[stop-imf] Zambia Test Case for G8 Summit - Stephen Lewis

[Robert Weissman]

For immediate release:
Friday, June 11, 2004

Please find attached and below the text of a statement released today by
Stephen Lewis, the UN Secretary-General's Special Envoy for HIV/AIDS in
Africa, entitled: Zambia Test Case for G8 Summit.

The text may be freely circulated, posted, quoted, and reprinted.
Please contact me if you wish to schedule an interview with Mr. Lewis.

Regards,
Christina Magill

TEL: +1-416-657-4458
FAX:+1-416-946-1371
clmagill@shaw.ca

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Statement by Stephen Lewis, UN Special Envoy for HIV/AIDS in Africa:
Zambia Test Case for G8 Summit
For immediate release
Friday, June 11, 2004

"AT THE HEART OF EVERYTHING LIES HIV/AIDS"

The G8 Summit finished yesterday. It finished with a flourish about the HIPC
(Highly Indebted Poor Countries) Initiative on debt reduction. The decision
was to more fully implement HIPC, and to extend it for another two years.
There was much self-congratulation amongst G8 members.

As it happens, the decision can now be put to an immediate test; a test of
integrity, a test of the ringing G8 rhetoric. This very Monday, June 14,
2004, the IMF Board is meeting to consider the case of Zambia. Zambia is in
desperate straits, and it all revolves around the IMF and HIPC.

I shall try to put the situation as simply as possible. But remember:
everything has to be measured against the backdrop of a country where
HIV/AIDS has taken, and continues to take a terrible toll.

In April of this year, the Government of Zambia negotiated its 2004-2007
Poverty Reduction and Growth Facility (PRGF) with the IMF. This was
meant to
be the programme to run the country financially for three years. But it had
a particular premise on which everything was based: if Zambia could meet the
conditions imposed by the IMF, then Zambia would achieve the requirements
for HIPC eligibility by December 31st, 2004, thus reducing foreign debt
service substantially, and freeing up significant resources for the new
budget. Essentially, Zambia had to produce good economic performance for six
months and the IMF would verify that the "HIPC completion point" had been
reached. The entire programme (PRGF) depends on meeting the HIPC targets.

It is impossible to overstate how hard Zambia has been trying to comply with
IMF requirements, including the imposition of a suffocating cap on wages.
The Government truly thought it was meeting those six-month conditions by
the agreed deadline, when the IMF suddenly informed Zambia that it wouldn't
be possible to resolve things by the end of 2004; the evaluation of Zambia's
performance would have to extend into the first quarter of 2005. For the
Government, that would be a disaster. The entire country is wholly fixated
on 2004; for the sake of a month (or two) a kingdom is lost.

As a result, something unprecedented has happened. The Minister of Finance
and National Planning, The Honourable Ng'andu P. Magande, has issued a two
page document outlining the issues, acknowledging the overwhelming crisis
which the Government faces, and appealing to the diplomatic and multilateral
communities to intervene with the IMF to get it to behave in a different
manner on Monday.

The economy of Zambia is in crisis. The Government has frozen wages in the
public sector, and raised taxes. Incomes are so low that people are barely
surviving. The imposed macroeconomic policy means that the Ministry of
Health can hire no more staff, and fully twenty per cent of the municipal
districts have no doctors and no nurses. It is estimated that there is a
shortfall of 10,000 teachers, and there are 9,000 newly-trained teachers who
cannot be hired. Average pupil-
teacher ration is approaching 56:1 . fatally wounding the quality of
education. The damage to the social sectors is staggering.

Why do I choose to issue this statement? Because at the heart of everything
lies HIV/AIDS. The pandemic is methodically and destructively eating
away at
the capacity and infrastructure of Zambian society. It cannot be allowed to
continue. The Government urgently wants to confront the pandemic, but it
cannot do so with its financial policy and planning in a straitjacket. The
Board of the IMF must

come to realize that rigid macroeconomic conditionality is putting
Zambia at
risk. Observers within the country worry about the potential for social
unrest. Even the Minister of Finance signals the Government's acute anxiety
when he says: ". the Government of the Republic of Zambia has asked the
people of Zambia to see the year 2004 as a period of sacrifice so as to
reach the HIP completion point by December 2004. Thus, Government has taken
difficult and unpopular decisions . If the prospect of Zambia .attaining the
HIPC completion point is made impossible at next Monday's IMF Board meeting,
then the credibility of, and public support for, the Government's programme
with the IMF . will be severely eroded".

I have argued before in cases involving the International Monetary Fund, and
I argue again that it has failed to grasp the demonic force of the human and
economic carnage caused by HIV and AIDS. The poorest sectors of society: the
extended families, the women, the children, the orphans . they have all made
incredible sacrifices to keep life going in Zambia in the face of wrenching
austerity. I appeal to the IMF Board to introduce the tiny quotient of
flexibility being requested by the government of Zambia. To do otherwise is
to give continued momentum to the pandemic.

There's a bitter irony here. The former Government of Zambia was a
Government that often flouted every injunction of the international
community. The present Government, and the people of Zambia, are falling
over backwards, in the face of incomparable odds, to comply with the demands
of the international community. I have visited Zambia four times in the last
eighteen months; I've met with many segments of society in various parts of
the country, with my colleagues in the UN family, and with the President and
members of his cabinet. This is a Government doing everything in its power
to restore economic growth and social equity.

For heaven's sake, give Zambia some breathing room. Was the G8 serious in
its avowed embrace of HIPC? We'll know on Monday.

- end -