The opposition FDD says the country’s solutions to its economic challenges is not the IMF as the conditions will affect the country’s social and economic priorities.
FDD Spokesperson Antonio Mwanza says conditions imposed by the IMF can effectively control a nation’s crucial social and economic priorities.
Below is a statement as issued by Mr Mwanza.
The IMF is expected in the country this week to discuss the possibility and conditions of giving Zambia a financial package owing to the economic conundrum we are in.
In order to receive a loan from IMF, a country must agree to the IMF’s CONDITIONALITIES and make general commitments to cooperate with IMF in setting policies to the formulation of specific, quantifiable plans for financial policies.
The conditionalities imposed by IMF include a drastic shift in the fundamental domestic and external policies that, depending on the intentions of IMF, can effectively control a state’s crucial social and economic priorities.
The standard IMF conditionalities include:
1. Deregulating of the economy
2.Privatising of state-owned enterprises
3.Removal of subsidies, including on essentials such as food, fuel, agro inputs, electricity etcetera
4. Imposing of consumption taxes
5. Cutting down of Government spending on key sectors of the economy such as health, agriculture, education, energy, etcetera.
6. Raising of interest rates as well as
7. Reducing price subsidies on essentials such as food
Statistics have shown that the majority of the countries, Zambia inclusive, that have accepted IMF prescriptions and/or advice have experienced profound economic disasters which include low or even declining growth; higher foreign debt and general economic stagnation that perpetuates systemic poverty. The IMF’s own studies have revealed a devastating assessment of the social and economic consequences of its guidance of poor nations.
The emerging IMF data only confirms that IMF’s Structural Adjustment Programs have eroded existing social services and have in fact aggravated the poverty and suffering of hundreds of millions globally.
In summary, the IMF has created an immoral system of modern day colonialism whose goal is to serve the interests of the multinational corporations at the expense of third world countries.
The IMF’s Structural Adjustment Programs ensure debt repayments (to the multinationals) by forcing poor countries to cut down spending on key sectors of the economy such as health, education and so forth which are actually key to sustainable development. Further IMF usually demand the devaluation of the local currency to make exports cheaper for the multinationals at the expense of poor countries.
They demand privatisation of state assets which the multinationals buy at cheaper price and demoralise the local workforce by demanding wage freezes to the detriment of the recipient countries.
Crucially, the IMF often forces recipient countries to eliminate assistance to domestic industries while providing benefits to multinational corporations making it impossible for the local industries especially the small and medium scale businesses to favourably compete on the market.
Government should carefully scrutinise and interrogate the prescriptions IMF will demand and make a conscious decision whether to accept or deny the financial package IMF is offering.
Mr. Mwanza, if not “IMF solution”, then what? Unfortunately, criticizing does not solve the problem which has been created over past 5 years. Anybody with functional brain knows that “unprecedented development” has been financed with borrowed money and contrary to the assurances of PF, the debt crisis has become reality.
Can you give answer to simple question? If not IMF, then what?
Default on financial obligations?
Follow Mugabeconomics?
More prayers and more religion?
More of the same?
Young man, if you do not have slightest idea about way out, please do not add insult to injury by stating obvious. Instead, tell us about way forward if you know the answer. Otherwise, join your Madame Boss and sit on the fence.
I think Antonio has got this Fundamentally wrong most problems are created by Governments that take on the IMF not implementing and abiding by operational fiscal discipline often times than not such Governments would rather tighten social spending than say putting a lid on wastage …e.g Chartering Private Jets and Paying USD 500,000 while reducing on Medical supplies in clinics. Its like being sick, you go to the Doctor, besides prescribing drugs he also asks for lifestyle change…you accept the drugs but don’t want to change your lifestyle…As your illness gets worse you easily choose to blame the Doctor for being such a Bad practitioner !! 🙂
First of all, don’t insult the one hero of African independence who has tried not to give in to the IMF/World Bank ownership of his country with ‘Mugabenomics’, of which you clearly know very little. Going against the IMF/WB is the only way not to get trapped into their system.
If the PF had said no to the Eurobonds and collected the Windfall Tax, we would not be in this situation today. (Google: windfall tax lunatics maravi)
Now getting out of this Eurobond ‘debt’ is the problem of this and future governments. Complying with the IMF conditionalities is undermining the economy. And it will lead to social instability and riots.
It has become fashion for opposition parties to attack govt policies without giving their solutions..! Lets give alternative solutions to govt not just yapping..! We have alot of economists in this country including the self proclaimed ‘I will fix it’ but they are just quiet waiting for things to go bad and then say..we warned u…! One does not necessarily have to be president for them to offer solutions..! How I wish I had some knowledge in economics..!
Fortunately, our governance system allows for constructive criticism. Antonio has offered a well thought out view on why as a country we should not depend on borrowing especially from institutions like the IMF. Very few countries would be said to be better off now because they borrowed from the IMF. Greece is one such example of a once prosperous nation, which thought it could come out of its challenges by borrowing. The solution in my view lies in looking inward. It lies in supporting SMEs to develop capacities to produce and especially for the export market. That opportunity is currently being frustrated because of the high cost of borrowing
FDD Zambia Definitely needs an IMF programme for Now The growth that our forecasts and Plans that 5 to 10 yrs. ago that were based on Chinas double digit growth as implied in the business for our mineral resources may not replicate in the near short term 10 yrs. or less The lack of Growth in the 2 digits by china will impliedly mean that growth prospects and Investments for Developing and emerging markets will be blink and you may need some stop gap before Chinas robust potential comes on board Corporate debt has risen and could be a signal for some financial crisis that will follow in China and simply banking on Chinese commodity driven economy as a…
source of money to GROW the Zambian economy may not be wise Its clear that Reserves in china have dwindled 500 Billions USD and any one should read and see what the policies and trades with china will be now and then
FDD Zambia at this time will need some cash cover but with lesser restrictions to ensure that even then the economy still grows healthily
The whole of the African race is under economic occupation. You cannot achieve a true
political independence without at the same time achieving economic independence.
The so-called political independence we think we have now is merely an illusion. As a result, African countries are unproductive and can only plot their way to a decline. Indeed ‘No group can survive when all their needs are met by others’.
IMF cannot impose itself on Zambia. It has got to be invited to come and help. Unfortunately the govt making the request is now illegal and illegitimate. As such IMF cannot be seen to be financing electoral theft and fraud Human Rights violations. Until Lungu allows a proper , fair and open Petetion Hearing, IMF and Bilateral Donor Aid Agencies will withhold financial assistance to the illegal and illegitimate Lungu govt. The only solution for Lungu is to return to legitimacy and legality.
YOU MUST BE ASHAMED TO BRING IN MR I WIll FIX it. How do you want to be given a dining formulae if you did not give him s chance to play? uiu must be insane. Football is played in the field. If you chose to BENCH PLAYERS then they criticise you for not scoring??? how to you say they should advise players in how to score? Football and scoring is done in the field. its either you are in or not. For now UPND & FDD will keep their ideas period. they are on the bench!
This is what you PF cardes understand but pretend to ignore. You all know that the mess Zambia is in because of massive corruption. Do you care where Lungu got money to buy 30 Toyota Land Cruisers (US$5 Million) that were given to fake individuals in Solwezi so that they could campaign for him but failed and still have got the vehilces. Unprecented development in the pockets of PF cardes. Now its time to dance to the tune of stealing. This time no amount of rigging will save anyone in 2021 because the economy will talk for itself. No buying of Judges will save anyone.
Lets face it, Zambians we are now corrupt and see nothing wrong in it. When we were told that a road is 5 times more then what it was during RB times we kept silent whilst the PF cardes continued stealing through road…
The legitimate and Global recognised Presidency of His excellency elect Edgar changwa Lungu will work with IMF and ensure Zambia emerges better off to meet its present day challenges
Mr Zulu, its nature of IMF to be invited and cannot come unless the Country Inviting has prepared itself and is ready to Fit Inn the conditions In this case the Minister and his people have to get the micro-macro prudential achievements within the framework of IMF
Then to the pastor in the world of scarcity and constraints Two Countries if pull together resources in the case IMF countries, translating into SDRs is better than One but individual efforts differentiates…
member countries in translating the IMF funding resources Its the same thinking amongst countries participating in the BRICS bank and other But IMF is bigger and might exercise flexibility given its inclination and support for Zambia
Its correct to observe thou that individual efforts complements and results in some growth healthy from IMF funds
How easy it is the tell the truth when one is not in power. The PF would have said the same thing when the MMD was there. (See their support for the Windfall Tax when not in power. Google: windfall tax lunatics maravi) However, as soon as they become the recipients. I hope the FDD has the integrity to rule what they believe.
I like the current Finance Minister. Let’s see what happens and support him in standing up against the IMF/WB.
Lastly, what the article could also mention, is that the result of all this IMF austerity, is very well known – the people rebel against this level of extraction of their wealth. These riots were called the IMF Riots by former World Bank VP Joe Stiglitz.
Also, when it is already known what the IMF conditionalities are and what they do, it is no longer enough for anyone to blame ‘corruption’. Of course corruption is necessary to take on this kind of debt. However, this corruption just happens to occur in every country that the IMF/WB gets it’s hands on. There ‘just happen’ to be neoliberal politicians in power who will throw their country in to debt if they can take a bribe. When this happens in Zambia, South Africa, Ireland, Iceland, Greece, Turkey, etc. you cannot say it is a Zambian problem. It is an IMF/WB problem, and a problem of the world conquering family that controls that institution, as well as the biggest banks, mining, agricultural and manufacturing companies, on their way to a global monopoly.
Now what are we going…
Now what are we doing to break out of the IMF/WB system? That is what I want to hear from any politician, in or out of power.
If you want to know more, google: the globalizer who came in from the cold