IRIN Focus on poverty

[This report does not necessarily reflect the views of the United Nations] A decade ago, President Frederick Chiluba won a landslide election victory with a promise to breath fresh life into Zambia, ending the suffocating one-party system of the past and reviving a moribund state-controlled economy. In recognition of the size of the task confronting his new government, he also warned Zambians they would face hard times before things got better. The challenge But with GDP per capita declining on average by 2 percent a year since 1991, malnutrition rates described by UNICEF as "unacceptably high", and a sharp fall in life expectancy from 49 years in 1992 to an estimated 37 years, most Zambians are still waiting to see the promised light at the end of the tunnel. Chistello Zimba, 22, graduated with a college diploma four years-ago but works as a cleaner in the private sector. She counts herself luckier than most as she has a job. "Every now and then a different company is being liquidated," she told IRIN. But her salary barely stretches to the end of the month. Dominick Manda, a driver, also complains about the lack of jobs and the high cost of living. "Many, many people are suffering because everything needs money. Even if you are sick and you go to hospital there are no drugs." He said that some of his relatives were pulling their children out of school because they cannot afford the fees. "Education is a problem because of money. That's why we're poor, because there's no education." Zambians pay the price In breaking from the state-control policies of his predecessor Kenneth Kaunda, Chiluba and his Movement for Multiparty Democracy (MMD) introduced abrupt free market reforms in 1991 that were welcomed by the donors. The impact, however, fell on Zambians as bankrupt parastatals closed, fees were introduced for health and education, and social sector funding dried up in favour of servicing Zambia's US $6.5 billion debt. According to a national survey, between 1996 and 1998, extreme and overall poverty levels increased from 69 percent to almost 73 percent. Zambia relies on donor funding for some 50 percent of GDP. However, a standoff between the donors and the government between 1996 and 1999 over delays in privatising Zambia Consolidated Copper Mines (ZCCM) and a string of governance issues has seen a decline in balance of payment support and a freeze for the whole of 1998. GDP growth for 1999 is estimated at 1 percent at best, a UNICEF report said. The government has tried to create a framework for macro-economic stability and growth. But government revenue continues to fall, currently at below 20 percent of GDP. In response it has cut actual spending on social services to around 6 percent of the overall budget, according to UNDP. Out of 79 countries for which data is available between 1975 and 1997, Zambia is the only country where the value of UNDP's Human Development Index is lower than it was in 1975. HIV/AIDS represents the country's biggest challenge, with more than 30,000 children born HIV positive each year. It is forecast that Zambia will have the second largest proportion of HIV/AIDS orphaned children in the world this year. "Combined with the increasing and deepening poverty and the indefensible external debt burden, this forms a destructive 'tripod of deprivation'," a UNICEF report said. Poverty alleviation "Because there are no resources the government has stopped thinking about the social sector," Oxfam-Zambia director Maheshi Misha told IRIN. "Maybe the government is negligent, but it is also terribly constrained." Between 1993 and 1996, on average 10 percent of GDP was allocated to debt-servicing and less than 2 percent on primary education. According to Oxfam, over 50 percent of total education spending takes the form of out-of-pocket payments by parents which represents a "regressive form of taxation which falls most heavily on the poorest households". As a result, school enrolment is falling, as is the quality of education provided. A major national survey found that after six years of class, 75 percent of children were leaving primary school illiterate. "Poverty reduction is not recognised in what is the most liberal of economies. It is a huge challenge viz a viz the government and its priorities, and the donors for that matter," a senior UNDP official told IRIN. "UNDP's position is what is needed is not new conditionalities but a need for comprehensive policies on what constitutes good governance." The planned sale of ZCCM, which is estimated to cost the government US $1 million per day to keep afloat, could clear the way for Zambia's qualification for Highly Indebted Poor Country (HIPC) debt relief this year. The International Monetary Fund and World Bank are already studying Zambia's debt sustainability, news reports said on Monday. Some European governments have also indicated they are prepared to write off bilateral debt, and Zambia's case for debt cancellation would be discussed at this year's Paris Club meeting.