ESAP IN ZIMBABWE PDF
there was a high level of unemployment in Zimbabwe before ESAP, but the. Government's and the yazik.info pdf. ZIMBABWE. ECONOMIC STRUCTURAL ADJUSTMENT PROGRAMME. Project Performance Evaluation Report (PPER). OPERATIONS. Publisher: University of Zimbabwe Publications Download full-text PDF Economic Structural Adjustment Policies (ESAP) are economic.
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ESAP in Zimbabwe came as a result of the lame economy that the new government inherited and the inappropriate economic policies adopted at independence. Zimbabwe Ministry of Finance, Economic Planning and Development (ZMFEP) ( ) reports that ESAP was implemented by the government of Zimbabwe with . The literature review established that to date ESAP has had limited .. Zimbabwe's Economic Structural Adjustment Programme (ESAP) launched in was.
These have proved to be disastrous and harmful causing socio economic effects to the government and the mass population.
Soon after independence Zimbabwe hosted the Zimbabwe Conference on Reconstruction and Development ZIMCORD in March , the objectives of the conference was to promote higher growth and to reduce poverty and unemployment by reducing fiscal and parastatal deficits and instituting prudent monetary policy liberalizing trade policies and the foreign exchange system.
By Zimbabwe was undergoing what essentially amounted to a counter revolution as all the impressive gains made in the first decade of independence in education and health were eroded by ESAP. Leon states that during ESAP, government resources had decreased so that real expenditure on health declined because of a combination of rising costs, inflation, declining value of the Zimbabwean dollar, emerging diseases such as TB and AIDS.
In education, the picture emerging over the years of ESAP was equally disturbing. The induced cost recovery measures hurt the poor as the combination of cuts in expenditure on education, the removal of government education subsidies and the Page 3 of 12 introduction of school fees led not only to a deterioration in educational standard but also to a situation were poor parents could no longer afford to send their children to school.
According to Makoni poorer communities and families end up receiving an inferior education, while some children eventually drop out of school due to inability of parents to pay user fees. The impact of cost recovery measures in education was almost immediate as parents simply withdrew children from school or postponed sending them to school.
Leon points that ESAP was ruining the countries education system, the Confederation of Zimbabwe Industries CZI commented that this would raise the drop rate and lower the quality of the future labour force. To make matters worse cost recovery measures reinforced gender inequalities and disparities in education which the Zimbabwean government had been trying to end since It was noted by the end of a greater proportion of girls than boys were dropping out of secondary schools because families rural or urban were not able to afford school fees.
The cost recovery measures clearly disadvantaged girls, thus as school fees rose, the gender bias also escalated. The participation rate of girls declined more from when ESAP was introduced. According to Makoni the total percentage decrease of girls' enrolments between and was found to be three times more than that of boys.
Hence, if nothing is done to cushion such negative effects, the participation of girls will continue to be severely affected. As a result of ESAP, girls were reportedly dropping out of secondary school in Zimbabwe at As in health, a steady brain drain in the s as teachers fed up with rising prices and deteriorating living and working conditions either moved into other occupations or emigrated to South Africa and Botswana, in search for greener pastures.
This adversely affected the quality of education. The removal of subsidies and cost recovery in health resulted in people dying of curable diseases in their homes and women giving birth at homes or in scotch carts on their way to health centres. Participation in prenatal services declined, maternal death and mortality rates of babies Born Before Arrivals BBAs have increased. Dhliwayo noted that, user fees in health services were introduced. In , the government began to systematically enforce the system of user fees for health services.
This decrease implied diminished spending on drugs, extension and preventative health services, specialist facilities and treatment and other components of quality health care delivery.
In doctors and nurses began referring to "ESAP deaths," described as deaths caused by the inability of patients to pay for the minimal length of time in the hospital, or for prescription medicine. The Minister of Health, Dr, Timothy Stamps has acknowledged that only one in ten Zimbabweans can afford to pay for their own health care.
The combination of devaluation and inflation which ate into real incomes and diminishing job satisfaction as fewer patients presented themselves for treatment and drugs were increasingly in short supply led to a brain drain which saw doctors, nurses among other professionals joining the steady outward migration to neighbouring countries which offered better employment prospects.
The Zimbabwean Ministry of Health noted in , that the country had a total of 1 doctors giving a ratio of patients to doctors of 7 but because almost a third of the doctors on the register had joined the brain drain, the effective ratio is closer to 11 among the worst in the world. By the late s unemployment was growing rapidly and firms were finding it increasingly difficult to restructure, so the leading private sector associations and technocrats in government believed that reform was essential if growth was to be sustained and accelerated.
This suggests that restoring the old controls would not be enough to overcome the current breakdown.
To substantiate this claim we must first summarise the key features of the state-led policy regime. In Zimbabwe acquired a new black and rhetorically socialist government that was immediately dependent on a white capitalist class that had previously blocked the emergence of a black entrepreneurial class and denied civic and economic rights to black peasants and workers.
Not wishing to repeat the failures of Tanzania and Mozambique, and wanting to entrench control over the black majority, the new regime allowed politically marginal large-scale white farming, industry and mining to continue their economic dominance. However, it also used state power to improve services, decrease inequality, and ensure that existing firms accept their nationalist priorities by reinvesting their profits in the local economy. This strategy was implemented by maintaining the controls that the Smith regime had used to promote import-substituting industrialisation and overcome sanctions during UDI.
The controls guaranteed commercial farmers cheap credit and cost-plus prices, protected domestic industry from foreign competition, kept interest rates and the costs of imported inputs low, and allowed wages to grow more slowly than inflation.
The new regime also introduced redistributive policies to reduce inequalities, including land redistribution in the early s, and big investments in health and education for the poor. In fact per-capita growth was low but positive over the decade, despite two droughts. However, the tension between the actions of an interventionist regime that distrusted capitalists, no matter whether white, black or foreign, and the needs of existing and, more especially, potential new entrants into the market, was very strong.
The result was policies that sustained existing firms, but seriously limited their incentives to invest and innovate. ESAP was designed to address the resulting structural crisis of the late s, so we can only evaluate its rationality by looking closely at the problems that it was designed to overcome. First, hostility to foreign capital led to restrictions on investment and the right of existing foreign firms to remit profits that virtually eliminated new foreign investment, and new inflows from existing firms.
This intensified the foreign exchange shortage, making it nearly impossible for firms to renew their often obsolete capital equipment and limited employment creation. Second, existing enterprises, in-cluded monopolistic marketing boards and the state-owned steel industry, received subsidised prices and credit.
This allowed them to survive, without needing to address inefficiencies, but also subjected them to cumbersome bureaucratic controls and increased the fiscal deficit.
More important, the subsidies all went to existing firms and this and the licensing system excluded newcomers. Third, civil service employment, and spending on social services, drought relief, subsidies and parastatal losses increased rapidly. This led to a high tax regime as well as a serious budget deficit that was about ten per cent of GDP over the decade.
Fourth, the state set minimum wages and demanded ministerial permission to retrench even a single worker.
‘ESAP was never ideal for Zim’
While actual wage costs rose faster than the minimum, which did not discourage employment, the employment regulations probably reduced formal sector employment, increased the use of casual staff and limited capability building. These controls and allocations supported existing firms producing for the domestic market, and favoured workers with formal sector jobs.
However it discouraged new investment, exports and especially new job creation. As a result less than a third of the new job seekers found jobs over the decade. The ESAP programme that began in was expected to do this.
It was supported by most of the business sector, technocrats in the ministry of finance and the IFIs, and introduced before the economic problems had reached crisis proportions. Hence the prognosis should have been good. Unfortunately the results were much less than satisfactory. Growth was poor, employment contracted, many industrial firms, notably in textiles and footwear closed, and conditions in the communal areas deteriorated as did social services for the poor. The resulting increases in inequality, exclusion and disaffection in urban and rural areas intensified opposition to Zanu-PF and probably led to the disastrous populist measures that were adopted after Thus, no one believes that ESAP achieved its stated objectives.
However, while the experiment did not produce the right results, we cannot necessarily infer the policies themselves were responsible for the failures. Policy failures can be induced by three distinct factors — exogenous forces that throw the programme off course, a failure to implement the policies as planned, and basic flaws in the policies themselves.
Examining each of these possibilities allows us to come up with a nuanced interpretation of what actually happened in the early s.
ESAP was introduced under ex-tremely unfavourable circumstances that would also have reduced investment, employment and welfare under the old regime.
Disastrous droughts in and again in had effects very similar to those experienced during the less serious droughts in the s. This led to high tariffs on exports, and the arrival of cheap subsidised South African goods just as Zimbabwe reduced its own tariffs. This contributed significantly to the de-industrialisation that occurred at the time. It would not cut military spending, or inefficiencies and over-manning in the civil service and parastatals which required huge ongoing subsidies.
Cuts that were made were concentrated on the social services, which increased inequality and marginalisation. The resulting public borrowing requirement led to sharp increases in interest rates. Thus liberalisation opened the local market to competition from imported finished goods which therefore impose massive strain on local companies.
More so, with reference to exports, local companies found it very difficult to increase their exports to international markets especially those companies that were previously not involved in exports, Mlambo Because of liberalisation, by Zimbabwean textile manufacturing companies had fallen from to Mlambo This was attributed to the closure of Cone Textiles with a workforce of 6 workers, citing rapid increase in cotton lint prices as a result of removal of government subsidies for lint in December Mlambo Thus the company could not compete with foreign companies for example from South Africa whose textile goods exporters were still enjoying government subsidy unlike their counterparts in Zimbabwe, Mlambo Whenever the local companies collapsed their share of the local market was quickly taken over by the multinational companies which flooded the domestic market with their products.
However it can be noted that liberalisation provided a relief for 5 shortages of some consumer goods. However as revealed by Tekere cross border trading included merchandise that crossed the border without being officially recorded while under-invoicing and under declarations were rife, thus undermining revenue for the government and promotion of smuggling. Some traders also used unofficial routes leading to their numbers not captured in the national statistics.
The liberalisation of exchange controls also perpetrated informal cross border trade. On the social front cross border trade as a result of liberalisation of trade brought some effects on family setup. Because of the economic down turn inflation and other determinants there was pressure to earn extra money and this was especially felt by women who are responsible for family essentials, Riphenburg, Thus women took up new roles such as cross border trading especially urban women who felt the heinous impact of ESAP.
A study carried out by Mupedziswa and Gumbo revealed that out of 17 women traders in the sample, eight were married and had children. The married women had numerous worries than their counterparts who are non-cross border traders and sleep at their respective homes while they spend more time away from their families.
Child abuse is rampant. Children can develop delinquent tendencies. Even if you leave them with another adult husband or relatives it is not the same. Husbands usually come back home at the night when the children have already gone to bed. They can be very promiscuous in our absence and they also have some worries about us. Family disintegrations were imminent as some families opted to send their children to rural areas another move that hinders the development of children.
Mupedziswa and Gumbo mentions that among the 17 interviewed there were fears of separation among them, however the traders could not stop their activities as a result of the hardships faced. Although Mupedziswa and Gumbo asserts that during the early phase of ESAP cross border trade was a brisk business for the women, they were however vulnerable to robbers especially in South Africa.
Socially ESAP brought about discrimination against women despite the background of women empowerment. This is revealed by the stringent measures at the borders especially in , were 6 discriminating against single mothers was rife. However because of the hardships back home the women were left with no option but to be in conflict with law through bribing Customs Excise officials, hiding goods on their persons and entering other countries illegally.
In doing so they risked their goods being confiscated and or pay a fine thus reducing their profits. Mupedziswa and Gumbo noted that one cross border trader had to stop her trading after her goods were impounded by customs officials at the Zambian border and could not raise the required funds.
All these came as a result of the impact of ESAP at home. Their one size fits all approach did not produce the intended results as the needs and priorities of developing countries were unique.
This can be noted in Zimbabwe were their advice led to catastrophic food shortages in Mlambo indicates that in the World Bank and the IMF insisted that Zimbabwe sell its maize, a buffer stock which has been maintained since independence.
The country, since independence, has been producing enough grain for its citizens and other countries in the Southern African Development Community SADC and at the same time maintain surplus stock for its citizens in times of need.
Mlambo further postulates that in the s the farm war between the USA and European community led to food dumping in Zimbabwe, and this led to declining maize prices in the country and thus led to the Grain Marketing Board GMB incurring huge financial deficit.
The World Bank and IMF decided that the deficit was a result of the country carrying large uneconomic stocks of maize. They therefore advised the country to sell its maize reserves at a loss arguing that it would be more economical for the country to download maize as and when it is required.
This demonstrates the heinous conditions of the Structural Adjustment Programme recommended by the Breton Woods Institutions whose compliance triggers the release of funds to developing nations who are in dire need of funds to finance development in their respective nations. Considering local input would also enable the participation of implementing developing nations and assist in crafting dependable programme for their development not further exposing them to harm.
This case really demonstrates how USA and the Western Europe endeavour to impose neo—colonialism among the newly liberated countries. In conclusion it can be noted that although the government of Zimbabwe implemented ESAP with the objective to radically structure the economy, this was however not realised as the programme was marred by more negatives than the anticipated positive impact.
On the positives it enabled the citizen to be more creative as they seek ways to adapt to the harsh economic 7 environment, higher producer prices, increased competition leading to provision of quality services, and reduced shortages.
The programme resulted in the massive suffering of the citizens due to loss of employment, high cost of living versus low income, increased poverty, corruption, inflation, competition of indigenous companies with well established foreign companies, disintegration of families, discrimination against women, denationalisation of the indigenous economy, high cost of agricultural inputs due to removal of government subsidy and impact on education. It can also be noted that some of the effects of ESAP are still being felt even today, 18 years after the lapse of the programme.
Harare: CSO.Liberal trade theory would also have justified blocking subsidized imports from South Africa while the new trade agreement was being negotiated. Only few people benefited from ESAP in a shortly but at the end suffered long consequences.
While actual wage costs rose faster than the minimum, which did not discourage employment, the employment regulations probably reduced formal sector employment, increased the use of casual staff and limited capability building. Dhliwayo noted that, user fees in health services were introduced.
In the event, there was a lack of political transformation to accompany the economic reforms of the s.
Origins of the Zimbabwe crisis
Their one size fits all approach did not produce the intended results as the needs and priorities of developing countries were unique. In: Masiiwa, M. According to Sounders about 22, public service employees have been retrenched, alongside large cutbacks in real recurrent expenditure on services.
According to Makoni the total percentage decrease of girls' enrolments between and was found to be three times more than that of boys. A historical review of both macroeconomic and shelter industry management policies experienced in Zimbabwe prior to ESAP are examined.
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