
Additional links on debt:
JUBILEE 2000 ZAMBIA -- WHAT IS THE WAY FORWARD!
By Chrispin Mphuka
Jubilee 2000 Zambia Campaign, c/o JESUIT CENTRE FOR
THEOLOGICAL REFLECTION, P.O. Box 37774, 10101 Lusaka, Zambia
Tel: 260-1-290-410; Fax: 260-1-290-759; E-mail:
[distributed by ICCAF, an ecumenical organization involved in
research, lobbying, and advocacy. Inter-Church Coalition on
Africa, 129 St. Clair Avenue West, Toronto, Ontario, Canada
M4V 1N5; Tel: 416-927-1124; Fax: 416-927-7554; e-mail:
The Jubilee 2000 movement started as an idea some four to five
years ago. Some people shunned the idea because they thought
it was a silly one, a crazy dream. Others were rather
pessimistic, even cynical, and thought that the movement was
not going to have any impact. Only two years ago who would
have predicted that debt cancellation of poor nations would
be top on the agenda for the Group of Seven meeting in
Cologne last year? Who would have dreamed that the IMF and
World Bank would admit that their policies worsen poverty in
poor nations and that a whole new approach to solving the
debt problem was necessary? Who would have dreamed that
Clinton or Blair would announced a 100 percent debt
cancellation for the poor nations?
Yet the worldwide movement of the people, Jubilee 2000, has
made all this possible. A silly idea, a crazy dream, is
become more and more a hard reality in our world today. Even
the Economist-a leading world business magazine-has
acknowledged the power of Jubilee 2000. Indeed Jubilee 2000
is a movement with a difference. A difference to change
things for the better, especially for the poor of the world,
the poor of Zambia!
For those of you who marched with us for the Jubilee
2000-Zambia "Cancel the Debt" Campaign on the 22nd of May
last year, I would like to take this opportunity to thank
you. Without your efforts Jubilee 2000-Zambia may have not
been as successful as it has been. But I also strongly
encourage you to continue supporting the campaign. I urge
others of you who have not been involved to join the movement
because the battle is not yet won.
And that's what I want to speak to you about this morning,
covering the following points:
? Recent changes and developments in the debt situation
? Implications for Zambia
? Experiences with the PRGF in other countries so far
? Position of Jubilee 2000-Zambia about the recent changes
? Challenges: Debt Mechanism and civil society participation
? Debt and Beyond -- the issues we must face in the future
? The Way Forward
MAJOR CHANGES DUE TO PRESSURE BY JUBILEE 2000 MOVEMENT
As Henry Northover has explained more in detail, there have
been some major shifts in the policies of the World Bank and
the IMF -- and many of us believe that these shifts have came
about because of the worldwide Jubilee 2000 pressure.
The two key shifts have been (1) the review and redesign of
the Highly Indebted Poor Countries (HIPC) initiative and (2)
that the Enhanced Structural Adjustment Facility (ESAF)
should be renamed the Poverty Reduction and Growth Strategy
(PRGF -- Many of us still call ESAF -- SAP! -- you know the
old proverb, "a rose by any other name still smells sweet!"
or, in the case of SAP, "garbage by any other name still
As Henry explained, after the G7 meeting in Cologne, HIPC was
reviewed and the World Bank and the IMF now claim it offers
faster, deeper and wider debt relief. But is that true? We
see that the "enhanced" HIPC does not offer total debt
cancellation. And the process is still tied closely to the
those structural adjustment economic "recipes" that have
meant very bad meals for the poor!
As regards the second major shift, the proposal for the PRGF,
we feel the most significant point to be followed is the call
for participation of civil society in an approach that is
purported to focus on poverty reduction. But we need to ask
questions about whether the design of the PRSP (as Henry
explained) will in fact impose another layer of
conditionalities to HIPC qualification. (Without wanting to
sound like key leaders in the current government, "the goal
posts do seem to be shifting very often!)
IMPLICATIONS FOR ZAMBIA OF THESE SHIFTS
What do these shifts mean for Zambia? What do these shifts
mean for you and me, the Zambian citizens?
For Zambia a significant proportion of our debt will be
cancelled, if we meet the necessary qualifications. Zambia is
expected to reach its HIPC decision point by June this year.
It may take another year or at least another six months
before we reach the HIPC completion point. It is only at the
completion point that debt relief becomes available. If all
goes well, we might expect over US$ two billion of
multilateral debt to be cancelled and over US$800 million of
eligible bilateral debt. In addition, Zambia looks forward
to the promised 100% cancellation offered by the UK, Canada
and USA. Because we owe Japan and Germany more than US $1
billion, we strongly urge these two countries to follow the
example of their other G-7 partners and cancel Zambia's
Now, this picture indeed looks very rosy, very favourable.
But let me add at this point two cautions that give the Zambia
picture a more accurate report. First, even with the major
cancellation of multilateral debt, we still will be heavily
servicing the debt --to an estimated US$190 million each year
for the next few years -- and this is substantially more than
our expenditures on health, education and other social
services. Second, the entire cancellation process is
dependent upon our completion of the PRSP process -- and we
are only now beginning to get that process underway!
EXPERIENCES WITH THE PRGF IN OTHER COUNTRIES SO FAR
As we evaluate the implications for Zambia, we need to put
this into the perspective of reviewing the experiences of
other countries that are qualifying for HIPC relief at this
Late last year, Mr. Michel Camdessus, outgoing Managing
Director of the IMF, announced that Uganda, Mozambique,
Bolivia, and Mauritania were to qualify for enhanced debt
relief by January 2000. This did not in fact happen.
Uganda, Bolivia and Mauritania qualified early this month,
with Mozambique falling out. Uganda and Bolivia reached the
old HIPC completion point but have been reverted back to the
decision point under the enhanced new HIPC. Despite the
glowing newspaper reports you may recently have seen, it
appears that these countries may have to wait some time
before debt relief is actually in their hands, not simply in
others' books. An additional concern is that the funding
required for the new HIPC to take place has not yet been
fully guaranteed by the larger creditor countries.
Mozambique, one of the poorest countries in the world, fell
out of the immediate HIPC relief because it does not have a
PRSP in place. They hope to move quickly enough to qualify
POSITION OF JUBILEE 2000-ZAMBIA ABOUT THE RECENT CHANGES
It is important at this point to reiterate that Jubilee
2000-Zambia stays faithful to its original claim: a demand
for total debt cancellation for Zambia, not simply trickles
of relief. As I have explained earlier, even with HIPC
relief, Zambia will still be paying substantial debt
servicing in the near future -- denying a future to children
without schooling, sick without healthcare, and over 70% of
the population suffering from poverty.
The PRGF programme, while the IMF claims it should be a "home
grown" programme, is still too much dependent on outside
influences. We feel that the IMF has too large a role in
approving the Zambian programme. We know that under the
former ESAF programme, the IMF's influence was so great that
even President Chiluba had to back down from his promise of
raising civil servants' salary to K200,000.
We believe that there are better institutions, more qualified,
that should have an upper hand in guiding poverty reduction
approaches -- for example, UNDP or UNICEF.
As regards our government, Jubilee 2000-Zambia urges that the
process of PRSP be begun immediately, so that Zambia does not
face any disqualification from its deserved eligibility. As
we know, therefore, civil society's participation must be
invited readily. Today's conference hopefully will move this
CHALLENGES: DEBT MECHANISM AND CIVIL SOCIETY PARTICIPATION
We now come to a key point in the Jubilee 2000-Zambia
campaign, a point essential to the way forward of
guaranteeing that debt cancellation will mean poverty
reduction. There is an economic, political and moral demand
that whatever savings come from debt cancellation should go
towards reduction of poverty in our society. But you and I
know very well that we need an effective mechanism in place
if this demand is to be met. The Jubilee 2000-Zambia
campaign has come up with a very specific proposal, worked on
over the past several months with wide consultation. The Debt
Mechanism proposal is included in your information pack. As
you will see, the proposal we are suggesting is for the
establishment of a "Debt Fund Managing Committee" and a "Debt
Relief Social Fund."
The Debt Fund Managing Committee is a tripartite steering
committee, made up of representatives from civil society,
Parliament and various government ministries. It is charged
with oversight of the spending of any resources freed up from
debt cancellation. The Debt Relief Social Fund is the
instrument for this spending, with its total orientation
being the reduction of poverty.
This Debt Mechanism meets the requirements of (1) transparency
and accountability, (2) wide participation, and (3) poverty
orientation. Thus it answers the demands not only of the
foreign creditors but, more importantly, of the ordinary
As civil society represented here in this Conference, we must
look carefully at this proposal, at least in general detail.
Is it something you agree with? Is it something you are
willing to promote in the political arena? Do you have
suggestions about how to go about this important task? In
the afternoon, we will have more time to discuss this in
groups. Our hope is that in the next few weeks our task will
be to build political will for this proposal.
But two very serious challenges face us as civil society. The
first is to recognise that the term civil society might be
inappropriate for our movement. It may simply be too broad.
It includes everybody and excludes nobody. But who should
participate in the debt mechanism process? Certainly is
should be limited to those groups directly involved in
poverty work and with strong grass roots connections. As
details become more sharply debated and clearly defined, the
participants will be identified in a democratic process.
The second challenge is to recognise that key to civil
society's meaningful participation in the PRSP process is its
capacity to enter into what at times may be more technical
discussions. We cannot only "approve" what others have done
-- we must get involved at the outset of the preparation of
the papers. Any other way is only "tokenism," "consultation"
without any effective power to decide the direction of the
programme. The need to build the capacity of civil society
is a high priority on Jubilee 2000-Zambia's agenda and we can
talk more about that this afternoon in our groups.
DEBT AND BEYOND -- THE ISSUES WE MUST FACE IN THE FUTURE
Our colleagues in the worldwide Jubilee 2000 campaign have
come more and more to realise that the problem of debt is
actually only a symptom of a much deeper and more serious
problem -- the injustice of the overall international
economic order. Recent meetings of the South-South summit of
NGOs involved in the Jubilee campaign have emphasised that
debt is an effect of unfair, inequitable relations between
the rich and the poor nations.
We have seen, for example, in the negotiations around the WTO
in Seattle and UNCTAD in Bangkok that the entire
international economic order must be re-evaluated and
re-shaped if the needs of the majority of the global
population, the poor, are to be effectively met. We need to
put issues like trade on our agenda for the future.
So it is not only the development of an effective debt
management system by our government, with meaningful civil
society involvement, that will assure that Zambia does not
fall into future debt traps. But it is also a positive and
necessary move in the direction of Zambia's active role in
shaping a just international economic order. We must not
attend conferences that shape our future merely as spectators
but as competent and forceful agents of change.
THE WAY FORWARD
In conclusion, let us look at the fact that Jubilee
2000-Zambia is now at the close of the second month of the
year 2000. Where are we headed in the last ten months? What
are our priorities in the immediate future? How can you be
an effective participant?
Let me simply list a series of points that we can then discuss
more fully. They are needs, challenges, calls for our future
as Jubilee 2000-Zambia.
- We need more coordination and cooperation among the
organisations involved in the campaign. We are a varied and
talented group -- working together we can accomplish great
things in getting debt cancellation that will improve the
lives of our fellow Zambians.
- We must intensify our call for total debt cancellation for
Zambia, without any conditionalities. As we have said
many times before, no conditionalities from above but
only conditionalities from below -- that is, the active
participation of our own civil society in monitoring debt
negotiations and directing debt relief resources toward
the needs of the poor.
- We are challenged to develop more mass mobilisation of the
people from the grassroots in the campaign. We can be
proud of the fact that prior to Cologne in June of last
year, our campaign gathered 300,000 signatures on our
petition, and 45% of these came from rural areas. Using
more vernacular outreach (like our radio dramas) and more
local presentations (like the popular drama you will see
after lunch), we can mobilise more Zambians.
- We must lobby government to give us more vital information
about the debt situation. We appreciate the presence of
the Minister at this Conference and the active
participation of government officials. More of this is
necessary and as citizens and taxpayers, we expect it!
- We need to carry out deeper research on Zambia's debt
situation, for example, how it impacts on the poor, how debt
benefited our development, what debt was incurred because
of the struggle with the Apartheid regime in Pretoria,
etc. This research must be oriented toward policy
changes and widely circulated among the general public.
- We are challenged to strengthen the links with other
international organisations involved in the Jubilee 2000
campaign. This includes as a first priority links with groups
in the South, especially in Africa. But we are also
pleased that so many Northern groups are interested and
supportive of what we are doing. Several of these groups
are represented here in this Conference today -- and we
welcome your cooperation!
Jubilee 2000-Zambia has come a long way in a short time. A
silly idea, a crazy dream. But now the reality! Please
keep giving us your hard work and dedication -- we have a
long ways to go yet. But we are moving and the goal --
poverty reduction in a society of greater justice -- is too
great too be slow about. Our best human and religious
instincts and values will keep us on the way!
This material is being reposted for wider distribution by the
Africa Policy Information Center (APIC). APIC's primary
objective is to widen international policy debates around
African issues, by concentrating on providing accessible
policy-relevant information and analysis usable by a wide
range of groups and individuals.