IMF denies hampering progress

The International Monetary Fund (IMF) has hit back at a consortium of NGOs that accused it of sabotaging Zambia's efforts to improve its quality of education. In a strongly worded statement released on Thursday, the Fund refuted claims raised in a report co-authored by the Global Campaign for Education, Oxfam International and Voluntary Service Overseas, which said that current efforts to get more children into schools were being hampered by harsh conditions imposed by the Fund. The IMF's external relations department said although it agreed that improvements in educational standards were essential to poverty reduction, and supported further aid to low-income countries to accelerate progress towards the Millennium Development Goals, the report contained "inaccuracies and misconceptions". The Fund maintained that, contrary to the claims, its policies had not prohibited Zambia from hiring new teachers or other priority workers, such as doctors and nurses, and pointed to strategies jointly devised with the Zambian authorities that will allow some 7,000 new teachers to be employed. The central thrust of the NGO argument was that IMF conditions, which place a ceiling on public sector wages of eight percent of gross domestic product, meant fewer teachers could be employed, thereby jeopardising efforts to improve literacy levels. Some 40 percent of rural women in Zambia are illiterate. The Fund countered that the wage cap was agreed between IMF staff and the government in 2003, following a substantial salary raise and the introduction of a new housing allowance for government workers, and said the increase in spending had been caused by higher wages and benefits, rather than hiring more teachers or other priority employees. According to the Fund, the main concern was that an attempt to meet the increased wage bill through budget cuts elsewhere would have left very little money in state coffers for priority spending to support Zambia's poverty reduction strategy. Financing the wage bill by printing more money would have led to higher inflation, which would have affected economic growth prospects and reduced the real incomes of the poor, the IMF noted. Moreover, "structural factors" also meant that although some 7,000 qualified teachers were available, there were also over 7,000 teachers ready for retirement but unable to do so because the government could not afford to pay their termination benefits. "These teachers have therefore remained on the payroll, receiving their salaries but not working," the Fund explained. It highlighted that the Netherlands had provided a grant of US $10 million this year to cover the unpaid termination benefits of 7,000 teachers, allowing replacements to be hired. Amid the debate local observers have pointed to the impact of the AIDS pandemic on Zambia's education system. Earlier this week the National Union of Teachers noted that 1,250 teachers have so far died of HIV/AIDS related complications this year. "The ongoing debate between the IMF, the government and NGOs fails to recognise the simple fact that HIV has had very negative effect on education in this country. The high death rate of teachers from AIDS should mean that all obstacles should be removed to ensure that more teachers are employed to replace those who are dying," Muweme Muweme of the Jesuit Centre for Theological Reflection told IRIN. He accused the government of "sacrificing" the education of children in a drive to meet IMF conditions. "The impact of the government's policies has both immediate and long-term effects, especially on the poor. How is an illiterate population going to make use of the benefits of debt-relief?" he added. Zambia was re-accepted into the IMF's Poverty Reduction and Growth Facility in June, after the government had instituted a series of austerity measures, bringing the aid-dependent country a step closer to reaching the Highly Indebted Poor Countries (HIPC) Completion Point by the end of this year. HIPC status, once granted, is expected to help it reduce its external debt of around US $6.5 billion to a more sustainable level. For the report prepared by Oxfam, the Global Campaign for Education and Voluntary Service Overseas: www.oxfam.org.uk