Whose country is it anyway?

Talking to partner organisations, politicians and frontline workers in Zambia reveals considerable concern about how the benefits of debt cancellation can be properly felt – and in particular, who is making the relevant decisions.

Zambia has had over 90% of the debt that it owed at the end of 2004 cancelled – a large chunk of that thanks to the debt deal agreed by the G8 in 2005 after enormous campaigner pressure. But that is, of course, not the end of Zambia’s problems. The full impact of the debt cancellation will be felt over time, and meanwhile the International Monetary Fund (IMF) is continuing to attach conditions to new loans that are making it very difficult for the country to deal with its problems.

For instance, Jubilee Zambia and partner organisations are particularly concerned about the tax reforms being pushed by the IMF as a condition of the new loan agreement that is currently being negotiated. These include a proposal for VAT on food, books, mosquito nets and transport. (Bear in mind that foreign companies have a five-year tax holiday on all new investment, including in newly privatised enterprises.) We have met with opposition party MPs who are lobbying hard for parliamentary scrutiny of all loan agreements, to give them a chance to examine and veto such conditions. Jubilee Zambia is calling for a similar law. The IMF, however, is opposed: it says that involving parliament in such discussions will make them ‘drag on’ and will politicise the issues. Because of course in the IMF-world, proposing VAT at 17.5% on food in a country where official statistics report that 60% of people are suffering chronic malnutrition, is not ‘political’, nor a proper subject for the country’s elected representatives to debate.

Meanwhile IMF conditions on the use of government money are limiting the possible benefits of debt relief. For instance, the abolition of healthcare fees is in one way increasing access to doctors and medicines. But limits on wages for healthworkers make it extremely hard to recruit the necessary staff: so clinics are left empty, and the chronically ill are left untreated. Zambia needs to be given more funds, and – crucially – the freedom to invest in essential services.