Budgets, Debt Relief
and Globalisation
[1]
by Marjorie Mbilinyi
[2]
(Orginally published
as Gera Discussion Paper 1, TWN, Accra, Ghana)
On
April 10th, 2000, the President of Tanzania announced that Tanzania
had been accepted into the Heavily Indebted Poor Country initiative (HIPC) debt
relief programme (Mkapa 2000). This was
proclaimed a major victory by the government, with emphasis on the promised
amount of US$ 2 billion as debt relief. However, the timeframe involved –
twenty years – was kept in small print, and the conditionalities were glossed
over with such finesse that the media, and many activists, were not aware of
their implications. The paramount condition has been ‘macro-economic
stabililisation’, i.e. the continued implementation of structural adjustment
(SAP), liberalisation and privatisation policies in spite of growing public
dissatisfaction with their outcomes. This bundle of neo-liberal economic
reforms has been a fundamental element in the globalisation project of big
business, and has led to the growing power of transnational corporations in all
spheres of life, economic, political and cultural.
The
main focus of this report is on the political dimensions of globalisation,
especially the politics involved in the construction of global state
institutions led by the World Bank and IMF; which include struggles to
incorporate civil society organisations into that process. Global state actions
are responses to the real resistances and struggles against globalisation which
are taking place within Africa and other continents in the South, and the
North. The resistance against corporate-led globalisation has been led in
Africa by women and gender activists, a dynamic force which challenges the
economic reform process associated with globalisation, and calls for an
alternative development strategy. How and under what conditions can women’s/gender
movements and pro-poor movements influence the state and policy agendas, to
paraphrase Waylen (1997:92)? What are the limits to the changes which they can
promote, and how can they be overcome?
Of particular concern in this study
is HIPC’s contribution to institution-building
at global and national level. New mechanisms and modes of operation are
being set up so as to strengthen linkages between the World Bank and IMF in the
day to day planning and administration of their respective and joint programmes.
Jointly, they are asserting ever more power over micro-policy as well as
macro-policy at national level. At the same time, the Bank has taken the lead
in seeking to incorporate selected civil society organisations (CSOs) into the
planning, monitoring and implementation of development projects and programmes
at country level. HIPC represents the latest in a series of initiatives by the
Bank in this direction.
A variety of feminist principles
have been incorporated into the HIPC process, for example, including concepts
of gender equity, the need for transparency, and ‘empowerment’, in this case of
the poor as well as women. Two of the main conditions of enhanced Heavily
Indebted Poor Countries initiative (HIPC) are a focus on poverty reduction and
the participation of civil society organisations, which correspond to major
demands of the global feminist movement. What is the likelihood that these
positive elements will ‘really’ be implemented? To what extent will they be
overshadowed by the ‘ultimate’ condition, the perpetuation of structural
adjustment (SAP), liberalisation and privatisation policies?
The
second and third sections of this paper provide a brief analysis of
globalisation in general, and the way it is experienced in southern Africa. The
general principles of HIPC are presented in the fourth section. Feminist
responses to globalisation are discussed in the fifth section, with an analysis
of the Gender Budget Initiative in Tanzania. This provides an idea of the kind
of contestation, resistances and opposition that donors, governments and
transnational corporations have had to face. Global capital’s response is
illustrated by HIPC. The politics of its implementation thus far in Tanzania
are explored in the sixth section. In the concluding section, I pose issues or
challenges to our efforts to promote gender transformation and economic justice
at local, national and global level.
Some
of the key concepts concerning gender analysis are presented in the remainder
of this first section, along with particular debates about how to understand
gender in the policy making process.
Gender
analysis has emerged as part of an embryonic but steadily growing women’s
movement in southern Africa, which is linked to the global movement (see Kerr
1998). Gender analysis has been closely linked to activism within civil society
organisations. This has given it a sharp edge with which to explore basic
causes of specific problems such as sexual harassment in education and employment,
wife beating, the feminisation of poverty, or persistent gender inequalities at
all levels of society. Critical of policies associated with national
governments and international development agencies, critical third world
feminists endeavour to link the macro to the micro level, and to engage with
the policy formulation process itself.[3]
Moreover, they are constantly challenged to reflect upon their own
class/gender/race position in society, which pushes many to ensure that their
policy perspective reflects the interests of people living in poverty.
On
the other hand, gender analysis has also been ‘mainstreamed’ by many donor
agencies into programmes and projects, and adopted by sectoral ministries in
most SADC countries. A critical analysis is needed of the impact this has had –
or may have – on the oppositional element within gender activism, which is
beyond the scope of this paper.[4]
Earlier critique of Women in Development (WID) approaches remains relevant to a
substantial portion of mainstreamed gender analysis, however. Grounds for
saying so include the common assertion that there is no perceivable difference
between approaches guided by ‘gender’ or ‘women’, ‘gender and development’ or
‘women in development’.[5]
Women
in Development (hereafter WID) analysis and action emerged in Africa in the
1970s and 1980s as efforts to highlight the contribution of women to
development, and the way that they were systematically overlooked in
development policies and programmes. Special programmes were designed to
benefit women, with an emphasis on training and credit. WID focal points were
established in most African governments, with the mandate to monitor the extent
to which government policy took women into consideration, along with research,
documentation and advocacy.
In
Tanzania, the Women and Development Policy of 1992 called for action to ensure
that women had the right to own and inherit resources and implements of
production and the income emanating from their work; that contributions of
women and men to development be disaggregated; that barriers against women’s
full access to education and training be removed; that cultural norms, values
and practices which subordinate women be removed; that a culture that defends
social justice be promoted, along with the talents and strength of women; that
women’s issues be integrated into all sectoral plans; that women’s issues be
mainstreamed in all development plans (see TGNP 1999b:10-11). The Ministry of
Community Development, Women’s Affairs and Children (MCDWAC) was made
responsible for the advancement of women and the promotion of gender equality.
Critics pointed out that the WID
approach tended to isolate women from the rest of the community or society, in
terms of space as well as time. It focused on provision of practical needs such
as training, credit or food relief. Important as these may be in the short-run,
they did not address the fundamental causes of women’s oppressed and
marginalised status, which centred around relations of power and ownership/control
of basic resources at all level of society (TGNP 1993). Those aspects of the policy which challenged
property and power relations directly at household, community and/or national
level were not implemented.
Gender and Development (GAD)
programmes, in contrast, focused – or were intended to focus – on change of
gender relations, by means of historical analysis and transformative action.
Gender relations were understood to be social constructs, not biological
givens, which changed over time and in different locations (of geography,
social class, ethnicity, etc.). They were reconstructed on a daily basis as a
result of the actions and ideas of individuals and groups, and the way in which
society was governed and ruled at all levels. Gender could therefore be changed
as a result of specific actions by, for example, a group of committed activist
civil society organisations; hence, the assertion that gender is, or can be, a
transformative analysis and practice (Mbilinyi 1998b).
Gender
relations were understood to interact with, as well as partially define, other
key social relations such as class, ethnicity and north-south relations. Women
differed among themselves because of class/race/national relations, for
example, as did men. Moreover, people in different classes experienced gender
differently. This made it difficult to generalise about the needs of all women
at the national or regional level, and even within a given community. Moreover,
the needs of men were also taken into account. Priority has generally been
given to the perspectives of women and men who were poor, marginalised,
disempowered.
The
macro-meso-micro framework of gender analysis is increasingly being used in
southern African countries in efforts to democratise decision-making concerning
economic and social policy (Elson et al 1996, SEAGA 1997). The framework can be used to discuss:
·
the structure of an
economy
·
the pattern of decision
making and the way an economy responds to policy changes
·
the distortions and
biases which hamper effective development
·
the opportunities for
development transformation.
The economy and society as a
whole are split, conceptually, into three dimensions:
·
Macro - a
set of financial aggregates
·
Meso - a
set of mediating institutions
·
Micro - a
set of economic agents producing and consuming, or social/cultural actors .
The macro aggregates summarise the total outputs of firms
and incomes of households. The meso
level institutions provide an enabling (or disenabling) environment in which
households and firms operate and interact (see Elson et al 1996)
Participatory development involving
both women and men connotes increased participation in making decisions at each
of the three levels, macro, meso and micro. What kinds of decisions are we
talking about? At the macro level, they include how to allocate public revenue
with respect to different sectors eg agriculture, industry, social services,
military or debt repayment? In Tanzania, for example, agriculture policy in the
1970s was based on active state intervention to support smallscale producers by
means of subsidies, pricing policies and other measures. Following SAP and
liberalisation which began in the mid-1980s, there has been a withdrawal of
state support for agriculture in general, and smallscale producers in
particular, with devastating consequences (see Mbilinyi 1997, TGNP 1999b).
Decisions at the meso level are made
by sectoral ministries, in interaction with civil society organisations such as
business associations, trade unions and NGOs. How services ought to be
delivered, to whom, and who should bear the cost will be determined by institutional
systems. Gender analysis of the Ministry of Agriculture and Cooperatives, for
example, has documented the male bias which pervades nearly all departments,
defined in terms of institutional structure, personnel and content of
programmes (TGNP 1999b). The majority of professional, managerial and
administrative staff are men. Prominence is given to export crops in research
and development, crops monopolised by men at household level. The theoretical
models used to guide rate of return studies pertaining to crops assume a
unitary household with a male household head and ‘dependent’ unpaid wives and
children (Mbilinyi 1997). Failure of crop support programmes has been a frequent
result of such gender ‘blindness’, as a result of the resistance of women and
children/youth to work as unpaid family labour in smallholder farms.
Decisions about how to manage assets
such as land, income or expenditure are also scrutinised at the micro level,
given their impact on the capacity of women to make rational economic choices.
A male bias prevails in terms of access and control over key productive assets
such as land, livestock (especially cattle, sheep and goats), and cash income
and credit which blocks women from making basic improvements in farming and
livestock-keeping. Contrary to many project assumptions, women’s labour is not
elastic because of the triple work load they carry: unpaid domestic work
(cooking, provision of water and fuel, production of food for household
consumption), farm and livestock production for the market, and off-farm
economic activities.
Gender
transformation at household level has been a major focus of many African
interventions in support of women’s empowerment, but they often leave out the
interconnection between male bias at household level and male bias within other
institutions such as the community, the market and the state.[6]
The Gender Budget Initiative has incorporated the linkage between macro, meso
and micro policy, as will be shown below, and provides a contrast in terms of
process and content to the PRSP of Tanzania. Before exploring these examples of
policy intervention, however, it will be important to contextualise our
analysis by examining the globalisation process itself.
Although
it has had a long history, the present phase of globalisation -- a phase marked
by deepening but not widening of capitalist integration -- is quite different
from the earlier expansive phase of capitalism (Hoogvelt 1997). During the
colonial era, third world territories were incorporated into the global
capitalist system as cheap labour on plantations and mines, or as peasant
producers of cheap raw materials. In the 1970s and 1980s, countries of the Far
East and Latin America became major producers of electronic goods, with large
segments of their population employed in free trade zones by transnational
corporations. Certainly, the terms upon which different peoples were
‘integrated’ were not the same, and the very concept of capitalist integration
has been challenged. Nevertheless, a growing segment of the world’s population
was absorbed directly and indirectly into the labour market.
The
situation today is different. Capitalism no longer has the capacity or need to
absorb new populations of people into its orbit, as a result of the
transformation which has occured in production and circulation of capital
associated with information technology. Intra-product trade has replaced
inter-product trade, involving export competition between producers in
different countries in the same product lines (ibid:122). An increasing portion
of global trade also consists of exchanges involving subsidiaries of one firm.
Global market standards have been imposed on business everywhere -- those that
can cope, survive, but a large number collapse or merge.
The
global dimension of economic institutions such as markets is paralleled by the
rapid development of global regulatory institutions such as the International
Finance Institutions (hereafter IFIs), led by the World Bank and International
Monetary Fund (IMF), the World Trade Organisation (WTO) and others. The global
regulatory institutions have imposed a complex set of rules and regulations on
nation states, transnational corporations (TNCs) and other actors. These
institutions support the further expansion of big capital, with particular
attention to the needs and interests of the G-7 countries and their trading
blocks. Macro economic and fiscal policies are promoted which further the
interests of TNCs in their search for new markets and new sources of cheap
labour, and reduced barriers to the free circuit of money-capital and goods.
The
debt crisis has empowered the core countries by providing the rationale and the
means to impose economic and fiscal policies of benefit to themselves, and to
create a global management system which helps to impose global market
discipline around the world (Hoogvelt 1997). In the process, the developmental
state has been dismantled, leaving a weak government apparatus beholden to its
creditors. In contrast, real economic reforms that would lead to real
sustainable development require a strong developmental state, capable of
managing resources at all levels -- as was found in the Far East in the 1980s
and 1990s.
The IFIs have had the power to
impose macroeconomic reforms on African countries, with very little
negotiation. As Rugumamu has noted (1999:5):
What distinguishes the nature and
magnitude of the impact of globalization on respective actors is the unequal
access to dominant organizations, institutions, and dominant transactions in
the emerging global order. At the heart of this uneven access is power, where
power has to be conceptualized as the capacity to transform material circumstances
– whether social, political, or economic – to achieve goals based on the
mobilization of resources, creation of rule systems, and the control of
infrastructures and institutions.
As a
result of globalisation, whole segments of the world’s population in the north,
but especially the south, have become ‘superfluous appendages’.[7]
They reportedly lack the skills necessary to compete in the global market, or
the market discipline to keep up with the fast pace required by the global
market. Core-periphery relationships have become stronger than before, and
increasingly cut across national and geographic boundaries. They include the
growing number of retrenched workers in the north, and the ‘unemployables’ who
have not been employed in the formal sector for generations, including social
welfare mothers.
A politics of exclusion has developed
within the global system to manage “those disadvantaged groups and segments in
all societies that can no longer perform a useful function as either producers
or consumers within the global market” (ibid:147). Global management is “not an
economic problem but a law and order problem” (ibid:148). The politics of
exclusion include anti-immigration laws in Europe and North America and urban
influx controls in Africa. Deepening war and military conflict in Africa are
actively promoted by ‘northern’ states by means of massive arms exports, on the
one hand, and continued donor support for defense activities on the other. HIV/AIDS has provided another, more sombre
way of ‘removing’ a huge proportion of the African population from the face of
the earth. The factors involved are complex: poverty, malnutrition and low
tolerance for virus infection of any kind; culture; the decline of local
economies and the growing dependence on sex work as a major source of cash
income for girls, boys and women; sex tourism; and above all, negligible action
carried out to halt the AIDS crisis by governments and donor agencies.
Official
agencies also support community-based action programmes which help to contain
discontent in developed and developing nations. These programmes contribute to
the maintenance of globalisation by “organising the poor and the marginalised
to care for and contain and control themselves” (ibid:149). They respond to neo-liberal ideals of self-help,
voluntarism, and a reduced dependency/demand on the state. The majority of
women-oriented projects and programmes appear to fall within this category of
social management of exclusion. I believe that the Poverty Reduction Strategy
Paper (PRSP) programme as envisioned by the World Bank and IMF perform the same
function of containing protest and providing short-term ‘relief’ or welfare.
Globalisation
has been strengthened and sustained by economic reform measures, the topic of
the next section.
IMPACT OF ECONOMIC
REFORMS IN SOUTHERN AFRICA
Feminisation
of poverty has ocurred side by side with increased female labour force
participation and increased female access to and control over cash incomes.
Changes in women’s economic activities, however, can only be understood if
situated in the context of the dramatic reduction of male employment and/or
incomes in both urban and rural areas (Mbilinyi 1997, 2000). The majority of
people employed in the formal labour market were men, and hence, in absolute
terms at least, men have been most directly affected by retrenchment policies
in the public sector and downsizing in the private sector (Kaijage 1997). At
the same time, real wages in both the formal and informal sector have declined,
as have real farm incomes. Men have experienced economic impotency as a result,
no longer able to provide for the cash needs of their families as before, and
increasingly dependent on the incomes of their female partners (Mbilinyi 1997,
2000).
Both
women and men increasingly depend on (self)employment in the informal sector,
which has no job protection, worker benefits, maternity leave, minimum wage and
other worker support systems, and has been overlooked thus far by labour union
organisers (Mbilinyi ed 2000). The majority of informal sector workers and
operators earn extremely small incomes, which barely cover production costs, in
activities which have been labelled ‘survival strategies’ by observers of
micro-small enterprises (MSEs) (ibid, see also Kabeer and Whitehead 1999).
Women tend to be channeled into the least remunerative occupations within the
informal sector, same as the formal sector, working in unskilled and
semi-skilled jobs often associated with ‘female’ tasks. Hence, women
predominate in food manufacturing/processing/sale work, whether they are
smallscale operators or wage employees.
The
twin policies of retrenchment (downsizing) and privatisation of public
parastatals have had a devastating impact on women, because of their much
greater dependence on the public sector for regular employment than men (eg in
Tanzania), even though they have been in the minority within formal sector employment
overall. SAP has resulted in the shrinking of less competitive sectors of
manufacturing industry such as tailoring and cloth manufacturing, and food
processing, where, again, women employees were concentrated. However, Export
Promotion Zones (EPZ) in Mauritius, for example, have been labour intensive and
highly exploitative, extracting cheap labour from young women working in
clothing and electronics manufacture (Gunganah et al 1997:23-25).
Although
women have much less access to credit than men, credit opportunities have
become highly restricted for both as a result of fiscal austerity measures.
Most people resort to informal systems of credit, such as usury, which are more
costly.
The
use of unpaid labour of women, children and youth has increased in smallholder
farming and in informal sector activities so as to reduce the production costs
of household economic activitie. Unpaid labour is replacing paid wage labour, a
backward step economically, socially, politically. At the same time, the unpaid
labour of women and children continues to provide the bulk of reproductive
needs within the household and community, in the form of cooking, procurement
of water and fuel, and childcare. As women become more active in
market-oriented non-farm activities, they have been forced to withdraw their
children from school to substitute for their unpaid family work. This has had
an immediate negative impact on children’s access to schooling, and will have
long term social as well as individual costs. Illiteracy rates have increased
for both women and men in Tanzania, for example, another unfortunate legacy of
economic reforms.
Smallholder
farming and livestock-keeping, on which the majority of people rely for their
livelihoods in many southern African countries, have been thrown into crisis as
a result of liberalisation and SAP measures (Bryceson 1999, Malatsi 1995, Mvula
& Kakhongwa 1997, Mbilinyi 1997). Smallholder farmers find it difficult to
survive after the withdrawal of price support systems, soft loans, and subsidies
for farm inputs. The majority of farm households in many areas depend heavily
on off-farm activities to supplement declining farm incomes. Real returns for
export and food crops have declined in many areas, and there are widening
disparities between large and small farmers, and between different agroeconomic
zones. Economic reforms have tended to favour largescale capitalist enterprises
such as plantations and large ranches in Tanzania. They have regained their old
colonial monopoly over support systems such as credit, extension services, and
marketing channels – and a growing number are foreign investors, including
white-owned companies from South Africa (Mbilinyi 1997).
The
contribution of female cash incomes to rural households is substantial, which
has increased women’s bargaining power. Gender relations have begun to change,
as well as become more conflictual. Male responses vary. Some men are
appreciative of women’s contributions, and willing to share in decision-making
about household incomes. Others have withdrawn their support for household
needs, and use their cash incomes for personal consumption -- more booze, more
women, sometimes another wife or mistress.
At
the same time, the expansion of women’s participation in off-farm activities
should not blind us to their exploitative nature: low levels of productivity
and low levels of return. Household and regional food security have been
threatened by these developments, as a growing portion of rural labour and land
is withdrawn from food production into export crop production or into off-farm
activity (Bryceson 1999). In Tanzania, some 6.6 million people were reportedly
facing chronic food insecurity in the 1990s, especially women, children and the
elderly (Mukangara and Koda 1997).
Pressures
to open up land to market forces, as part of liberal reforms, have increased in
countries like Tanzania which had had some form of protection for local
community rights in the past. Dualistic systems of land tenure and land rights
[‘modern’ and ‘customary’] are contradictory, in that they uphold the rights of
indigenous people to their land, but also sustain male dominant systems.
Liberalisation, however, may lead to total dispossession for the entire
community, as well as an erasure of women’s usufruct rights (Mbilinyi ed 2000).
NGOs in Tanzania have formed a coalition, the National Land Forum, to campaign
against top-down processes of decision-making about land, which exclude local
communities and the public at large from participation in the land reform
process. They have argued for a unitary legal system, which protects the rights
of local citizens, especially women and children, over land, and blocks
foreigners from accessing long term rights to land (Mukangara and Koda 1997).
Systematic
forms of discrimination against women have persisted in access to and control
over key resources, especially land, big livestock, farm inputs, farm
equipment, credit and crop incomes, especially the major export crops. The male
bias has acted as a major barrier to the further development of smallholder
agriculture, given that women represent more than half the agriculture labour
force in many countries, but lack any incentive to increase output or improve
their farm practices, and thereby increase farm productivity. A vicious circle
has been created, largely because of male-bias in government and donor policy,
which has led to ever lower levels of crop productivity in many areas, and
higher food insecurity at household, national and regional level.
Women
farmers have not been passive victims, however. Whereas men control almost all
the inherited land in most patrilineal areas of the region, women control a
sizable proportion of rented, purchased or allocated land (Mbilinyi 1997).
Allocated land has usually been provided to women on an annual basis by village
governments or local authorities. They have struggled to retain independent
control over their own labour and those crops which they define as theirs. This
includes active resistance against unpaid labour systems, thus blocking efforts
by cash crop growers to reduce production costs by shifting from wage to unpaid
family labour. Stagnancy or decline in export crop output during the 1990s in
Tanzania can at least partially be attributed to the resistances of women and
youth against patriarchal farming systems based on unpaid family farming
(ibid).
Having
raised the issue of gender discrimination in credit provision, women farmers
have been quick to take advantage of donor-led projects to provide credit
and/or other supports directly to women. Small women’s economic groups (WEGs)
have been formed throughout the region, which have enabled women to access
credit, processing equipment like maize mills, and land, and to set up
autonomous bank accounts in the name of the group. For all the contradictory
nature of these groups, they have contributed to women’s economic empowerment
(TGNP 1993).
Increased
poverty and rural-urban migration have also led to increased sex work among
women and men and children, which is partly associated with the rise of sex
tourism and expatriate workers in most countries. Young girls who migrate to
town in search of a better life are recruited as they get off country trains
and buses to work in brothels or on the streets. Many others turn to sex work
as an escape from low pay, harsh working conditions and sexual harassment
experienced in domestic service, the other main job ‘opportunity’ available for
young rural girls in town.[9]
At
the same time, each country has witnessed the growth of a small but notable and
powerful group of female entrepreneurs. Active in Chambers of Commerce and in
specific women’s business associations, they have expanded their holdings in
such diverse sectors as tourism, transport, restaurants and retail, and mining
in the formal sector. A few women are also found among the larger, more
prosperous operators in the informal or MSE sector, in both urban and rural
areas (Mbilinyi ed 2000). Their wealth depends on exploiting the labour of the
women -- and men -- who work for them, usually as casual labour. This
exemplifies the need for gender analysis to study class differentiation among
women and men, in order to understand the different experiences and responses
of different groups of people to the reform process (Kabeer and Whitehead
1999).
The
effects of SAP reforms have therefore been especially harmful for most women:
longer work days, less access to basic resources like land and labour in some
cases, reduced opportunities in formal wage employment and education, and
increased financial responsibility for families and communities -- too often in
the absence of support from a male partner. The number of female headed
households has increased in many countries, and a growing number of children
are born out of wedlock, and without the traditional community support systems
of the past. Several writings also document the way in which male-dominant
patriarchal systems have become cornerstones of the reforms. Analysis of the
impact of SAP on gender relations, and women and youth in particular, needs to
be strengthened by in-depth examination of the patriarchal construction of
global capitalism (Bakker 1994).
In
the above section, I have discussed the impact of economic and political
reforms on gender relations, with a particular emphasis on growing poverty and
inequality. One response of the World Bank and IMF to the growing crisis in
their client nations is to adopt the discourse of poverty alleviation and
participation and incorporate it into their ongoing economic reform agenda, as
discussed below.
According
to the World Bank (1999a), HIPC “is the first international response to provide
comprehensive debt relief to the world’s poorest, most heavily indebted
countries.” HIPC was launched by the World Bank and IMF in 1996, and revised in
1999 after severe criticism from civil society activists for the delayed
payments, small sum of money provided in relative terms, and the conditions.
The so-called ‘enhanced’ HIPC has not met those criticisms, however. Only
partial debt relief is provided, which is scheduled to take twenty years. HIPC
recipients must implement a series of guideline steps to confirm their
commitment to liberal economic reform, in order to receive debt relief.
Government actions and economic and fiscal performance will be monitored on a
regular basis by ‘the Bank’ [hereafter to refer to World Bank and IMF], and
debt relief can be cut off at any time. Finally, recipient countries must not
falter in making debt payments throughout the 20 year period.
What are the key criteria used to
select HIPC receipient nations? According to IMF (2000a), a country must:
·
Be eligible for
concessional assistance from the IMF and the World Bank
·
Face an unsustainable
debt burden, beyond available debt-relief mechanisms such as Naples terms
(where low-income countries can receive a reduction of eligible external debt
of up to 67 percent in NPV terms)
·
Establish a track
record of reform and sound policies through IMF and World Bank-supported
programs.
In other words, economic
stabilisation and other reform measures must
be implemented throughout the twenty year period to remain eligible. This puts
countries in a contradictory situation, since economic reforms are considered
to be the major cause of increased poverty and social inequality.
A
set of “building blocks” have been worked out for all HIPC contenders to follow
within a given time frame. During the first phase, a country must have adopted
and implemented adjustment and reform programmes supported by the IMF and WB
for a minimum of three years. During this time, the country in question remains
eligible for concessional assistance from all donors, and debt relief from
bilateral creditors, including the Paris Club. At the end of the first phase, a
debt sustainability analysis is carried out to determine the current external
debt situation, using the following criteria (IMF 2000a):
·
A ratio of net present
value (NPV) debt to exports of 150%[10]
·
A ratio of NPV debt to
budget revenue of 250%
·
A ratio of exports to
GDP of 30%
·
A ratio of revenue to
GDP of 15%.
These criteria should have been
reached at the decision point, ie the time at which the Executive Boards of the
IMF and WB formally decide on a country’s eligibility, and ‘the international
community’ i.e. other multilateral and bilateral donor institutions will have
committed sufficient assistance to be paid by the time of the completion point.
The second phase is defined by
further indicators of country compliance with IMF/WB conditions. To cite the
IMF (ibid:p.4, emphasis added): “Once eligible for support under the
Initiative, the country must establish a further track record of good
performance under IMF/World Bank-supported programs. The length of this second
period under the enhanced framework is not time bound, but depends on the
satisfactory implementation of structural
policy reforms agreed at the decision point, the maintenance of
macroeconomic stability and the adoption and implementation of a poverty reduction strategy developed through
a broad-based participatory process.” During this period, WB and IMF are
expected to provide interim relief between the decision and completion points,
along with rescheduling of debts by other creditors.
Remaining assistance will be provided
at the completion point, so as to reduce the country’s debt to a “sustainable level”. What is sustainable
debt? - “levels that will comfortably
enable them to serve their debt through export earnings, aid, and capital
inflows” (ibid). The IMF will provide assistance through grants financed from
the Poverty Reduction and Grant Facility (PRGF)-HIPC Trust to cover costs of
debt service obligations to IMF. The World Bank will provide assistance through
the HIPC Trust Fund, which is administered through IDA, with contributions from
multilateral creditors and bilateral donors. Many bilateral creditors have
reportedly announced that they will provide debt relief over and above HIPC
assistance.
Poverty
Reduction Strategy Paper (PRSP)
Analysis
of the institutional expectations for the PRSP provides us with a window into
the building of the global state system.[11]
Certain aspects stand out:
·
the unusual degree of
coordination between IMF and the World Bank over policy and programmes of
implementation;
·
the emphasis on poverty
reduction;
·
the call for
participation of civil society;
·
the continuation of
‘economic stabilisation’ measures.
The two organisations openly
refer to this as a moment of experimentation, at all levels. A variety of
institutional mechanisms have been adopted, as well as principles to define the
respective roles and responsibilities of each organisation, in relation to each
other, as well as in relation to the receipient HIPC country.
The focus on poverty and civil
society participation can be interpreted in multiple ways; and I would suggest
that each one provides part of the ‘truth’. Firstly, this represents a victory
for activists and critics in civil society, along with African governments, who
have been arguing throughout the 1980s and 1990s that economic reform measures
have led to increased poverty and inequality, and have not led to major
economic growth.
Secondly, there are signs of
unease within the IFIs about the economic formula adopted in the past to
promote growth and development. As cited in GERA 1999b, the President of the
IMF, Michel Camdessus, said in October 1998: “We are speaking not just of
countries in crisis, but of a system in crisis, a system not yet sufficiently
adapted to the opportunities and risks of globalization.” The former Senior
Vice President and Chief Economist of the World Bank, Joseph E Stiglitz (1998),
admitted the failure of the ‘Washington consensus’ and called for a new
paradigm for development, which went beyond economic prescriptions, and emphasised
eradication of poverty, participation and social transformation. He pointed out
that the consensus confused means with ends: ‘it took privatization and trade
liberalization as ends in themselves, rather than as means to more sustainable,
equitable, and democratic growth.”
Thirdly, however, the basic
principles of liberal economic reform continue to be imposed through the PRSP
process – as illustrated by the IMF’s new phraseology for its programme,
Poverty Reduction and Growth Facility (PRGF), with growth standing for the
whole baggage. This suggests that the IFIs have recognised the need to make
some overture to civil society critics, by incorporating poverty issues into
their policies, and by providing more space for some kind of consultation
process. However, the macro economic policy has not changed. Economic growth
will reportedly lead to more poverty and social inequality; HIPC measures will
be used to soften the blow, by strengthening social services and
infrastructure, much as social welfare was used in the developed countries in
times of crisis.
Fourthly, the Bank retains its
leadership position; moreover, it has used this as an opportunity to exert more
control over micro policy making and poverty reduction, as well as the macro
sphere, and to intervene ever more directly into national level governance (Lusaka Declaration in African Agenda 1999: 14-16). Civil
society participation is coopted to legitimise the economic reform process and
globalisation.
The validity of these
interpretations can be explored by a closer look at the institutional building
process within PRSP. The following principles have been adopted to guide the
PRSP framework (IMF 1999: Box 1):
·
Country-driven, with
broad-based participation of civil society in the adoption and monitoring of
the PRS
·
Results-oriented,
showing an understanding of the nature and determinants of poverty, and the
public actions that can help reduce it; with medium and long term goals,
including key outcome and intermediate indicators, so as to ensure that
policies are “well-designed, effectively implemented and carefully monitored”
·
Comprehensive,
recognising that (1) rapid economic growth is necessary for sustained poverty
reduction, through macroeconomic stability, structural reforms and social
stability; (2) poverty is multidimensional; and (3) “A poverty reduction
strategy should integrate institutional, structural and sectoral interventions
into a consistent macroeconomic framework”
·
Partnerships between
the Bank and the Fund; between them and “regional development banks and other
multilaterals, bilateral assistance agencies, NGOs, academia, think tanks, and
private sector organizations”
·
Long-term Perspective,
recognising that poverty reduction requires institutional changes and capacity
building, including efforts to strengthen governance and accountability, and is
therefore a long-term process; and the willingness of partners to make
medium-term commitments.
A series of questions have been
outlined for country authorities involved in designing a PRSP (ibid: Box 3),
which in themselves are concrete and useful. They focus on obstacles to poverty
reduction, objectives and targets, strategy/action plan [including ‘what
institutional changes are needed to implement the strategy?’], monitoring and
evaluation systems [civil society is only mentioned here, not with respect to
earlier, formative aspects], external assistance and the external environment,
and the participatory process. Governments presumedly must answer these
questions, before reaching the completion point. The list of questions
illustrates the degree to which the Bank attempts to insinuate itself into
every day governance at the national level. The output will depend on the
conceptual framework and the positions taken with respect to major economic and
political issues such as management of natural resources, including land.
Within neo-liberal ideology, obstacles to poverty reduction will include the
slow pace of liberalisation and privatisation. Strategies will include enhanced
foreign private investment, and so on.
Section Four of the Operational
Issues paper provides more concrete guidelines for the country process of
developing and implementing Poverty Reduction Strategies. Factors to consider
in designing participatory processes, of particular concern here, include
(ibid: Box 4):
·
The involvement of as
broad a spectrum of government as possible, including parliament where
applicable.
·
The inclusion of as
wide a range of civil society participants and other stakeholders so as to
represent the views of the poor.
·
The desirability of
participation by civil society in the monitoring of the implementation of the
strategy and the achievement of outcome indicators.
·
The possibility of
feedback on the strategy adopted by those consulted.
·
The participation of
key donors and multilateral institutions in the formulation of the strategy.
In a recent progress report on PRSPs
in April of this year, IMF (2000c) noted the delay in completion of full PRSPs,
due partly to the participatory condition. It was decided to accept Interim
PRSPs at the decision point, so as not
to delay the debt relief process. This followed criticism in both civil society
and governmental circles that, in spite of positive intentions, PRSP conditions
pertaining to poverty reduction and participation were being used to slow down
the debt relief process (Abugre 2000, African
Agenda 1999). I-PRSPs have been considered this year for Bolivia,
Mauritania, Uganda, Tanzania, and Mozambique.
The Bank is not serious about its
demand for participation, however, as shown in the document cited (ibid).
Taking a relativistic position, it warns Bank and Fund staff not to “be
prescriptive with respect to participatory processes, which must be developed
by the governments concerned” – a very different perspective from their stand
when it comes to economic stabilisation measures! It notes (p.5, emphasis
added),
Issues also have arisen with
respect to the time needed to develop an appropriate domestic dialogue and
hence the potential trade-off between the quality of that dialogue and the
timely completion of a PRSP document. Concerns have also been expressed about
the risk that participatory processes may
promote divisions rather than consensus at the national level and with respect
to donor coordination and the perceived dominance of the Bank and the Fund in
the process. These issues will need to be carefully handled as the PRSP
program evolves.
Later (p.9), the report notes the need “to put
PRSP-based participatory processes appropriately in the context of national
political processes, and to avoid
undermining political legitimacy or letting powerful interest groups dominate
the process.”
These comments are expressive of
institutional resistance to opening up the decision-making process, within
governments as well as donor agencies themselves. As will be noted below,
government officials in Tanzania have criticised the PRSP because of the delays
caused by the consultation process. The comments are also a recognition of the
potential power of knowledge, which will occur as civil society organisations
get increasing access to information about key policies and programmes, and the
resources mobilised on their behalf. ‘Powerful interest groups’ has been a
euphemism in the past for advocacy groups which oppose the reform process and
globalisation. Or is it the poor that
they have in mind?
The Gender Budget Initiative
exemplifies efforts by civil society organisations to engage more directly in
the policy making process at all levels, as will be discussed below.
·
To strengthen consensus
building and advocacy skills for women and gender oriented groups in order to
campaign for gender equity and equality
·
To broaden women’s
participation in policy-making and management of public resources
·
To analyse the
budgeting process in terms of allocation and utilisation of resources, and the
impact of macroeconomic policies at the sectoral and local level
·
To gauge the impact of
the allocation of resources on women, youth and poor men in particular
·
To lay the foundation
for a campaign for a more people-oriented budget.
Sensitisation workshops
were held with budget officials in all of these ministries to promote gender
analysis and planning, and win their support for GBI. Two parallel research
processes were carried out, one at national level, to study the budget process
at macro and sectoral level (TGNP 1998) and another at district level, in one
rural and one urban district (Mwateba 1998). The research was a critique not
only of the budget-making process, but also of specific policies in question,
such as that of education and health, and more recently, agriculture, water and
industry and trade. Feedback workshops have also been held on a regular basis
with relevant actors in government and civil society, so that action can be
taken immediately on key issues. During 1997 through 1999, advocacy activities
intensified, with the support of a GBI task force consisting of NGO partners
and allies within the central ministries of Finance and Planning, as well as
sectoral ministries.
The process of carrying out the research and
disseminating its findings has been as important as the actual ‘findings’
themselves. Members of Parliament, government officials, members of civil
society organisations and others have participated in GBI workshops, in order
to raise their critical awareness of democratic issues with respect to policy
formulation. Questions have been posed such as who makes the major decisions
concerning allocation of resources at district level? national level? which
stakeholders have access to adequate information so as to be able to monitor
the implementation of planned expenditures?
who benefits from these allocations?
The
research found that SAP had created a gender unfriendly macro-economic
environment, which prioritised efficiency over equity along gender as well as
class, urban-rural and other lines (TGNP 1998, 1999a). The budgeting process
itself was found to be undemocratic and male dominated, excluding most citizens
from decision-making, men as well as women. Austerity measures and budget cuts
reduced the resources available for social services, and led to retrenchment of
many women as well as men in public social services. The context of
globalisation in the post-cold war world had also changed the terms of aid,
from altruistic ‘aid’ programmes to an emphasis on trade and commerce. There
was more open conditionality, with strings attached to private companies coming
from donor countries. Finally, the top-down model of budgeting facilitated
corruption and leakage at all levels, with a decline in transparency and
accountability. International development agencies were as involved as
government agencies and civil society organisations in the plunder of
resources, as can be seen by careful scrutiny of the tender process.
Contradictory
Outcomes
TGNP
has noted the following achievements of the Gender Budget Initiative or GBI
(TGNP 2000ab, see also Mhina 1999). It has raised gender awareness among
government officials in the key ministries of Finance and the President’s
Office where the Planning Commission is situated, as well as in the
participating sectoral ministries, and Members of Parliament. The government
has now adopted its own Gender Budget Initiative with separate donor funding,
and contracted TGNP to work with government officials to mainstream gender into
six sectoral budgets. This owes a great deal to the actions of certain
individuals in key management positions, who became supportive allies. Capacity
in gender analysis skills has been raised among government participants. In
this way, GBI has succeeded to mainstream
gender into government budget-making processes. A major question to ask is
how sustainable such changes are, given their initial dependence on a few key
individuals in positions of power, who are subject to periodic transfers, and
on external funding.
TGNP
has been invited to become part of the annual Public Expenditure Review. The
PER has been an important step towards increasing transparency and
accountability within government, and involves donors, the government, the
private sector and a small number of other civil society organisations, mainly
research/consultancy institutions. In a similar vein, TGNP has been
incorporated into the Tanzania Assistance Strategy (TAS), which seeks to
coordinate government and donor programmes and budgets. TAS has overall
responsibility for the Poverty Reduction Strategy Paper (PRSP), to be discussed
below.
GBI
has contributed to the strengthening of the FemAct coalition, and built
capacity in analytical, advocacy, communications and persuasion skills. Of
special significance is the increased knowledge among participating NGOs about
the structures of power that are reflected in government policy-making,
planning and budget-making. Greater understanding has also been arrived at
about the linkage between macro and sectoral policies, and the negative impact
of macroeconomic reforms on the poor, and women in particular (see TGNP 1998,
1999b).
Underlying
these achievements, however, are real problems about the ultimate outcome and
meaning of GBI. Integrating gender analysis into existing policies and
government structures of power may represent a return to the WID policies of
the past. GBI and the coalition in that way may become part of a legitimising
process which supports the overall globalisation process and its economic
reforms. Gender mainstreaming in Tanzania, as elsewhere, has meant that
feminist goals are adjusted to fit the institutional goals of the specific
organisation, be it a given ministry or policy making process (Kardam 1997).
Controversial issues are avoided, in order to acquire consensus on other
feminist goals.
Analysis
of specific recommendations made in the sectoral reports endorses this view.
None of them prioritises the need for a radical change in macroeconomic policy,
from the present liberalisation and privatisation policy, led by the market,
towards an alternative sustainable development strategy (Mhina 1999, TGNP 1998,
1999b). Indeed, this is not even mentioned as an explicit policy
recommendation. True, the negative impact of macroeconomic reform on gender
issues has been thoroughly documented with respect to each sector. But this did
not lead to the logical conclusion – recognition of the need to challenge the
present corporate-led globalisation process. Nor is there a call for the
democratisation of government along participatory lines, and the transformation
of structures of power. Instead, GBI calls for partnership and consultation
between government, donors and civil society (TGNP 1998, 1999b, 2000ab).
The recommendations
focus on the further integration of gender analysis and planning into ongoing
government processes. In the case of the agriculture report (TGNP 1999b), for
example, the recommendations included a sizable increase to resources available
to the agriculture and livestock sector; increased capacity in gender
disaggregation of data and in gender analysis at all levels; gender
mainstreaming within the government in all sectors; specific targetting of
women farmers and smallholder farmers; increased coordination among different
sectors so as to remove inconsistencies and contradictions in policy
formulation and implementation; improved technology in production and in
reproduction (so as to free female labour); interventions which target gender
divisions of labour which act as constraints on increased efficiency and
productivity; and legal reforms to enhance gender equity in access to and
control over resources. “Finally… the need to mobilise efforts in support of
social justice and gender equity policies, and programs… the call for
strengthening existing partnership between progressive elements in the state,
in development agencies and civil society is being underscored” (ibid:58).
Each
of the recommendations above may well be a vital part of an alternative
development programme, but that alternative has not been spelled out. In
reality, all of these recommendations can and are being incorporated within
existing government and donor systems of governance, with the possible
exception of the final recommendation for mobilisation in support of social
justice and gender equity policies. Given the lack of substantive government
funding for the agriculture and livestock sector, and for its ministry, they
are unlikely to be implemented. Moreover, the ideological discourse of
‘partnership’ ignores the existence of conflicting interests between different
‘stakeholders’, as well as their different levels of power.
And
yet, TGNP and the entire FemAct coalition are notable critics of globalisation,
and have had a major role in raising the level of advocacy and critical analysis
among civil society organisations in Tanzania. How can we explain this outcome?
I think it reflects the lack of an adequate grounding of GBI and the
organisations responsible for GBI, at the grassroots level, in a strong poor
people’s social movement, which would ensure that the key priority of changing
macroeconomic policies and the structures of power in decision-making remains
paramount. Another gap is the lack of a clear conceptual framework within which
to analyse global capitalism and to understand the political and ideological
operations of globalisation.
TGNP
and the coalition partners are aware of these gaps. One of the key priorities
noted for future action at a recent TGNP retreat was the need for economic
literacy, that is, strengthening skills in analysis of macro-micro economic
reforms; the need for a stronger stakeholders analysis; and the need to
strengthen the grassroots base for the FemAct coalition and GBI. This is being
taken up in current plans for a national campaign.
Recognition
of contradictions is a necessary and healthy process in learning from practice,
so long as the lessons are used to improve future steps. The identification of
contradictions is a validation of GBI, in that many positive elements exist,
which contribute to the democratisation process. Citizens do have a right to
participate in decision-making about policies and budgets. The question is,
which policies? Which citizens? Who is excluded? How should they participate?
At what stage in the policy formulation process? And perhaps most challenging,
what difference will it make? What influence do government policies have on
current realities with respect to ownership and control of national resources,
for example? or the operations of large transnational corporations within and
outside of local communities, the nation and the African continent?
The
HIPC debt relief programme in Tanzania provides a major contrast to GBI
processes, given its top-down history, and clarifies the kind of constraints
which civil society activists face in their efforts to influence policy-making
and transform society.
The
government has argued that Tanzania’s acceptance into the HIPC debt relief
programme is a validation of the stand taken vis-à-vis debt payments (Mkapa
2000). In contrast to some who had argued for repudiation of debts, the
government decided to maintain debt service payments, while pursuing
negotiation with IFI and this had paid off!
How
much debt relief has been offered, and what is its significance, given total
debt owed by Tanzanians abroad? The Ministry of Finance circulated a report
widely in the press in order to win public support, which explained that
Tanzania had an external debt of US$ 6.38 billion as of June 1999, broken down
as follows: $ 3.42 billion owed to the IFIs, $ 2.00 billion owed to other
donors (Paris Club), $ 0.86 owed to other countries, and $ 0.10 bill owed to
foreign private corporations. The debt relief being offered to Tanzania through
the HIPC programme totalled US$ 2 billion in NPV terms, or 31% of the current
debt owed. That debt relief would be provided in instalments over a twenty year
period. More than $ 100 million is expected each year.
The
World Bank, namely IDA, promised $ 1.2 billion during the 20 year period,
covering 69.1% of total debt-service obligations to that institution (World
Bank 2000c press release). A much smaller amount of $ 152 million was offered
by IMF over a 10 year period, to cover 58% of debt-service obligations to the
Fund. The Paris Club, in contrast, offered to write off $ 390 million, as
immediate cancellation of 90% of the debt service owed to them up to the
completion point (The Guardian May 3,
2000, citing speech by the Minister of Finance).
The
Finance Ministry report, and the President’s speech, point out that the funds
which would have been used to repay the debt will be allocated to priority
areas for poverty reduction; namely education, health, roads, agriculture and
the judiciary.
The
public response to the news of the HIPC debt relief has been mixed, as can be
seen in newspaper headings during this time (Box 1). The articles discuss a
wide variety of issues: corruption, the need for transparency in allocation and
utilisation of debt relief funds, the lack of mass participation in
decision-making about borrowing, inequality in accessing the resources
represented by the original loans for which debt was incurred, the persistence
of debt so long as the current global economic structure persists, and the
mystification of macroeconomic data, which hides the level of poverty and
misery in the country. These parallel critical views expressed elsewhere in
Africa, and in Latin America and Asia (Abugre 2000, African Agenda 1999, Globalization Challenge Initiative 2000a).
International
debate about HIPC in general has pointed out that the actual amount of
additional relief is small or zero, if the HIPC relief is compared to the
previous amounts provided by the Paris Club. In the case of Mozambique, for
example, it has been calculated that debt payments will be reduced by only 1%,
meaning that no new money can be released for the public sector (Jubilee 2000
Coalition 2000a). Uganda will experience no improvement in the situation before
the completion point, unless additional support is provided by donors for the
Social Fund (Eurodad InfoSheet April 1998). This is because the debt relief
covers minimum debt service cots, which is unlikely to free additional
resources for investment in social services, roads, etc. The much lauded Universal
Primary Education programme has only been possible by massive external
financing, which, in turn, has increased Uganda’s debt.
Box
1 Press Coverage of HIPC &
Economic Growth Reports in Tanzania (2000)
‘Debt relief won’t ease hardship, says Mkapa’ ‘Who eats macro-economic data?’ - The African April 11
- Robert Mihayo, Business Times
April 14 |