afrol News - June 11, 2004

Following serious attempts to pay its debts, Zambia will test the recent pledge by the Group of Eight (G-8) rich countries to help poorer nations when it seeks flexibility from the International Monetary Fund (IMF) next week, the UN Special Envoy spotlighting HIV/AIDS in Africa said today.

The IMF had extended the gruelling austerity programme it imposed on Zambia to the first quarter of next year instead of ending it in December, even though Zambia's economic crisis was having a grave impact on the spread of HIV/AIDS in the country, Stephen Lewis said in a statement.

- I appeal to the IMF Board to introduce the tiny quotient of flexibility being requested by the government of Zambia, he said, warning that, "to do otherwise is to give continued momentum to the pandemic," the UN reports today.

Mr Lewis noted that members of the G-8 had yesterday pledged to implement more fully the Highly Indebted Poor Countries (HIPC) Initiative on debt reduction and extend it for another two years. The IMF Board is dominated by the G-8: Canada, France, Germany, Italy, Japan, the Russian Federation, the United Kingdom and the United States.

- There was much self-congratulation amongst G-8 members, Mr Lewis observed. "As it happens, the decision can now be put to an immediate test; a test of integrity, a test of the ringing G-8 rhetoric," he added.

Looking towards Monday's IMF meeting, he said, "Zambia is in desperate straits, and it all revolves around the IMF and HIPC." The IMF had failed to grasp the human and economic carnage caused by HIV/AIDS, he said.

- 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, stated Mr Lewis.

Zambian incomes have dropped so low that people are barely surviving, he said, noting that the imposed macroeconomic policy had forced the Zambian Ministry of Health to stop hiring staff, though fully 20 percent of the municipal districts have no doctors or nurses.

The average pupil-teacher ratio was approaching 56:1, fatally undermining the quality of the countryÆs education, Mr. Lewis added.

After decades of IMF supervised economic reforms headed by previous non-transparent governments, Zambia's economic situation is worse than ever. The IMF has however urged Zambian authorities to cut spending even more to receive international funds.

Last year, the Fund froze lending to Zambia after a higher budgetary deficit than anticipated. Despite two years of wage freezes, spending still is higher than IMF recommendations, only leaving Zambian authorities the option of cutting on social expenses. These cuts recently caused a wave of strikes in the country.

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