Sponsored by an international coalition of civil societies, religious bodies and concerned individuals, the Jubilee 2000 has for the past two years intensified it calls for a cancellation of the tremendous debt owed by poor countries (including Zambia). This debt campaign has began bearing some fruits. Heeding to the pressure, the International Monetary Fund (IMF) and World Bank (WB) announced a joint facility to replace the enhanced structural adjustment facility (ESAF). The new facility is called poverty reduction and growth facility (PRGF). In the following article, Chrispin Mphuka, Co-ordinator of Jubilee 2000 - Zambia analyses this new facility to see if it does offer real solutions for Zambia.

In apparent response to the international Jubilee 2000 debt campaign, the International Monetary Fund (IMF) and World Bank (WB) decided to shift their policy orientation during their annual meeting in Washington last year. The two organisations announced a joint facility to replace the Enhanced Structural Adjustment Facility (ESAF).

The new facility is called Poverty Reduction and Growth Facility (PRGF). Is PRGF really different from ESAF? What are the new features of the new facility? In whose interest has this change been made? What challenges does this shift pose for the Jubilee 2000 campaign, civil society and recipient governments? These are some of the questions that this article seeks to address.

Jubilee 2000-Zambia's observation is that there is actually no major change in the shift by the two financial institutions. The move of renaming ESAF as PRGF is only

an attempt to add poverty reduction onto SAPs without changing the actual policy conditions.

Under ESAF a country was required to implement structural policies, e.g., devaluation of currencies, privatisation of public industries, downsizing of the public sector, removal of subsidies, removal of price controls and so on. Implementation of these policies would in turn determine whether a country could access funding from ESAF.

To say the least, these IMF-imposed policies resulted in stagnated economic growth and worsened poverty levels with increased inequality in income distribution. Was this a mere coincidence or something designed?

I feel it has been rather by design because for more than two decades the IMF and the World Bank have been criticised by different groups of people for the devastating effects of their lending but did not change their conditionalities. How does the new facility then differ from ESAF?

According to the Fund and the Bank, PRGF will try to aim at reducing poverty while still focusing on a sound macroeconomic framework. The two institutions tell us that the Bank will concentrate on poverty reduction while the Fund continues being a watchdog on economic growth through macro economic stabilisation. Poverty reduction strategy papers (PRSP) will replace the unpopular policy framework paper (PFP), which was a basis for ESAF.

Whereas PFP was a confidential affair between government and the IMF, PRSPs will be drafted by national governments in consultation with civil society. So the role of the bank and fund will be "limited" to "approving" already drafted PRSPs with a criteria not well defined. This will be in a bid to create "home ownership" of the overall plan.

At this stage, it is clear that those same institutions

responsible for Africa's suffering are very much in charge of the whole process. This must cast a lot of doubt whether the shift is being done in good faith.

SAP still remains the main condition for accessing finances even under the new facility. These changes are best described by the Ecumenical Coalition for Economic Justice (ECEJ) in their report of 1999 that the IMF and World Bank are using the language of poverty reduction to hold on to their power to dictate neo-liberal policies to nominally sovereign states.

But do these shifts signify a near "development horizon" for Zambia? Are there any solutions being proposed? Zambia by any standard is one of the poorest nations in the world with over 73 percent of the population living in deplorable human conditions, below a basic poverty line. Life expectancy has reduced to less than 40 years.

The current mortality rates are among the highest in the world, even higher than countries like Angola that is at war. A country like Zambia therefore needs a real solution to its economic, social and political problems sooner than later. But what efforts has the government undertaken in trying to address this situation?

The government of Zambia has come up with a Poverty Reduction Action Plan (PRAP). It is government objective to turn this document into the country's

PRSP. But many questions still remain unanswered - who determines civil society's participation?

Is it the Government or International Financial Institutions (IMF and World Bank) who are mainly in charge? How long will the consultative stage between government and civil society be? Has civil society the capacity to engage itself in the PRSP process, which may require technical knowledge?

To begin with government has already a problem in trying to adopt the PRSP process. First, the Ministry of Community Development and Social Welfare is drafting the national Poverty Reduction Action Plan while the PRSP process will be co-ordinated by the Ministry of Finance and Economic Development. The transition period between the two ministries may certainly cause some unnecessary delays.

Secondly, recent anti-church and anti-NGO pronouncements by some senior government officials raise a lot of doubt about government's willingness to meaningfully engage civil society in the PRSP process. However, Jubilee 2000-Zambia was recently encouraged by the participation of the Minister of Finance and Economic Development and his Deputy Minister in our 24 February Conference. (Contact the JCTR offices for copies of the Conference report.)

But the PRSP process poses a challenge even to civil society. Who is civil society anyway? Since the PRSP process seeks to find ways of effectively reducing poverty, I suggest when we talk about civil society we should have in mind those groups of people calling for an end to oppression, whether economically or otherwise.

I simply mean that civil society is not homogenous. Certain groups may have opposing interests that may make it very difficult to work together as a group. We can go round this problem by saying that there should be a coherent social movement to further the cause for the poor. This means government should consult those groups that stand for justice as one group while the other groups can be consulted separately.

An example of conflicting interest between two very close groups in Zambia is that between commercial farmers and subsistence farmers. Commercial farmers keep getting concessions in the national budget while subsistence farmers get none. Certainly it could be problematic to expect these two groups with different interests to negotiate as one group in the process

Meaningful participation of civil society in the PRSP process calls for a well-informed civil group with adequate mechanisms to lobby government on certain pertinent issues. On the contrary the capacity of our social movement to enter meaningfully into the proposed PRSP process is still rather weak.

We need to build that capacity if we care and are determined to use the participation space created to our advantage. It is for this reason that Jubilee 2000-Zambia has lined up activities that will help bridge this gap. But more resources, financial and otherwise, will be required to make this process effective.

Civil society must be involved right from the PRSP formulation stage up to the last stage of the process. In my own understanding, this is what should constitute "meaningful" civil society participation.

In conclusion, it is clear that the Bretten Woods institutions (IMF and WB) have realised that the best way of polishing their image was by way of borrowing some of the language of the Jubilee movement for debt cancellation, reformation of ESAF, and a commitment to poverty reduction. But basically everything does not seem to have moved effectively.

The Jubilee 2000-Zambia movement recognises that PRSP will still be controlled by the IMF and World Bank and so may not achieve its objective just like its predecessor, ESAF. But we are determined to participate in the process, not only to reveal the inadequacies of PRSP and monitor Government's moves but also promote more effective and equitable steps toward a real solution of Zambia's poverty. This will certainly be for the good of the nation and international community.