SAPs and the Build up to the Rwandan Genocide
Thomas Hauschildt, Mar 31 2012
This project evaluates the impact of structural adjustment programmes (SAPs) on the economy and subsequently social environment of pre-genocide Rwanda.
The first research aim is to evaluate the development and characteristics of neoliberal theory and SAPs (Auerbach, 2007, pp.34-35). The cornerstones of neoliberal policies are the International Monetary Fund (IMF) and the World Bank and the origin and purpose of both institutions will be assessed (Rowden, 2009, pp.53-56). Arguments made by the IMF and the World Bank in favour of these programmes will be opposed by arguments made by advocates of the dependency theory and world system theory (Kelly, 2008, pp.320-321; Wallerstein, 1980, pp.66-69).
The second research aim focuses on the causes and impacts of the SAPs on the Rwandan economy. The SAPs will be presented in a wider context which will include demands for democracy and a peace process between the Rwandan Government and the Rwandan Patriotic Front (RPF) (Andersen, 2000, pp.450-452).
The third aim provides the nexus between the SAPs imposed on Rwanda and ethnic mobilisation. The focus will be on two aspects of the Rwandan economy. First, the division of labour will be evaluated. This is essential as the SAPs were perceived as favouring the Tutsi dominated private sector (Storey, 1999, pp.53-55). Second, the issue of land scarcity and agricultural commercialisation will be assessed as Rwanda suffered a severe socio-economic imbalance (Uvin, 2001, pp.81-83).
The conclusion will summarise that SAPs, in combination with demands for democratisation and peace negotiations, did not consider the implications of the reforms for the socio-economic and political environment. The disregard for the wider implications supported radical ideologies which were responsible for the genocide.
The structure of western capitalism was first evaluated by British philosophers and political economists in the seventeenth and eighteenth century (Peet, 2009, p.4). In the eighteenth century Adam Smith (1776), cited by Rothschild (1994, p.319), emphasised the “invisible hand of the market” which would enable growth by focusing on demand, competition and trade. This approach became known as classical liberalism. The early and mid-twentieth century was shaped by depression and war. Benefits of capitalism remained in the hands of the entrepreneurs and the employees demanded more rights and increased benefits in return for their labour (Peet, 2009, p.6). Keynes argued that governments have to intervene in the market in order to spread the benefits of market economies among all classes of society. This approach became known as the “New Deal” in the US and its policies were implemented from 1932 on (Niemi & Plante, 2011, p.414; Peet, 2009, p.6).
In 1944 the Allied countries met in Bretton Woods to discuss the post-war economic order (Rowden, p.2009, p.53). Their aim was to implement institutions which could finance the rebuilding of Europe and oversee international trade and finance to avoid a financial crisis in the future. Keynes is often accredited with the establishment of the IMF and World Bank. However, Keynes did not suggest the IMF and World Bank in the form the institutions were finally set up. He was rather focused on maintaining trade balances between states. The IMF was established to ensure a fixed exchange which tied currencies to the US Dollar and gold standard (Rowden, 2009, pp.55-56). The World Bank was to finance the reconstruction and development of the European economy. From the mid-1970s on Keynesianism was opposed by neoliberals who advocated the ideas of classical liberalism and argued in favour of privatisation of state-run enterprises and deregulation of the market (Peet, 2009, p.9; Palley, 2004, pp.1-2).
Palley argues that neoliberalism is based on the assumptions that factors of production, such as labour and capital, are automatically allocated in the most efficient way. Von Hayek, the most influential critic of Keynesianism, argued that the freedom of individuals to pursue their own ambitions and limited possibilities for governments to interfere in the market are essential for economic growth (Peet, 2009, pp.10-11). In the 1970s it became evident that Keynesianism was not able to solve problems of stagflation and businesses and corporations started to support neoliberal ideas of deregulation (Peet, 2009, p.12). Further, the ideological conflict during the Cold War period increased the support of neoliberal ideas. Individualism was associated with a free society. Collective action and limitations on the market were related to communism (Palley, 2004, p.3). The administrations of Thatcher and Reagan adopted neoliberal policies in the early 1980s and many Western governments followed suit (Auerbach, 2007, p.33). The IMF changed its purpose and was now tasked to support developing states by providing financial support in the form of loans (Wayenberge, Fine, Bayliss, 2011, p.6).
During the time of Keynesian policies, developed states tolerated and even encouraged state interventions in developing states (Babb, 2005, p.200). However, the emergence of neoliberalism led to a change in development policies. The key characteristics of neoliberal development policies were laid down in the Washington Consensus (Auerbach, 2007, p.37 in Roy, Denzau, Willett). The policies of the Washington Consensus demanded financial deficits which are not higher than affordable. Further, expenditures were supposed to focus on benefits, health, education and infrastructure. In addition tax collection had to be more efficient, trade had to be liberalised and controls for exchange rates had to be removed. State owned enterprises had to be privatised and incentives for foreign direct investments (FDI) had to be established (Auerbach, 2007, p.37).
During the 1970s many developing states were unable to service loans taken during the oil crisis in 1973/74 (Rowden, 2009, p.65). The IMF agreed to the restructuring of the debt if the debtor states implemented SAPs. Further, the IMF demanded that in the future multilateral and bilateral aid was only to be paid after the approval by the IMF. States which were unwilling to implement SAPs were threatened with the withdrawal of future support by the IMF and World Bank. Other donors, such as multilateral institutions, bilateral donors and private banks, followed the guidance by the IMF and denied financial support if the IMF advised against it (Rowden, 2009, pp.66-68). Critics, such as Lapeyre (2004), cited by (Rowden, 2009, p.66), opposed these measures and argued that SAPs lead to a loss of state autonomy. Fiscal policies were dictated by the IMF and World Bank and states were unable to choose their own development policies. However, Reagan and Thatcher made clear that market liberalisation was the only alternative and donor agencies, central banks and many developing states believed in neoliberal policies (Sachs, 2005, p.81; Rowden, 2009, pp.68-69). Further, many developing states adopted these measures in the hope of becoming members of the World Trade Organization and in order to attract FDI.
Neoliberal policies are opposed by advocates of the dependency theory and world system theory. During the decolonialisation process after World War II advocates of the modernization theory argued that all states follow the same path from poverty to modernization (Rowden, 2009, p.57). Due to poverty and slow or non-existent development towards the end of the 1960s it became clear that former colonies could not follow the development path which was taken by developed countries in the past. Dependency theory draws its ideas from Marxism and argues that the intrastate division between the proletariat and bourgeoisie equals the interstate relations between the core and the periphery (Kelly, 2008, p.320). Proponents of the dependency theory, for example Prebisch (1950) and Frank (1967), wrote that former colonies became economically and politically dependent on their former colonial powers. Subsequently, the dependence of periphery states on the core states is the main characteristics of the global economy.
These claims were further developed by Wallerstein (1980, pp.66-69) who supported the world systems theory and argued that the periphery is exploited by the core states of mainly North America and Europe. The world system theory claims that the global economy is characterised by a well developed core based on high technology and a highly skilled labour force which requires a periphery from which it can extract surplus (Chirot & Hall, 1982, p.85). Advocates of both theories argue that developing states have to resist a post-colonial system of trade and finance in which states of the periphery serve the role of commodity producer and provider of cheap labour. Otherwise the states of the periphery will not be able to move towards industrialisation and remain dependent on the states of the core (Rowden, 2009, p.57).
Harrison (2010, p.36) writes about the impact of neoliberal policies in Africa and argues that socio-economic recovery was not achieved to date. Harrison (2010, p.39) cites Chazan et al. (1999) who writes that by the end of 1980s thirty six states in Africa implemented SAPs and ten years later the economy of twenty nine African states were still shaped by adjustment programmes. Harrison (2010, p.39) describes SAPs as the “development orthodoxy for the continent”. In some cases the SAPs considered country specific circumstances, but the key elements of all SAPs remained the same and mirrored the policies of the “Washington Consensus”.
The implications of SAPs and demands which accompanied these became evident in Rwanda in the early 1990s. The Rwandan Genocide of 1994 during which 800,000 Tutsis and moderate Hutus were killed has been widely covered in the media and in academic work (Kamola, 2007, p.571; Magnarella, 2005, p.816). However, the implications of an economic crisis and subsequent reforms in the early 1990s were hardly mentioned (Chossudovsky, 1997, p.111). The post-colonial economy of Rwanda was dominated by coffee exports which made up eighty percent of the state’s export earnings (Chossudovsky, 1997, p.114). In the early 1980s the supply of food per capita decreased due to environmental degradation and further population growth (World Bank, 1991a, p.v; Storey, 1999, pp.49-50). Furthermore, in 1986 the commodity prices for coffee started to decrease due to overproduction and Rwanda lost nearly two thirds of its revenue generated by coffee exports (Kamola, 2007, p.583). The GDP per capita fell by nearly 30 percent and poverty increased from 40 percent in 1985 to 53 percent in 1992 (Uvin, 1998, p.54; World Bank,1994, i). The civil war between the Hutu dominated government and exiled Tutsis in Uganda who established the RPF and attacked Rwanda from 1990 on further deteriorated the financial situation of Rwanda (Magnarella, 2005, p.812; Uvin, 1998, pp.55-56).
Financial resources were focused on the war effort and the displacement of large numbers of the population further decreased agricultural production. In order to maintain its expenditures the Rwandan Government had to increase its foreign debt significantly (Kamola, 2007, p.584; Prunier, 1995, p.159). Moreover, farmers were guaranteed by the government to receive a fixed amount for their coffee production. This amount was decreased by 20 percent in order to reduce government spending (Kamola, 2007, p.584). As a result many farmers replaced their cash crops with food crops as the sale of coffee did not cover the investments anymore.
In 1991 Rwanda received $90 million of loans from the World Bank (Uvin, 1998, p.58; Kamola, 2007, pp.583-585). In return the Rwandan Government had to agree to the implementation of SAPs. Fiscal discipline was expected, the government had to privatise large numbers of state owned enterprises and markets were to be liberalised. Despite the increasing socio-economic imbalance the World Bank recommended that the focus should be on cash crops rather than food crops in order to increase export earnings. The World Bank argued that the earnings could be used to purchase food – “once you have income you can buy food” (World Bank, 1991a, p.vi; p.xi). Coffee exports were supposed to be increased, inter alia, by a devaluation of the Rwandan Franc.
However, the devaluation led to an inflation of nearly 20 percent in 1992. According to the World Bank (1991b, p.4) the benefits of structural adjustment loans would include increased employment in the private sector. Moreover, the civil service was considered as ineffective and had to be reformed (World Bank, 1991b, p.16).) Fees for education, water supply and medical care were raised and sales tax was increased (Uvin, 1998, p.58; World Bank, 1991b, p.6). Despite these measures the Rwandan foreign debt increased further. Uvin (1998, p.59) argues that the SAPs are not responsible for the financial pressure on many Rwandans since the majority of them were never implemented. However, this argument is opposed by a report in which the World Bank (1997, p.12) claims that most of the reforms were indeed implemented by the Rwandan Government.
To assess the implications of the IMF and the World Bank in the build-up to the genocide it is essential to widen the scope of this evaluation. This is necessary in order to include the demands for democratisation and peace negotiations which were made in return for financial aid (Andersen, 2000, pp.447-450; Uvin, 1998, p.59). Andersen (2000, p.450) argues that the establishment of a democratic system is necessary to establish stability and to promote development. Nonetheless, it is of significant importance to choose the right timing in order to ensure political unity during the peace process. Opposing views during a peace process may destabilise the consolidation process. Due to the pressure of the IMF and World Bank a new Rwandan Government was formed in 1992 and the opposition parties increased their power (Adelman & Suhrke, 1996, cited by Andersen, 2000, p.449).
Radical parties, such as the “Coalition pour la Défense de la République” (CDR) and the “Mouvement Démocratique Républicain” (MRD), were established and openly presented their anti-Tutsi ideology. Both parties played a significant role in the spread of hate speech and the preparation and implementation of the genocide (Andersen, 2000, p.449). In addition, as part of the peace process the then-President of Rwanda Habyarimana agreed to a power sharing deal with the RPF. The CDR and MRD accused the government of not being determined enough to oppose the RPF and gained significant support amongst Hutu elites (Prunier, 1995, p.128). However, to meet the demands of the Rwandan Government and the donors at the same time proved to be an obstacle Habyarimana could not overcome. Andersen (2000, p.451) described the conditions made by international donors as “a match igniting the conflict”.
In order to establish a link between the genocide and the SAPs it is necessary to assess these in the wider context of the Rwandan labour market and the resource scarcity which occurred in Rwanda (Storey, 1999, p.51; Uvin, 2001, pp.81-83). Middle and upper level positions in the public service and the military were only available to Hutus and due to government sponsored discrimination Tutsis focused mainly on the work in the private sector (Storey, 1999, p.51; Prunier, 1995, p.75). As part of the democratisation process a new liberal party emerged and the common perception was that this party was dominated by Tutsi businessmen. Hutu extremists claimed that Tutsis attempted to set up a commercial elite in Rwanda in order to redirect funds to the RPF (Storey, 1999, p.51). However, most of the businessmen in Rwanda were Hutu and the large majority of Tutsis had the same living standard as Hutus (Woodward, 1996, cited by Storey, 1999, p.52). The nexus between SAPs and the division of labour is, in the social context of pre-genocide Rwanda, to be found in hate speech which established perceptions rather than facts. As mentioned before, SAPs demanded increased support of the private sector and cuts for the public sector. Therefore, the perception was that Tutsis were favoured by the SAPs and many Hutu elites in the public sector feared to lose their employment and subsequently influence.
Uvin (2001, p.82) argues that resource scarcity can be assessed using the Malthusian argument according to which land scarcity and overpopulation lead to conflict or famine. This argument is supported by a statement made by the Ogata, the UN High Commissioner for Refugees (Berry & Berry, 1999, quoted in Uvin, 2001, p.82). Ogata argued that the conflict in Rwanda was based on a severe imbalance between the size of the population and available land. Land scarcity has to be considered in reference to the SAPs as the IMF and the World Bank demanded that the agricultural sector should focus on cash crops, e.g. coffee and tea, in order to increase revenues. The amount of food crops was to be reduced, but the decline in commodity prices did not create the revenues Rwanda hoped for. The statement: “once you have income you can buy food” (World Bank, 1991a, p.vi; p.xi) did not apply in Rwanda as income did not increase. Subsequently, the imbalance between the amount of food available and the population increased further (Magnarella, 2005, p.817).
Wood (2001, p.64) argues that especially in poorer states ethnicity plays a significant role in economic and social differentiation. Poverty, overpopulation, land scarcity, possible famine and competition for power offer fertile ground for the ideology of Lebensraum. This ideology is advanced by extremist forces in order to accumulate resources which are currently not available to their people. This ideology was implemented in Rwanda to describe Tutsis as invaders who are responsible for the socio-economic imbalance. Prunier (1995, p.160) writes that the combination of low coffee prices, the war and SAPs only further damaged an already weak economy and increased the financial pressure on many Rwandans.
The development policy of the industrialised states changed with the emergence of neoliberal policies. Neoliberals argued in favour of the liberalisation of markets and decreased influence of the government. Development policies became enshrined in the Washington Consensus which argues that SAPs would lead to economic stability. Government spending was to be reduced, privatisation of government owned enterprises was demanded and the currency was supposed to be devalued in order to increase exports. Advocates of the dependency theory and world system theory claimed that neoliberalism is not suitable to foster development, but instead increases the dependency of the periphery states on the core states. In the case of Rwanda it is evident that SAPs worsened the economic situation of Rwanda. Further, the SAPs had significant effects on the wider social and political environment. Demands for democratisation and peace negotiations led to the emergence of radical parties which took advantage of the fears of many Rwandans. People feared poverty, job loss and a famine in addition to a civil war. The causes of the genocide are multiple and no direct link can be established between the demands made by the IMF and World Bank and the genocide. However, in hindsight it is evident that demands for SAPs accompanied by demands for democratisation and peace agreements did not consider the wider political and social context. These factors helped to create an environment in which Hutu radicals found a significant number of Rwandans who supported their ideology which subsequently led to the genocide.
Bibliography
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Harrison, G. (2010). Neoliberal Africa: The impact of global social engineering. New York: Palgrave McMillan.
Kamola, I. (2007). The Global Coffee Economy and the Production of Genocide in Rwanda. Third World Quarterly, 28 (3), 571-592.
Kelly, R. (2008). No “return to the state”: dependency and developmentalism against neoliberalism. Development in Practice, 18(3), 319-332.
Magnarella, P. (2005). The Background and Causes of the Genocide in Rwanda. Journal of International Criminal Justice, 3, 801-822.
Nienmi, W. & Plante, D. (2011). The Great Recession, Liberalism, and the Meaning of the New Deal. New Political Science, 33 (4), 413-427.
Palley, T. (2004). From Keynesianism to Neoliberalism: Shifting paradigms in economics. Received, October 15, 2011 from http://www.thomaspalley.com/docs/articles/selected/Neo-liberalism%20-20chapter.pdf
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Rothschild, E. (1994). Adam Smith and the Invisible Hand. The American Economic Review, 84 (2), 319-322.
Rowden, R. (2009). The deadly ideas of neoliberalism: How the IMF has undermined public health and the fight against AIDS. New York: Zed Books.
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Storey, A. (1999). Economics and Ethnic Conflict: Structural adjustment in Rwanda. Development Policy Review, 17, 43-63.
Storey, A. (2001). Structural adjustment, state power and genocide: the World Bank and Rwanda. Review of African Political Economy, 28 (89), 365-385.
Uvin, P. (1998). Aiding Violence: The development enterprise in Rwanda. West Hartford: Kumarian Press.
Uvin, P. (2001). Reading the Rwanda Genocide. International Studies Review, 3(3), 75-99.
Wood, W. (2001). Geographic Aspects of Genocide. A Comparison of Bosnia and Rwanda. Transactions of the Institute of British Geographers, 26(1), 57-75.
Wallerstein, I. (1980). Capitalist World Economy. London: Cambridge University Press.
World Bank (1991a). Rwanda – Agricultural Strategy Review. Retrieved November 24, 2011, from http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK= 64193027&piPK=64187937&theSitePK=523679&menuPK=64154159&searchMenuPK=64258544&theSitePK=523679&entityID=000009265_3960929124407&searchMenuPK=64258544&theSitePK=523679
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Written by: Thomas Hauschildt
Written at: University of Portsmouth
Written for: Global Political Economy
Date written: 12/2011
Labels: GENOCIDE, IMF, NEOLIBERALISM, RWANDA, SAP, World Bank
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COMMENT - This is a letter Antonia Juhasz sent to the New York Times back in 2004, in response to their refusal to list the real reason for the state of Zimbabwe's healthcare system in 2004. A complete article addressing what happened here:
The Tragic Tale of the IMF in Zimbabwe, by Antonia Juhasz, on
March 7th, 2004.
Zimbabwe's Health Crisis
by Antonia Juhasz, The New York Times
February 15th, 2004
To the Editor:
You expose the devastating condition of Zimbabwe's health care system (front page, Feb. 5), but with one glaring flaw: you offer no apparent cause, and therefore no solution.
According to the International Monetary Fund itself, spending per head on health care in Zimbabwe fell by a third from 1990 to 1996 when an I.M.F.-imposed structural adjustment program was introduced.
Unicef reported that in just three years under the program, the quality of health services had declined by 30 percent; twice as many women were dying in childbirth in Harare hospitals; and fewer people were visiting clinics and hospitals because they could not afford user fees.
Such structural adjustment programs require nations to drastically cut budgets — particularly in social services — and to increase fees on impoverished users as conditions of receipt of loans or reductions in debt.
Zimbabwe's health care crisis is no mystery. The mystery is that the solution — canceling its debts, canceling all I.M.F. (and World Bank) conditions on spending priorities, and channeling the necessary funds from the international community directly into health care — has not happened sooner and in more countries.
ANTONIA JUHASZ
Project Director, International Forum on Globalization
San Francisco, Feb. 5, 2004
Labels: HEALTHCARE, IMF, SAP, ZIMBABWE
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COMMENT - This is what happens to governments who do not follow the supply side economics dictated to them by the IMF/World Bank. In the words of President Kenneth Kaunda:
While as our intentions were genuine and straight forward, and the results of what we planned to do and, indeed began to do, were showing some truly wonderful results, we were affected by the negative reaction from IMF, World Bank, and some donor governments.
Economic sanctions were imposed on our government. Assistance was withheld. We were isolated. Africa and debtor governments did not come to us in support. However, at that time, we registered a record- high economic growth. But the various measures against us weakened the economy. Eventually, we had little choice but to go back onto an IMF and World Bank programme.
Zambia’s IMF break: Lessons for Latin America
By Dr Kenneth D. Kaunda
Posted by Editor on May 21, 2007
That day, on
May 1, 1987, as we broke off from the IMF Structural Adjustment Programme, I continued to announce the pillars of our home-grown New Economic Recovery Programme. Our programme holds lessons for the direction our brothers and sisters in Latin America have recently taken.
That day, besides other measures we discussed in this column in the past two weeks, measures like limits to debt service rations, I talked about the crucial task of restructuring and improving the economy.
“It is important,” I said, “that we fully comprehend what, in this development strategy, we mean by a restructuring of the economy and what we aim to achieve by it.”
“We aim to improve the productivity of our economy by increasing the capacity utilisation of the selected sectors and industries within those sectors. In the short term, our priority will be sectors and industries which produce essential or basic needs goods for which there are as yet no domestic substitutes and those that produce exportables.”
We decided that, for this restructuring exercise to succeed, it was going to be necessary that imports were “restricted to the barest minimum, except for strictly essential items, services, raw materials as well as machinery required for increasing capacity utilisation in agriculture and the selected industries.”
Together with restructuring the economy was the equally important task of diversification. In our context, diversification entailed “development of new bases for export as well as revenue and employment generation.”
A vigorous export drive was launched and centred on the promotion of non-traditional exports and export of manufactured goods as against the export of raw materials.
To support diversification, we set up an Import and Export Bank. This was to remove the extra burden imposed on exporters of non-traditional commodities as they struggled on their own to find export markets and then worry about receipts of the foreign exchange they earned from their initiatives.
The Bank was created to ensure that those producing for the export market would concentrate on increasing the production of exportable goods. Using various institutions and facilities, small-scale producers would be supported to increase production. We truly aimed to mount a massive export drive that would also involve small-scale rural producers.
For income support, we noted that the rate of unemployment had reached alarming promotions. We had to take measures to arrest that serious situation. Our first priority was to mobilise as large a section of our human power as possible to participate actively in the production of goods and services.
“In other words,” I noted, “we wish to see a reversal of the trend of the recent past in which the number of people in formal employment has sharply declined. What we now want to see is a steady and consistent growth of the active labour force. In order to bring this about the Party and its government have worked out the following measurers…”
“The Government shall inject resources into the expansion of public works schemes for temporary employment generation for the un-employed. Projects such as irrigation schemes and temporary income support programmes for the urban and rural unemployed will be initiated. Work will be offered to beneficiaries related to their own living conditions and aimed at increasing the purchasing power of the masses.”
“The masses will be mobilised to work on pavements, sanitation, painting Government houses, rehabilitation of water supply lines, clinics, schools, repairing roads and even planting trees. Most of these projects will be sited in the rural areas.”
Government was to increase public expenditure on capital projects, particularly investment projects that were low-cost, and with short-maturities. Foremost, in a society of “humanism,” where the human being was placed at the centre of activities, we cared much for the situation of workers and their families.
“Workers in all sectors of the economy have endured great hardships over the past two years and tempers have often become frayed. We need to find a common will among unions, employers and government to determine a fair basis on which wages can be negotiated. The Prices and Incomes Commission should play its intended role in this regard.”
We felt we needed to act for fairness for both the worker and enterprises they work with:
“The Government shall establish a realistic wages policy with a minimum living wage. After inflation has been contained, the Prices and Incomes Commission shall come up with a minimum wage on the basis of which annual person in gainful employment are paid enough to satisfy their basic needs and those of their immediate dependants.”
In our plans, the channel of government funds to projects in rural areas and small towns was to be decentralised. “I am, therefore, instructing the National Commission for Development Planning and the Ministry of Decentralization to draw up estimates of funds which can be absorbed by economically productive ventures in each province.”
The projects were to be practical: “these should be projects of short duration, which can show a return on investment within one or two years. This will demonstrate the viability of our new economic strategy. It will also raise the morale of those economically depressed regions and begin to plot a course for their future development.”
Effective management was essential for success of our home-grown economic programme:
“The success of these measures will depend upon each of us individually as well as collectively but greater responsibility lies on those of us who have a direct role to play as employers, employees, businessmen, public officers and leaders.”
One limitation was that the public service had lost many able officials because of uncompetitive conditions of service.
“Fellow countrymen, Comrades, Brothers and Sisters,” I began to conclude, “this, then, is the new package of economic measures I have decided to announce to you today and it is my earnest hope that the nation will rise to the challenges that face it and chart its own path towards economic recovery and sustained growth.
I was aware that our position made some people and creditors uncomfortable. So, I considered them: “Finally, may I now address myself to all supporters – nations or organisations. Friends, we chose the way of IMF of our own free will. Again of our own free we have decided to try another way.”
“We did not, I believe, offend anyone when we employed IMF methods. I believe we shall offend no one now when we choose this other way. I do not wish anyone of our supporters – donor country or donor organization – to think this is a parting of ways. I ask them, may I appeal to them, to see this as a charting out of another way that we think offers us better chances of a recovery, all things being equal.”
“I, therefore, hope and pray that no one will see in this perfectly normal attempt to break the vicious circle into which we have been thrown by forces completely out of our control, a spirit to confront anyone. With background it must be clear to all friends that we are going to continue to knock at their doors for support for this programme in the same way as we have done during the past ten years or so… May God bless and guide the Republic. Thank you.”
To you, my reader, I want to say that those events were twenty years ago this month. We had decided, as a nation, to use our own methods and rebuild our economy outside the World Bank and IMF programmes.
While as our intentions were genuine and straight forward, and the results of what we planned to do and, indeed began to do, were showing some truly wonderful results, we were affected by the negative reaction from IMF, World Bank, and some donor governments.
Economic sanctions were imposed on our government. Assistance was withheld. We were isolated. Africa and debtor governments did not come to us in support. However, at that time. we registered a record- high economic growth. But the various measures against us weakened the economy. Eventually, we had little choice but to go back onto an IMF and World Bank programme.
There was no doubt, in my mind, and indeed there is still no doubt in my mind today, that our home grown programme, if supported by the two organisations and some members from the donor community, would have set us on a terrific economic recovery programme.
I feel that had our protest action been supported or done by a good number of African governments suffering economically in the same way as Zambia was doing – and we know there were many like us – the situation, in terms of some members of the IMF, World Bank, and donor community could have been different. Up to this point in time, twenty years later, no one can convince me that the reaction of those donors as they reacted against our new programme had no ulterior motive.
I believe that they felt that our programme was going to set a “bad example” to others suffering as we were doing. This home-grown programme I have outlined was redemption for the poor. But those who did not want to see Third World countries develop from their own resources, without interference from investors,” did not support our programme. The reaction of World Bank, IMF, and some creditors frightened many other people away from our path.
What does this hold for Latin America led by Venezuela, led by Hugo Chavez, Bolivia with Evo Morales, Lula and Brazil, and their colleagues in Argentina, Ecuador, Paraguay, who are also following in nationalistic and patriotic ways, ways which some of us admire very much?
{xtypo_quote_left}
While I send a message warning our Latin America colleagues about the possibility of angry reactions by investors, one has to say that leaders in Latin America are truly representing their people’s interests very well. To begin with, a good number of them are taking measures to control their resources.{/xtypo_quote_left}
Apart from that, giving us hope was the recent announcement by minister of finance of Venezuela to the effect that Latin American countries such as Venezuela, Ecuador, Brazil, Bolivia, and Paraguay, were to sign a document leading to the creation of a financial institution in June 2007. It may be easier to overcome poverty because they are aware of many things about the continent. They will want to re-organise economic relationships involving developed and developing nations.
With this movement by Latin American countries, because of steps they have taken, things may be different from the treatment they may get from those who pounced on us when we took our action in May 1987. I believe this is a beginning of true independence in Latin America. It is also an example for Africa. This is not only political independence but they are beginning to firmly take control of their resources firmly.
But they also must learn from Zambia’s experience and prepare themselves so that they are not put in some position that will make them retract from the noble path towards economic and social justice.
We hope and pray that other parts of the world will learn from what our colleagues are doing in terms of looking after their natural resources for the good of the millions of their poverty-stricken people.
We hope the lessons of May 1, 1987, twenty years ago this month, will be available for others in this world, and right at this time. We hope that the courageous and truthful action will help us to act in a more effective way towards economic justice.
Labels: IMF, KENNETH KAUNDA, SAP
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Zambia’s IMF break: Lessons for Latin America
By Dr Kenneth D. Kaunda
Posted by Editor on May 21, 2007
That day, on
May 1, 1987, as we broke off from the IMF Structural Adjustment Programme, I continued to announce the pillars of our home-grown New Economic Recovery Programme. Our programme holds lessons for the direction our brothers and sisters in Latin America have recently taken.
That day, besides other measures we discussed in this column in the past two weeks, measures like limits to debt service rations, I talked about the crucial task of restructuring and improving the economy.
“It is important,” I said, “that we fully comprehend what, in this development strategy, we mean by a restructuring of the economy and what we aim to achieve by it.”
“We aim to improve the productivity of our economy by increasing the capacity utilisation of the selected sectors and industries within those sectors. In the short term, our priority will be sectors and industries which produce essential or basic needs goods for which there are as yet no domestic substitutes and those that produce exportables.”
We decided that, for this restructuring exercise to succeed, it was going to be necessary that imports were “restricted to the barest minimum, except for strictly essential items, services, raw materials as well as machinery required for increasing capacity utilisation in agriculture and the selected industries.”
Together with restructuring the economy was the equally important task of diversification. In our context, diversification entailed “development of new bases for export as well as revenue and employment generation.”
A vigorous export drive was launched and centred on the promotion of non-traditional exports and export of manufactured goods as against the export of raw materials.
To support diversification, we set up an Import and Export Bank. This was to remove the extra burden imposed on exporters of non-traditional commodities as they struggled on their own to find export markets and then worry about receipts of the foreign exchange they earned from their initiatives.
The Bank was created to ensure that those producing for the export market would concentrate on increasing the production of exportable goods. Using various institutions and facilities, small-scale producers would be supported to increase production. We truly aimed to mount a massive export drive that would also involve small-scale rural producers.
For income support, we noted that the rate of unemployment had reached alarming promotions. We had to take measures to arrest that serious situation. Our first priority was to mobilise as large a section of our human power as possible to participate actively in the production of goods and services.
“In other words,” I noted, “we wish to see a reversal of the trend of the recent past in which the number of people in formal employment has sharply declined. What we now want to see is a steady and consistent growth of the active labour force. In order to bring this about the Party and its government have worked out the following measurers…”
{xtypo_quote_left} “The Government shall inject resources into the expansion of public works schemes for temporary employment generation for the un-employed. Projects such as irrigation schemes and temporary income support programmes for the urban and rural unemployed will be initiated. Work will be offered to beneficiaries related to their own living conditions and aimed at increasing the purchasing power of the masses.”{/xtypo_quote_left}
“The masses will be mobilised to work on pavements, sanitation, painting Government houses, rehabilitation of water supply lines, clinics, schools, repairing roads and even planting trees. Most of these projects will be sited in the rural areas.”
Government was to increase public expenditure on capital projects, particularly investment projects that were low-cost, and with short-maturities. Foremost, in a society of “humanism,” where the human being was placed at the centre of activities, we cared much for the situation of workers and their families.
“Workers in all sectors of the economy have endured great hardships over the past two years and tempers have often become frayed. We need to find a common will among unions, employers and government to determine a fair basis on which wages can be negotiated. The Prices and Incomes Commission should play its intended role in this regard.”
We felt we needed to act for fairness for both the worker and enterprises they work with:
“The Government shall establish a realistic wages policy with a minimum living wage. After inflation has been contained, the Prices and Incomes Commission shall come up with a minimum wage on the basis of which annual person in gainful employment are paid enough to satisfy their basic needs and those of their immediate dependants.”
In our plans, the channel of government funds to projects in rural areas and small towns was to be decentralised. “I am, therefore, instructing the National Commission for Development Planning and the Ministry of Decentralization to draw up estimates of funds which can be absorbed by economically productive ventures in each province.”
The projects were to be practical: “these should be projects of short duration, which can show a return on investment within one or two years. This will demonstrate the viability of our new economic strategy. It will also raise the morale of those economically depressed regions and begin to plot a course for their future development.”
Effective management was essential for success of our home-grown economic programme: “The success of these measures will depend upon each of us individually as well as collectively but greater responsibility lies on those of us who have a direct role to play as employers, employees, businessmen, public officers and leaders.”
One limitation was that the public service had lost many able officials because of uncompetitive conditions of service.
{xtypo_quote_right} “Fellow countrymen, Comrades, Brothers and Sisters,” I began to conclude, “this, then, is the new package of economic measures I have decided to announce to you today and it is my earnest hope that the nation will rise to the challenges that face it and chart its own path towards economic recovery and sustained growth.{/xtypo_quote_right}
I was aware that our position made some people and creditors uncomfortable. So, I considered them: “Finally, may I now address myself to all supporters – nations or organisations. Friends, we chose the way of IMF of our own free will. Again of our own free we have decided to try another way.”
“We did not, I believe, offend anyone when we employed IMF methods. I believe we shall offend no one now when we choose this other way. I do not wish anyone of our supporters – donor country or donor organization – to think this is a parting of ways. I ask them, may I appeal to them, to see this as a charting out of another way that we think offers us better chances of a recovery, all things being equal.”
“I, therefore, hope and pray that no one will see in this perfectly normal attempt to break the vicious circle into which we have been thrown by forces completely out of our control, a spirit to confront anyone. With background it must be clear to all friends that we are going to continue to knock at their doors for support for this programme in the same way as we have done during the past ten years or so… May God bless and guide the Republic. Thank you.”
To you, my reader, I want to say that those events were twenty years ago this month. We had decided, as a nation, to use our own methods and rebuild our economy outside the World Bank and IMF programmes.
While as our intentions were genuine and straight forward, and the results of what we planned to do and, indeed began to do, were showing some truly wonderful results, we were affected by the negative reaction from IMF, World Bank, and some donor governments.
Economic sanctions were imposed on our government. Assistance was withheld. We were isolated. Africa and debtor governments did not come to us in support. However, at that time. we registered a record- high economic growth. But the various measures against us weakened the economy. Eventually, we had little choice but to go back onto an IMF and World Bank programme.
There was no doubt, in my mind, and indeed there is still no doubt in my mind today, that our home grown programme, if supported by the two organisations and some members from the donor community, would have set us on a terrific economic recovery programme.
I feel that had our protest action been supported or done by a good number of African governments suffering economically in the same way as Zambia was doing – and we know there were many like us – the situation, in terms of some members of the IMF, World Bank, and donor community could have been different. Up to this point in time, twenty years later, no one can convince me that the reaction of those donors as they reacted against our new programme had no ulterior motive.
I believe that they felt that our programme was going to set a “bad example” to others suffering as we were doing. This home-grown programme I have outlined was redemption for the poor. But those who did not want to see Third World countries develop from their own resources, without interference from investors,” did not support our programme. The reaction of World Bank, IMF, and some creditors frightened many other people away from our path.
What does this hold for Latin America led by Venezuela, led by Hugo Chavez, Bolivia with Evo Morales, Lula and Brazil, and their colleagues in Argentina, Ecuador, Paraguay, who are also following in nationalistic and patriotic ways, ways which some of us admire very much?
{xtypo_quote_left}
While I send a message warning our Latin America colleagues about the possibility of angry reactions by investors, one has to say that leaders in Latin America are truly representing their people’s interests very well. To begin with, a good number of them are taking measures to control their resources.{/xtypo_quote_left}
Apart from that, giving us hope was the recent announcement by minister of finance of Venezuela to the effect that Latin American countries such as Venezuela, Ecuador, Brazil, Bolivia, and Paraguay, were to sign a document leading to the creation of a financial institution in June 2007. It may be easier to overcome poverty because they are aware of many things about the continent. They will want to re-organise economic relationships involving developed and developing nations.
With this movement by Latin American countries, because of steps they have taken, things may be different from the treatment they may get from those who pounced on us when we took our action in May 1987. I believe this is a beginning of true independence in Latin America. It is also an example for Africa. This is not only political independence but they are beginning to firmly take control of their resources firmly.
But they also must learn from Zambia’s experience and prepare themselves so that they are not put in some position that will make them retract from the noble path towards economic and social justice.
We hope and pray that other parts of the world will learn from what our colleagues are doing in terms of looking after their natural resources for the good of the millions of their poverty-stricken people.
We hope the lessons of May 1, 1987, twenty years ago this month, will be available for others in this world, and right at this time. We hope that the courageous and truthful action will help us to act in a more effective way towards economic justice.
Labels: IMF, KENNETH KAUNDA, SAP
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COMMENT - All the links to the external articles are in the original article. This is the destruction that structural adjustment and austerity cause wherever they are applied. So why are they applied, and who benefits? Who is not paying taxes? Royal Dutch Shell, Chevron. Who owns their shares? That's who benefits.
The IMF and US African Command (AFRICOM) Join Hands in the Plunder of the African Continent
by Nile Bowie
Global Research, January 6, 2012
Lagos Dissents Under IMF Hegemony
Nigeria: The Next Front for AFRICOM
On a recent trip to West Africa, the newly appointed managing director of the International Monetary Fund,
Christine Lagarde ordered the governments of Nigeria, Guinea, Cameroon, Ghana and Chad to relinquish vital fuel subsidies. Much to the dismay of the population of these nations, the prices of fuel and transport have near tripled over night without notice, causing widespread violence on the streets of the Nigerian capital of Abuja and its economic center, Lagos. Much like the IMF induced riots in Indonesia during the 1997 Asian Financial Crisis, public discontent in Nigeria is channelled towards an incompetent and self-serving domestic elite, compliant to the interests of fraudulent foreign institutions.
Although Nigeria holds the most proven oil reserves in Africa behind Libya, it’s people are now expected to pay a fee closer to what the average American pays for the cost of fuel, an exorbitant sum in contrast to its regional neighbours.
Alternatively, other oil producing nations such as Venezuela, Kuwait and Saudi Arabia offer their populations fuel for as little as $0.12 USD per gallon. While Lagos has one of Africa’s highest concentration of billionaires, the vast majority of the population struggle daily on less than $2.00 USD. Amid a staggering 47% youth unemployment rate and thousands of annual deaths related to preventable diseases, the IMF has pulled the rug out from under a nation where safe drinking water is a luxury to around 80% of it’s populace.
Although Nigeria produces 2.4 million barrels of crude oil a day intended for export use, the country struggles with generating sufficient electrical power and maintaining its infrastructure. Ironically enough, less than 6% of bank depositors own 88% of all bank deposits in Nigeria. Goldman Sachs employees line its domestic government, in addition to the former Vice President of the World Bank, Ngozi Okonjo-Iweala, who is widely considered by many to be the de facto Prime Minister. Even after decades of producing lucrative oil exports, Nigeria has failed to maintain it’s own refineries, forcing it to illogically purchase oil imports from other nations. Society at large has not benefited from Nigeria’s natural riches, so it comes as no surprise that a severe level of distrust is held towards the government, who claims the fuel subsidy needs to be lifted in order to divert funds towards improving the quality of life within the country.
Like so many other nations, Nigerian people have suffered from a systematically reduced living standard after being subjected to the IMF’s Structural Adjustment Policies (SAP). Before a loan can be taken from the World Bank or IMF, a country must first follow strict economic policies, which include currency devaluation, lifting of trade tariffs, the removal of subsidies and detrimental budget cuts to critical public sector health and education services.
SAPs encourage borrower countries to focus on the production and export of domestic commodities and resources to increase foreign exchange, which can often be subject to dramatic fluctuations in value. Without the protection of price controls and an authentic currency rate, extreme inflation and poverty subsist to the point of civil unrest, as seen in a wide array of countries around the world (usually in former colonial protectorates). The people of Nigeria have been one of the world’s most vocal against IMF-induced austerity measures, student protests have been met with heavy handed repression since 1986 and several times since then, resulting in hundreds of civilian deaths. As a testament to the success of the loan, the average laborer in Nigeria earned 35% more in the 1970’s than he would of in 2012.
Working through the direct representation of Western Financial Institutions and the IMF in Nigeria’s Government, a new IMF conditionality calls for the creation of a Sovereign Wealth Fund. Olusegun Aganga, the former Nigerian Minister of Finance commented on how the SWF was hastily pushed through and enacted prior to the countries national elections. If huge savings are amassed from oil exports and austerity measures, one cannot realistically expect that these funds will be invested towards infrastructure development based on the current track record of the Nigerian Government. Further more, it is increasingly more likely that any proceeds from a SWF would be beneficial to Western institutions and markets, which initially demanded its creation. Nigerian philanthropist Bukar Usman prophetically writes “I have genuine fears that the SWF would serve us no better than other foreign-recommended "remedies" which we had implemented to our own detriment in the past or are being pushed to implement today.”
The abrupt simultaneous removal of fuel subsidies in several West African nations is a clear indication of who is really in charge of things in post-colonial Africa. The timing of its cushion-less implementation could not be any worse, Nigeria’s president Goodluck Jonathan recently declared a state of emergency after forty people were killed in a church bombing on Christmas day, an act allegedly committed by the Islamist separatist group, Boko Haram. The group advocates dividing the predominately Muslim northern states from the Christian southern states, a similar predicament to the recent division of Sudan.
As the United States African Command (AFRICOM) begins to gain a foothold into the continent with its troops officially present in Eritrea and Uganda in an effort to maintain security and remove other theocratic religious groups such as the Lord’s Resistance Army, the sectarian violence in Nigeria provides a convenient pretext for military intervention in the continuing resource war. For further insight into this theory, it is interesting to note that United States Army War College in Carlisle, Pennsylvania conducted a series of African war game scenarios in preparation for the Pentagon’s expansion of AFRICOM under the Obama Administration.
In the presence of US State Department Officials, employees from The Rand Corporation and Israeli military personnel, a military exercise was undertaken which tested how AFRICOM would respond to a disintegrating Nigeria on the verge of collapse amidst civil war. The scenario envisioned rebel factions vying for control of the Niger Delta oil fields (the source of one of America’s top oil imports), which would potentially be secured by some 20,000 U.S. troops if a US-friendly coup failed to take place At a press conference at the House Armed Services Committee on March 13, 2008, AFRICOM Commander, General William Ward then went on to brazenly state the priority issue of America’s growing dependence on African oil would be furthered by AFRICOM operating under the principle theatre-goal of “combating terrorism”.
At an AFRICOM Conference held at Fort McNair on February 18, 2008, Vice Admiral Robert T. Moeller openly declared the guiding principle of AFRICOM was to protect “the free flow of natural resources from Africa to the global market”, before citing China’s increasing presence in the region as challenging to American interests. After the unwarranted snatch-and-grab regime change conducted in Libya, nurturing economic destabilization, civil unrest and sectarian conflict in Nigeria is an ultimately tangible effort to secure Africa’s second largest oil reserves. During the pillage of Libya, its SFW accounts worth over 1.2 billion USD were frozen and essentially absorbed by Franco-Anglo-American powers; it would realistic to assume that much the same would occur if Nigeria failed to comply with Western interests. While agents of foreign capital have already infiltrated its government, there is little doubt that Nigeria will become a new front in the War on Terror.
Nile Bowie is a freelance writer and photojournalist; he's regularly contributed to Tony Cartalucci's Land Destroyer Report and Alex Jones' Infowars.
Labels: AFRICOM, IMF, NEOCOLONIALISM, NEOLIBERALISM, SAP, World Bank
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Perverting the worker's struggle
By Tichaona Zindoga 23-05-2011
Harare - Since its formation in 1999, the MDC party led by Morgan Tsvangirai has been feted in some quarters as the embodiment of democracy in Zimbabwe. Over these years, President Robert Mugabe's Zanu-PF has consistently said the party is undemocratic and has a virulent culture of violence and dictatorship, claims that have been dismissed by Tsvangirai's supporters as cheap propaganda. However, a new book by a disgruntled founding member of the party, David Muzhuzha, has put Tsvangirai to the sword.
The writer details how Tsvangirai rapidly declined from being a workers' representative to a front for foreign and elitist local interests.
After Zimbabwe's government ill-advisedly adopted the Economic Structural Adjustment Programme at the behest of the Bretton Woods Institutions in 1990, resultant socio-economic problems provided fertile ground for an agitated working class.
This is one group that bore the brunt of retrenchments, cuts in social service spending and felt, largely justifiably so, that the revolutionary Zanu-PF party which made the Government had abandoned them for a dalliance with former colonisers who make the International Monetary Fund and the World Bank.
And so, apart from the pent-up emotions that registered themselves as strikes and boycotts, there were other seemingly bona fide 'Beyond ESAP' discussions that focused on reclaiming the workers lost glory and humanity.
In all this, the person of Morgan Tsvangirai, a former office orderly at a mine who had risen to the helm of the Zimbabwe Congress of Trade Unions, rose.
But just as the workers were expecting the improvement of their material being, using the vehicle of labour on the negotiating table with the government and the employers, Tsvangirai had other ideas.
Journalist David Muzhuzha, who was editor of the Zimbabwe Congress of Trade Unions newspaper The Worker and was a founding member of the Movement for Democratic Change in 1999, illustrates how Tsvangirai pilfered the cause of the worker for his own greedy political good in a new tell-all book titled 'Travesty of Democracy...The Untold Story'.
He relates how the Working People's Conventions in early 1999, tasked with discussing the 'Beyond Esap' programmes, were turned by Tsvangirai and his 'tribal loyalists' and a few non-governmental organizations into a vehicle for the creation of the MDC.
The decisive moment came on May 8, 1999 when ZCTU convened some 100 delegates at the Women's Bureau Centre in Harare two months after a similar meeting where the labour leadership was ostensibly asked by NGOs to form a political party.
Muzhuzha notes: 'As it eventually turned out, the labour movement's thinly-veiled pre-convention's desire to form a political party to rival Zanu-PF was endorsed by all participants.
'But the final position was carefully crafted to appear as if the ZCTU had been requested by civil society to facilitate the party formation - and not the other way round!'
Muzhuzha insinuates he even suggested the name 'Movement for Democratic Change' which was eventually officially adopted (pp16).
The writer is currently in the process of suing the party for not paying him anything for his contribution to the founding and for using the name 'MDC' without acknowledging him in any way.The result was the entry of Tsvangirai onto the grand stage with Muzhuzha remarking: 'It was clear from his new-found stride that that the convention had tightened his grip on the promising political outcome.'
Thus begun in earnest Tsvangirai's political journey with the formation of the MDC, its launch, growth and what Tsvangirai is today - the Prime Minister of the Republic of Zimbabwe.
But gone also were the pretensions at representing workers, who have watched as Tsvangirai has broken promise after promise to represent them in government.
Tsvangirai's secretary-general Tendai Biti, who is the Finance Minister, has been quite unequivocal in stating that workers should not expect improvements in their working conditions, citing 'growth remedies' prescribed by the same IMF and World Bank that spawned the policies in the 1990s that led to labour agitation.
Tsvangirai had the support of European and American trade union bodies that clandestinely funded his political run through ZCTU.
The same also facilitated funding for the MDC by sponsoring dubious lectures and seminars from which guest presenters got funds, as much as US$25 000, a major part of which was channelled to MDC.
The intentions of the Western forces are nowhere clearer than in the conversation Muzhuzha reportedly had with the German Fredrick Ebert Stiftung foundation's Dr Traub Merz.
Muzhuzha asked Traub-Merz 'to explain why the international donor community appeared oblivious of Tsvangirai's executive shortcomings . . .'
Replied Traub-Merz: 'We're aware of Morgan's administrative capacity limitations. But, we don't really care much about it because we need him for the politics. Tsvangirai, so far is our best bargaining chip against Mugabe.'
Thus the workers' cause that had been stolen by Tsvangirai was in turn pilfered by the West who saw an opportunity to make a go at President Mugabe who, not satisfied with defeating colonialism, sought to challenge the white status quo by redistributing land.
That was one of the main subjects of the constitutional deliberations that were going on at the time.
So when MDC and its allies in civil society ensured a 'NO' vote in a constitutional referendum in February 2000, it was the ultimate step for Tsvangirai and his gang to be accepted and used by the West.
The result was an upturn in MDC's fortunes and it becoming the rallying point for retrogressive forces of colonial extraction. Muzhuzha graphically captures it thus: 'I had witnessed the MDC sputter from May 1999 to end (of) January 2000, so, the immediate aftermath of the referendum meant that Tsvangirai and company had delivered their end of the bargain to foreign and local white masters, for a lot of money began to come their way to commence an elaborate campaign against the aspirations of millions of citizens, disguised as a movement for democratic change in Zimbabwe.
'That positive change in the MDC's coffers meant that foreign money, as well as that of local white farmers and industrialists, had started to flow in towards a single agenda that had not been revealed at the May 1999 conventions that led to the birth of the MDC.
'Desperate to sustain his political agenda, Tsvangirai had rallied his clique and sold out to the same sinister interests behind the ruinous (Economic Structural Adjustment Programme), the oppressive colonial rule, the continued unfair local white privileges and the devastating economic sanctions.
'Indeed all anti-Zimbabwe interests rolled into one gigantic onslaught against the democratic will of millions of Zimbabweans...'
MDC started showing its true colours, 'that it was a local white and Western-driven political party headed by a black man without the required national executive capacity to move forward Zimbabwe's desire for democratic change'.
The British government, through then British Minister for Africa David Triesman, weighed in saying the UK would not sit back and watch anti-Mugabe forces move on their own. 'Unthinkable,' he averred, 'Of course not.' And that was years before WikiLeaks told the world how embedded Western interests are in Tsvangirai's party.
'A travesty of Democracy...The Untold Story.' By David Muzhuzha. Jovid Press (2010).
Tsvangirai and his MDC thus became a Trojan horse in challenging the revolutionary ZANU-PF and President Mugabe.
Muzhuzha says the abandonment of the workers is best seen in the fact that only two 'labour ' people sit in the cabinet of Zimbabwe's coalition government and yet trade unions were ostensibly behind MDC's formation.
One of the major highlights of 'A Travesty of Democracy' is its portrayal of Tsvangirai as a 'tribalist' who from his days at the Zimbabwe Congress of Trade Unions surrounded himself with loyalists from his Karanga tribe.
As secretary-general and involved in the daily administration, he faced no threat from the likes of Gibson Sibanda, his president who was domiciled in Bulawayo and came but occasionally to Harare.
Even then, the powerful Bulawayo branch was significantly peopled with Karangas.
In fact, his being a 'dictator' and 'tribalist' is said to have caused the split in the party on October 12, 2005.
Some of the familiar names that Tsvangirai had in the ugly tribal embrace at the ZCTU and later at the inaugural congress in January 2000 include Tapiwa Mashakada, Isaac Matongo, Nelson Chamisa, Lucia Matibenga, Tendai Biti, Sekai Holland, Learnmore Jongwe, and Job Sikhala.
He even diluted another Ndebele tribal force that centered around the likes of Gibson Sibanda, Fletcher Dulini-Ncube and Welshman Ncube, among others.
Muzhuzha says of Tsvangirai; 'So not only is he whole-heartedly fascinated with men and women of his tribe, but he also sometimes… manipulates his party's processes to favour persons not of similar origins, as long as such persons serve the main selfish interest: to hold the reigns (sic) of power tightly and undisputedly, where ever he goes.'
The configuration of Harare's Parliamentary seats speaks volumes about Tsvangirai's ways.
Muzhuzha reports that when the MDC made its debut Parliamentary fight, of the 20 seats for a cosmopolitan Harare where there were many tribes and colours, no Asian, Coloured, Ndebele, Manyika or Mutoko person made it.
Of the 20, Muzhuzha recalls, one went to ZANU-PF and two went to white MDC candidates while the other 17 went to Tsvangirai's Karanga buddies.
When the inclusive Government line up on Tsvangirai's side was set up, it was tribally coloured.
Tendai Biti, Elton Mangoma, Tapiwa Mashakada, Eliphas Mukonoweshuro, Paurina Gwanyanya-Mpariwa, Henry Madzorera, Nelson Chamisa, Fidelis Mhashu, Heneri Dzinotyiwei, Jameson Timba, Sekai Holland, Obert Gutu, Sesel Zvidzai, Tichaona Mudzingwa and Tongai Matutu all made it in, Muzhuzha claims, because of their tribal background. Muzhuzha adds that in late August 2010 a mini-reshuffle produced the promotion of Mashakada, Gutu and Matutu.
Is this the ranting of a bitter man who feels he has not been well-rewarded for his role in the MDC? Perhaps.
But the book certainly makes for interesting reading into the inner workings of Tsvanfgirai's politics.
'A travesty of Democracy...The Untold Story.' By David Muzhuzha. Jovid Press (2010).
Labels: MDC, MORGAN TSVANGIRAI, NEOCOLONIALISM, SAP
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Engines behind economic growth
Saturday, 16 July 2011 10:56
By Gwendoline Mugauri
THEY were notorious for mismanagement of funds and leadership squabbles, but co-operatives, which were popularised at independence in 1980, are making a comeback. Perhaps the rot in co-operatives was exposed in 1999 when the then Ministry of National Affairs, Employment Creation and Co-operatives banned at least 62 of them for misappropriation of funds.
The co-operatives had suffered a slump when the Economic Structural Adjustment Programme was introduced in the early 1990s. They could not manage the swift market changes brought by the International Monetary Fund-sponsored programme.
Then came the recession of the last decade that eroded all co-operatives’ savings. Many wrote off the co-operatives because of the numerous problems they faced in terms of being productive. But things are taking a turn for the better as the co-operative enterprise is being revived to take its rightful place in the economy.
The commemoration of the International Day of Co-operatives recently revealed that co-operatives are indeed back with a bang. Vice-President Cde Joyce Mujuru said at the commemoration that co-operatives and other small businesses were now the “real engines of economic growth”.
Cde Mujuru said efforts to resuscitate co-operatives were progressing.
“Most governments create policies that are skewed towards the mainstream economic activities, considered to be the main players in the economy. Yet the real engines for economic growth such as SMEs and co-operatives are sidelined,” she said.
“Co-operatives have emerged as self-help groups, which contribute towards poverty alleviation of its members.”
Cde Mujuru said the youth and the disabled should take part in the development of co-operatives. She said co-operatives were a powerful instrument in the promotion of indigenisation and economic empowerment as members gain ownership of the means of production. The Government promulgated an official policy on co-operative development as early as 1984.
There are now registered co-operatives in a wide range of sectors such as mining, agriculture, manufacturing, housing, fishing, services and credit. For example, Mr Peter Mutekede, excelled in carpentry and dreamt of running a furniture company. His family was very sceptical about the whole idea. Little did they know that 10 years down the line, Mr Mutekede would become one of the best and most popular furniture manufacturers.
Who does not know about Glen View’s flourishing industry in household furniture, steel fabrication, upholstery, sculpturing and even coffin assembling? Mr Mutekede, who is now a successful businessman in his own right, is a proud member of the Glen View Furniture Co-operative and has his own Mutekede Investments company. His case came to the fore at the International Day of Co-operative commemorations.
Yet before the event, many questions were being asked on the state of co-operatives in the country. Are co-operatives still in existence? Are they genuine enterprises or they are just fraudulent little organisations? Do the co-operatives really benefit people? A total of 277 815 co-operatives were represented at the commemorations held in the Harare Gardens.
The president of the Zimbabwe National Co-operatives Federation, Mr Mike Duru, said co-operatives were alive and kicking.
“From 2004 to 2007, the co-operative sector dwindled slowly until a time when some banks closed and most people lost money they had saved,” he said.
“As the sector was eroded, a lot of people were not interested, resulting in many pulling out of co-operatives.”
Mr Duru said there was a lot of lobbying and policy change to turn around the situation when the economy improved.
“The good thing was that Government took the issue seriously and worked hard to change the mindsets of those who had lost interest,” he said.
[Mr Peter Mutekede (seated) shows off some of the furniture he manufactures in Glen View.]
Mr Peter Mutekede (seated) shows off some of the furniture he manufactures in Glen View.
“We even worked together with the Ministry of Local Government, Urban and Rural Development to create a model that would enable houses to be built for the people through co-operatives.”
There are at least three million beneficiaries of co-operatives, with a further one million people downstream benefiting.
“The idea behind being in a co-operative is to share ideas,” said Mr Duru.
“We do projects for the development of the communities and the nation at large. This has helped to reduce political tension among community members and address gender imbalances.”
According to the International Co-operative Alliance, a co-operative is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through jointly owned and democratically controlled enterprises. Since the most popular co-operative sector proved to be that of housing, an apex body called Zimbabwe National Association of Housing Co-operatives (ZINAHCO) was created to affiliate all the housing co-operatives.
ZINAHCO programmes and construction services manager Mr Eddmond Muzuwa said co-operatives affiliated to the body were at an advantage, especially when it came to lobbying for financial resources. “We have 120 co-operatives affiliated to us,” he said.
“We actually urge those not registered with us to come forward because there is easy sourcing of funding, easy co-ordination, easy access to land and we even offer training on governance, technical and environmental issues in relation to housing.”
Harare North Housing Co-operatives Union chairperson Mr Misheck Mangwende said the co-operative, which covers the area from Dzivaresekwa to Hatcliffe, started in 1995 and has well over 15 000 members.
“We have built about 4 500 houses, especially in the Hatcliffe area,” said Mr Mangwende.
“About 3 500 residential stands are being serviced.
“The only problem is that we have to source our own funds to look for developers to service the stands because the city council has since withdrawn that service.”
Mr Mangwende said the co-operatives had a huge impact on social development.
In the savings and credit co-operative sector, the Women Development, Savings and Credit Union co-operative was registered in 1999 and provides financial services to its members, who are all women. The union’s branch manager for Harare, Ms Nyasha Chapinga, said the mandate of the micro-finance business was to alleviate poverty among women with special focus on the economically marginalised. The union has branches in Harare, Bulawayo, Mutoko, Honde Valley, Glendale, Gokwe, Harare, Kadoma and is working on opening another branch in Mutare.
In the transport sector, Rixi Taxis Transport Co-operative was exhibiting at the commemorations. Rixi Taxis is the largest mini-cab co-operative in the country, which started off with just five taxis in the late 1990s but now has more than 50 taxis operating in different cities and towns. A member of the Fishery Co-operative from Kariba, Mr Luke Sango, said ever since he joined the co-operative last year, he can now take care of his family without any problems.
“I once joined a mining co-operative in 2000, but after I lost all my savings to it, I thought I would never join a co-operative again,” he said.
“I only joined last year after I realised the co-operative enterprise had been resuscitated.
“Right now, the economic empowerment from these co-operatives is tremendous.
“These co-operatives are indeed a poverty alleviation tool.”
Since the promulgation of official policies on co-operative development in 1984, there were several changes and new policies that were implemented with a view to revive the sector. In the past, after acquiring land, people were not allowed to develop their residential stands while at the same time occupying them. City councils required that development be done first before moving in, which proved too expensive for the prospective home owners.
But the introduction of the incremental development policy saw people being allowed to develop their residential stands while residing at the place. The theme for this year’s International Day of Co-operatives was “Youths, the Future of Co-operative Enterprise” and it coincided with the United Nations International Year of the Youth. In 2002, the International Labour Organisation adopted a resolution to promote and commemorate the International Day of Co-operatives.
The day is observed in Zimbabwe annually. -The Sunday Mail
Labels: COOPERATIVES, SAP
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Engines behind economic growth
Saturday, 16 July 2011 10:56 Features
By Gwendoline Mugauri
THEY were notorious for mismanagement of funds and leadership squabbles, but co-operatives, which were popularised at independence in 1980, are making a comeback. Perhaps the rot in co-operatives was exposed in 1999 when the then Ministry of National Affairs, Employment Creation and Co-operatives banned at least 62 of them for misappropriation of funds.
The co-operatives had suffered a slump when the Economic Structural Adjustment Programme was introduced in the early 1990s. They could not manage the swift market changes brought by the International Monetary Fund-sponsored programme.
Then came the recession of the last decade that eroded all co-operatives’ savings. Many wrote off the co-operatives because of the numerous problems they faced in terms of being productive. But things are taking a turn for the better as the co-operative enterprise is being revived to take its rightful place in the economy.
The commemoration of the International Day of Co-operatives recently revealed that co-operatives are indeed back with a bang. Vice-President Cde Joyce Mujuru said at the commemoration that co-operatives and other small businesses were now the “real engines of economic growth”.
Cde Mujuru said efforts to resuscitate co-operatives were progressing.
“Most governments create policies that are skewed towards the mainstream economic activities, considered to be the main players in the economy. Yet the real engines for economic growth such as SMEs and co-operatives are sidelined,” she said.
“Co-operatives have emerged as self-help groups, which contribute towards poverty alleviation of its members.”
Cde Mujuru said the youth and the disabled should take part in the development of co-operatives. She said co-operatives were a powerful instrument in the promotion of indigenisation and economic empowerment as members gain ownership of the means of production. The Government promulgated an official policy on co-operative development as early as 1984.
There are now registered co-operatives in a wide range of sectors such as mining, agriculture, manufacturing, housing, fishing, services and credit. For example, Mr Peter Mutekede, excelled in carpentry and dreamt of running a furniture company. His family was very sceptical about the whole idea. Little did they know that 10 years down the line, Mr Mutekede would become one of the best and most popular furniture manufacturers.
Who does not know about Glen View’s flourishing industry in household furniture, steel fabrication, upholstery, sculpturing and even coffin assembling? Mr Mutekede, who is now a successful businessman in his own right, is a proud member of the Glen View Furniture Co-operative and has his own Mutekede Investments company. His case came to the fore at the International Day of Co-operative commemorations.
Yet before the event, many questions were being asked on the state of co-operatives in the country. Are co-operatives still in existence? Are they genuine enterprises or they are just fraudulent little organisations? Do the co-operatives really benefit people? A total of 277 815 co-operatives were represented at the commemorations held in the Harare Gardens.
The president of the Zimbabwe National Co-operatives Federation, Mr Mike Duru, said co-operatives were alive and kicking.
“From 2004 to 2007, the co-operative sector dwindled slowly until a time when some banks closed and most people lost money they had saved,” he said.
“As the sector was eroded, a lot of people were not interested, resulting in many pulling out of co-operatives.”
Mr Duru said there was a lot of lobbying and policy change to turn around the situation when the economy improved.
“The good thing was that Government took the issue seriously and worked hard to change the mindsets of those who had lost interest,” he said.
[Mr Peter Mutekede (seated) shows off some of the furniture he manufactures in Glen View.]
Mr Peter Mutekede (seated) shows off some of the furniture he manufactures in Glen View.
“We even worked together with the Ministry of Local Government, Urban and Rural Development to create a model that would enable houses to be built for the people through co-operatives.”
There are at least three million beneficiaries of co-operatives, with a further one million people downstream benefiting.
“The idea behind being in a co-operative is to share ideas,” said Mr Duru.
“We do projects for the development of the communities and the nation at large. This has helped to reduce political tension among community members and address gender imbalances.”
According to the International Co-operative Alliance, a co-operative is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through jointly owned and democratically controlled enterprises. Since the most popular co-operative sector proved to be that of housing, an apex body called Zimbabwe National Association of Housing Co-operatives (ZINAHCO) was created to affiliate all the housing co-operatives.
ZINAHCO programmes and construction services manager Mr Eddmond Muzuwa said co-operatives affiliated to the body were at an advantage, especially when it came to lobbying for financial resources. “We have 120 co-operatives affiliated to us,” he said.
“We actually urge those not registered with us to come forward because there is easy sourcing of funding, easy co-ordination, easy access to land and we even offer training on governance, technical and environmental issues in relation to housing.”
Harare North Housing Co-operatives Union chairperson Mr Misheck Mangwende said the co-operative, which covers the area from Dzivaresekwa to Hatcliffe, started in 1995 and has well over 15 000 members.
“We have built about 4 500 houses, especially in the Hatcliffe area,” said Mr Mangwende.
“About 3 500 residential stands are being serviced.
“The only problem is that we have to source our own funds to look for developers to service the stands because the city council has since withdrawn that service.”
Mr Mangwende said the co-operatives had a huge impact on social development.
In the savings and credit co-operative sector, the Women Development, Savings and Credit Union co-operative was registered in 1999 and provides financial services to its members, who are all women. The union’s branch manager for Harare, Ms Nyasha Chapinga, said the mandate of the micro-finance business was to alleviate poverty among women with special focus on the economically marginalised. The union has branches in Harare, Bulawayo, Mutoko, Honde Valley, Glendale, Gokwe, Harare, Kadoma and is working on opening another branch in Mutare.
In the transport sector, Rixi Taxis Transport Co-operative was exhibiting at the commemorations. Rixi Taxis is the largest mini-cab co-operative in the country, which started off with just five taxis in the late 1990s but now has more than 50 taxis operating in different cities and towns. A member of the Fishery Co-operative from Kariba, Mr Luke Sango, said ever since he joined the co-operative last year, he can now take care of his family without any problems.
“I once joined a mining co-operative in 2000, but after I lost all my savings to it, I thought I would never join a co-operative again,” he said.
“I only joined last year after I realised the co-operative enterprise had been resuscitated.
“Right now, the economic empowerment from these co-operatives is tremendous.
“These co-operatives are indeed a poverty alleviation tool.”
Since the promulgation of official policies on co-operative development in 1984, there were several changes and new policies that were implemented with a view to revive the sector. In the past, after acquiring land, people were not allowed to develop their residential stands while at the same time occupying them. City councils required that development be done first before moving in, which proved too expensive for the prospective home owners.
But the introduction of the incremental development policy saw people being allowed to develop their residential stands while residing at the place. The theme for this year’s International Day of Co-operatives was “Youths, the Future of Co-operative Enterprise” and it coincided with the United Nations International Year of the Youth. In 2002, the International Labour Organisation adopted a resolution to promote and commemorate the International Day of Co-operatives.
The day is observed in Zimbabwe annually. -The Sunday Mail
Labels: COOPERATIVES, SAP
Read more...
Human-centred economics
By JCTR
Tue 14 June 2011, 04:20 CAT
Does the current understanding of economics benefit in any significant way the majority of citizens of this country?
Do the recent promises and development programmes in the light of elections offer an opportunity to direct economic growth to human development? Good economic models are those that constantly ask whether such policies benefit the people, and more especially, the most vulnerable in society.
The Jesuit Centre for Theological Reflection (JCTR) has insisted that the economy is unhelpful unless it serves the human person, and not the other way around. That we can never say we are developing unless the lives of the poor people are improving.
In the light of elections this year, there are many claims of development by both the ruling party and opposition political parties. The ruling party claims that it is their leader who is bringing about true economic and social development.
The opposition political parties discredit these claims and showcase how they will develop Zambia with the available resources once elected into leadership positions. Whether these claims are true or not, let us concentrate on looking at economic development as only being meaningful when it benefits the poor and the most vulnerable in society.
In the past few years, we have seen the face of Zambia changing. Before 2005, Zambia was heavily indebted, suffered from bad policies of Structural Adjustment Programmes (SAPs) that saw wage freezes, stagnation in the education and health sectors, high inflation rates, and high poverty levels. Now Zambia has a new face – low inflation rates, high Gross Domestic Product, and high foreign investment.
But with this celebrated “economic boom” where people have struggled to move out of extreme poverty, there always seems to be those who take advantage of such progress for themselves. Although many policies and economic models have mushroomed in an attempt to see that the people of Zambia develop and come out of poverty, underdevelopment and poverty continue to be a huge challenge.
The return to multiparty democracy in the 1990s came with the concept of liberalisation of the economy, a concept which was so good on paper that decision makers without much consideration of the people, especially the poor, rushed to accept it. Although most of the policies were aimed at bringing about more economic development, these policies led to much suffering of the people, mostly the poor.
For example, privatisation of state-owned industries and mining companies saw many people without jobs due to downsizing, technological advancements, and the search for more competent people. Privatisation and a stress on private ownership saw people in rural areas loosing markets with a withdrawal of services (such as banks) from rural areas.
The free market system that came with democracy saw important sectors such as health and education also being commercialised. User fees were introduced in hospitals and clinics, tuition fees became the order of the day in schools, and social security schemes were slowly becoming history.
The current view of economics tends to instil a belief in the minds of our policy-makers that once you concentrate on sectors that produce and make profit and produce high GDPs, e.g., mines, agricultural, manufacturing companies and tourism, the country will develop.
Human beings, who ought to be the owners of such economic policies, are only thought of benefitting from a “trickle down” effect. But there cannot be development when people are hungry, sick, uneducated, and lacking basic needs.
With such trends, we have rural areas back-rolling in development and general welfare. Rural poverty is still high at about 78 per cent. Access to markets is still a problem, and we are seeing a trend where investments and the benefits of the “economic boom” are only utilised to improve urban areas and to win popular electoral acceptance.
Infrastructure in rural areas is very poor, and educational standards in rural schools are plummeting (even when more new schools are being built), often with few books and desks, while the number of pupils being enrolled is increasing.
Although it can be argued that this situation is changing with the introduction of free primary education and health services, the unavailability of services such as drugs, education materials, and human resources still remains a problem.
In addition to the challenges of access to markets, health and education, people in rural areas consume far below the recommended calories of food per person per day.
In a world where we crave for policies and theories that will help to expand the economy, large sectors of the population are still marginalised.
Unemployment levels keep rising. There are too many people chasing too few jobs. Even when foreign investment is seen to have given many Zambians jobs, the type of jobs, the remuneration, conditions in which workers work, remain poor.
The precondition for any economic policy or theory should be the question, “how would such a policy or theory benefit the people involved?” The problems that people continue to face especially in accessing basic needs show that our policies and economic theories may not be specifically and directly directed to the wellbeing of Zambians, especially the poor.
Good economics and mature development processes are those that raise the standards and dignity of all the people. In the development process, human dignity and the common good should never be compromised. There is need to stop taking a limited view of economics under current models.
We need to constantly look at the broader view that places human beings at the centre. We should keep an eye on the most vulnerable in our society when making economic policy decisions. Our measure of development should be when we have many more people who were poor coming out of poverty.
Just how do you think that we can direct our economic benefits to improving the lives of poor Zambians?
dliche@jesuits.org.zm
jctr@jesuits.org.zm
www.jctr.org.zm (external link)
Labels: DEMAND SIDE ECONOMICS, JCTR, NEOLIBERALISM, SAP
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(Democracy Now!)
Political Crisis in Greece Amidst Revolt Against Massive Budget Cuts and Tax HikesFrom DM: "Greece was rocked Wednesday by massive street protests and a strike of millions of workers against the government’s austerity plans. In response, embattled Greek Prime Minister George Papandreou announced he will reshuffle his cabinet to try to achieve consensus on how to address the country’s crippling debt crisis. The new austerity package for Greece includes $9.4 billion in tax hikes, doubling past measures agreed to with bailout lenders that have pushed unemployment to a record 16.2 percent and extended a deep recession into its third year. We speak with Hara Kouki, a doctoral student based in Athens who has been writing about the protests, and with Costas Panayotakis, associate professor of sociology at the New York City College of Technology at CUNY. [includes rush transcript]
Labels: IMF, NEOLIBERALISM, POLICE BRUTALITY, SAP, World Bank
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COMMENT - Again, another country that does not have a spending problem, but a revenue collection problem. Reinstate the customs union, and the problem disappears. Why doesn't the IMF insist that revenues are collected, instead of demanding a reduction in spending?
Swaziland must get its house in order, warns World Bank
JINTY JACKSON MBABANE, SWAZILAND - May 22 2011 07:40
Swaziland may be forced to devalue its currency unless the crisis-hit Southern African kingdom can urgently cut government spending, a World Bank economist warned.
"It is getting to the point of reckoning -- when Swaziland will no longer be able to sustain its deficit," visiting World Bank economist Jean van Houtte told Agence France-Presse, ahead of a meeting here on Monday organised by the lender on the crisis.
"We have said if you need a little time to get your house in order you can re-peg at a different level."
Swaziland's currency, the lilangeni, is pegged at one-to-one with the rand.
But pressure to devalue is growing as the country faces a fiscal crisis brought on by a 60% drop last year in revenues from a regional customs union, the government's main source of income.
The country has been paying civil servants by drawing down its foreign reserves, but as the crisis deepens the kingdom's cash is running out.
Finance Minister Majozi Sithole warned on state radio last week that it would be "difficult" for the government to pay May salaries, adding: "I do not even want to mention June" -- a bombshell he later retracted, promising the government would find a way.
According to the International Monetary Fund, Swaziland's central bank had to issue an emergency loan for the government to pay salaries in February.
The IMF says Swaziland has one of the world's highest wage bills --almost half of government spending -- and a deficit that stood at 13% of GDP at the end of March, nearly double that of the previous year.
The global lender on Wednesday gave Swaziland's financial reform programme a harsh review, a major blow to its urgent attempts to secure international loans.
Protests
"A large fiscal adjustment is needed to bring the programme back on track and reduce the fiscal deficit in line with available financing," said mission head Joannes Mongardini in a statement at the end of an IMF visit.
In March, Cabinet members agreed to take a 10% pay cut, but negotiations to get public-sector workers to accept a 4.5% wage cut have failed.
The government's moves to slash its wage bill sparked large protests in April that were forcefully put down by King Mswati III's regime. Police beat, detained and tear-gassed protesters, drawing condemnation from international human rights groups.
A finance ministry source said the government is determined not to devalue the currency and will try to get through the next two months by drawing down reserves.
The country's commercial banks are not buying government bonds, limiting the state's capacity to borrow domestically.
The World Bank has agreed to loan Swaziland $20-million, but the money will only be available in September. Even coupled with a potential $150-million loan from the African Development Bank, van Houtte warned, "they are not close to closing their financial gap".
The government's 2011 budget deficit is expected to hit $565-million.
The government is now in a position where it will have to take "unilateral action" to force through salary cuts, he said.
About 70% of Swazis live on less than a dollar a day and face growing strain from rising food and transport costs.
Van Houtte warned that if the currency peg is scrapped, income distribution could become more unequal, hitting civil servants especially hard.
"You would have an immediate impoverishment of civil servants at the same level of depreciation," he said.
"That is because most goods they buy are imported from South Africa." - AFP
Labels: IMF, NEOLIBERALISM, SAP, SWAZILAND
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