Zambia feels chill of the free market

JUSTIN BANDA, 14, spends his days hawking fruit around Lusaka. He is one of thousands of people in the Zambian capital who buy and sell on the black market in an effort to make ends meet.

Justin says he wants to return to school but he cannot. He came to Lusaka from his provincial home to visit relatives, but 'my uncle lost his job as a technician and now there is no money to send me back'.

The rapid growth of street markets has given Lusaka an increasingly chaotic air.

President Frederick Chiluba has defended the vendors in their running dispute with the Lusaka city council over attempts to bring order to the chaos, and has called them 'members of the office of the president'.

The free-market economic programme of Mr Chiluba's Movement for Multi-party Democracy (MMD), backed by the International Monetary Fund (IMF) and dollars 1bn from Western donors, has forced thousands of people out of work and millions of others to enlist all their resources, sometimes even their children, to earn enough kwacha to pay food bills.

In a country in which doctors earn the equivalent of just pounds 60 a month, everyone, it seems, has become involved in 'the office of the president'.

The appearance of new Mercedes and BMWs on the streets of Lusaka points to a widening gap between rich and poor. New banks give the city a false air of prosperity.

When Mr Chiluba scored an overwhelming election victory three years ago over Kenneth Kaunda, who led Zambia to independence from Britain and ran a one-party state for a quarter of a century, the nation celebrated Africa's first fully democratic transfer of power.

Zambia was billed as Africa's success story, a bold attempt to use democracy and capitalism to emerge from the swamp of economic collapse and dictatorial rule gripping most of the continent.

Three years on, the results are mixed. The cry of 'The hour has come' that accompanied Mr Chiluba on his rise to power has changed into a new saying on the lips of many Zambians: 'The hour has gone.'

Mr Kaunda, who lost power after the voters decided they had enough of his autocratic 'socialist humanism', is back on the stump, holding well-

attended rallies in preparation for a political comeback. 'There is a deep sense of disillusionment,' said Elias Chipimo, an Oxford-trained lawyer. 'When the MMD came to power there were such high expectations, but they have been dampened by the lack of accountability and poor delivery of social services.'

While IMF officials and Western diplomats praise the Chiluba administration for applying the tough economic medicine necessary to rebuild the country, plans to privatise loss-making state-owned companies and reform the civil service have moved slowly.

The economy is expected to remain stagnant this year, with continuing declines in manufacturing and agricultural output.

Many Zambians believe that the 'structural adjustment' medicine is killing the patient. With the HIV virus infecting more than 30 per cent of the country's 8 million people, according to a recent report prepared for the International Labour Organisation, fears are growing that Aids will wipe out much of the country's human management and administrative capacity. The government remains dogged by charges of insensitivity to people's suffering. A dozen ministers have left office after allegations of corruption or drug-running.

'There is a lack of vision,' said Mr Chipimo. 'We have a vacuum of leadership. It was easy to change the players, but it has proved far more difficult to change the nation's culture,'

After prices and interest rates exploded last year, the government instituted a 'cash budget' system which allows the state to spend only the revenue in hand, and launched treasury bills to soak up excess kwacha. As a result, inflation has fallen to below 30 per cent a year and interest rates have fallen.

Yet privatisation has been slow, especially of the Zambian Consolidated Copper Mines, the huge corporation that earns more than dollars 800m in foreign exchange but continues to run at a loss and has dollars 900m debts.

Nowhere is economic distress more strongly felt than in agriculture, which was hammered by a convergence of drought, soaring interest rates and the collapse of the marketing system after the government stopped purchasing maize and left it to the private sector.

'Farmers lost confidence in the market because there is no structure any more,' said George Gray, executive director of the Zambian National Farmers Union. The donors compounded the problem by offering food aid.

'Gifts like that we need like a hole in the head,' he said. 'Please don't give us food - give us the money to help us develop marketing and production, and to govern ourselves.'

(Photograph omitted)