The new face of IMF structural adjustment (Tanzania)
June 2000
The following is an excerpt from a paper prepared by Marjorie Mbilinyi of the University of Dar es Salaam (Tanzania) for one of the panels held as part of the U.N.'s recent review of its 1995 Beijing Women's Summit.
This is the most comprehensive analysis we've seen of how the Poverty Reduction & Growth Facility — the new name adopted (in 1999) by the IMF for its notorious Enhanced Structural Adjustment Facility (ESAF) as it supposedly sought to include more citizen input — is actually being implemented. The answer, in Tanzania, seems to be that no citizen input is being allowed on macroeconomic conditions — rather the IMF is soliciting advice on how to measure poverty, and help with conducting local workshops, and then saying that its overall plan has benefitted from the "participation" of Tanzanian civil society organizations. As Ms. Mbilinyi warns, the great danger here is that the IMF and World Bank will, through the slow and paltry debt "relief" provided by the HIPC Initiative, which is linked to the PRGF, bind the country to 20 additional years of structural adjustment AND allow the IMF to claim that civil society organizations participated in and approved of the plan.
Needless to say, this is a grave problem. The 50 Years Is Enough Network is dedicated to monitoring the implementation of the PRGF and the composition of its major documents, the Poverty Reduction Strategy Papers (PRSPs). We will be recommending appropriate actions as the opportunities present themselves (as we did, in a rather hurried fashion, with the decision on Ecuador's structural adjustment loan — which was, incidentally, approved by the World Bank board today).
This is a longer document than we usually post on this list, but its importance warrants attention from all those with an interest in putting a halt to the devastation of structural adjustment.
- Soren Ambrose
50 Years Is Enough Network
Washington, DC USA
Excerpts from "Budgets, Debt Relief & Globalisation" by Marjorie Mbilinyi - Rural Food Security Policy & Development Group - Institute of Development Studies - University of Dar es Salaam (also affiliated with Tanzania Gender Networking Project)
What is abundantly clear is that HIPC provides a means of furthering the external governance of African countries by IFIs. The linkage between HIPC and structural adjustment and liberalisation measures, namely PRGF (the new name for ESAF), turns upside down the demands by progressive civil society for an alternative development strategy. In return for little, if any, additional debt relief, countries are going to be locked into 20 more years of structural adjustment and economic reform. A major change is that civil society organisations will be willing participants in the process, including some which have opposed the globalisation process up until now.
The meaning of the linkage between macroeconomic reform and HIPC is illustrated by the Tanzanian government's final Interim-PRSP paper, which was recently released to the donors [but not yet civil society] (The Guardian May 24, 2000). The government PRSP says that annual inflation will be reduced to 5% by the end of 2000, and economic growth will have reached at least 6% by 2002. Foreign investors will be allowed to participate in the national stock market by 2002, two public utilities will have been privatised by the end of 2000. The petroleum and energy sectors will be restructured, and customs tariffs will be harmonised with Kenya and Uganda, as moves towards the East African Community.
All of these moves are matters of contention in Tanzania. The loss of national control over key public utilities, and the economy in general, is linked to the loss of national autonomy. Inflation rates may have gone down according to macro statistics, but this is attributed more to the withdrawal of national currency than to increased economic growth. Liberalisation within the East African Community is being blocked by national companies and foreign subsidiaries alike, who argue that they will not be able to compete with Kenyan-based companies.
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Participation of Civil Society and the Institutionalisation of Global Governance
According to the Draft Interim PRSP (January 2000) of government (URT 2000a:5-7), all the key elements of the preparation and consultation process are controlled by government machinery. A Committee of Ministers and the Governor of the Bank of Tanzania oversee the whole process, beginning in mid-October 1999. This is supported by a Technical Committee representing relevant ministries, chaired by a Deputy Permanent Secretary of the Ministry of Finance, which works closely with the macroeconomic subcommittee of Tanzania Assistance Strategy (TAS). The Technical committee is supposed to coordinate consultations with stakeholders such as the donor community, NGOs, business community, and academics.
TAS is an effort by the government, with strong UNDP support, to create a 'homegrown' policy framework for policy formulation, coordination and monitoring which would guide all donors, as well as the government. It is meant to be an alternative to donor-led planning and investments in separate projects and programmes. Instead, coordinated support would be provided to sectors through the national budget. PRSP has now been incorporated within the TAS institutional structure. There are nine task groups within TAS, divided by sectors such as education, health, agriculture, and so on.
The draft Interim PRSP was prepared in January 2000 without any consultation with civil society organisations; and a draft prospectus outlining strategic directions, objectives and targets and actions was also prepared in early 2000 without consultation.
A meeting of 58 persons representing about 28 civil society organisations, along with a few government and donor representatives, met in January 2000 at the invitation of Oxfam GB Tanzania and the Tanzania Coalition for Debt and Development (TCDD) to discuss civil society responses to HIPC and PRSP. Although a [junior level] official of the Ministry of Finance attended that meeting, the full Interim-PRSP was not shared, only an appendix, the Kiambatanisho. The lack of access to key government documents was identified at the meeting as one of the major barriers to full participation in policy formulation, and also an indicator of government resistance to the participation process (TCDD/PRSP 2000).
This meeting set up five working groups, which worked together to raise issues and influence the process of debt relief, of PRSP, and development from the point of view of civil society organisations. They carried out a thorough critique of the Kiambatanisho document, and presented recommendations for inclusion in the government Interim-PRSP. A TCDD/PRSP Steering Committee was created, by combining the leaders of the PRSP working groups with the existing TCDD steering committee. A joint civil society report on PRSP was prepared by a drafting committee, consisting of representatives from each working group, and this report was revised by the joint Steering Committee and, later, by a second meeting of civil society organisations, which was held in March 2000 (TCDD/PRSP 2000). Some 54 people attended the second workshop, representing 32 NGOs, 7 media outlets, along with international and bilateral agencies and government ministries. This time, the Deputy Permanent Secretary in the Ministry of Finance attended in person. He presented government reflections on PRSP, which were partly in response to our draft report.
While endorsing the positive contribution of the civil society report, he sought to downplay the significance of the entire PRSP process. He, like so many others in government, felt that the process was donor-driven, and distracted attention away from the existing National Poverty Eradication Strategy. Concern was expressed about the possible delay in receipt of debt relief funds, if the poverty reduction indicators were set too high. These are markers of achievement in reducing poverty, which must be reached within the next 18 months, ie between the decision point and the completion point. [The civil society report had noted that superficial indicators had been adopted for education and health, which represented no additional investment and implementation of activity, or a reduced level.]
The meeting took issue with the Deputy Permanent Secretary, arguing that 'we' took PRSP very seriously: we demanded more participation of civil society organisations and of communities, especially people living in poverty, in the entire policy formulation process - not just of PRSP, but overall. Moreover, emphasis was placed on the need for government to show political will in reducing poverty, by establishing 'real' poverty reduction indicators, and implementing the relevant activities.
The report also called for more representation of civil society organisations in TAS task groups and technical committee, so as to have a more active role in the formulation of PRSP and TAS policies. The Deputy Permanent Secretary agreed verbally to that request, as he had before in separate meetings with coalition leaders.
However, there has been no indication of any change in the Interim-PRSP, to reflect the inputs from the civil society report. Moreover, the government has not invited further representation of civil society organisations in the TAS task groups. Instead, it has proceeded with its earlier plan to hold six zonal workshops for consultation with the public and the 'poor' on PRSP. Leaders of the coalition were blocked at Ministerial level from taking a leadership role in preparation and implementation of the zonal workshops [but not by the Finance Ministry] - the government reportedly had no time for 'briefcase' NGOs, and would organise the workshops itself.
The government plans a national consultative workshop later, involving civil society, along with other stakeholders, to discuss the final PRSP. And that is the full extent of 'participation' - a series of 'consultative' workshops. This is the workshopping approach to participation.
One of the major limitations of the PRSP process which the TCDD/PRSP coalition noted was the lack of understanding among government officials as to what participation really meant; and more, a resistance to open up to wider consultation among others. This has been confirmed by unwillingness to share relevant documents with the coalition; and the approach taken concerning organisation of the zonal workshops. Government departments are oriented towards donor agencies, not towards their own citizens. In other words, they hold themselves accountable to the donors, not citizens, and not civil society organisations.
Another major limitation has been the short time frame imposed on government and civil society by the World Bank and the IMF. The amount of time provided for 'consultation' would make it very difficult to carry out honest participatory decision-making, with all the best will in the world. This is typical of the entire global state apparatus, and has been noted for most multilateral and bilateral projects and programmes. A results-oriented approach remains dominant, rather than a process-oriented approach, which requires a longer time frame, and much more resources to reach the grassroots level.
It was made clear by World Bank and government officials from the start that civil society participation was restricted to the technical level; big questions pertaining to macroeconomic reform processes were not under debate. Rather, ideas were welcomed about what kind of indicators would help measure poverty reduction, i.e. the monitoring of PRSP. Some official actors involved had hoped for more civil society participation in the implementation of the consultation process i.e. to help run the zonal workshops. In this way, participation was restricted to the process level, not substance.
A gender perspective is lacking in all the key documents. Needless to say, some mention is made of concerns about increasing access for women, especially to education, but there is no call for gender equity at all levels, or for transformation of patriarchal gender relations. The resistance against a review of macroeconomic reforms means a refusal to take on board feminist concerns about alternative development visions and priorities.
At this preliminary stage, certain lessons can be drawn for civil society organisations, such as those outlined in the civil society report (TCDD/PRSP). Civil society organisations need to be more proactive in challenging the globalisation process; demanding greater transparency and accountability from government and donor institutions alike; and demanding more democratic processes of decision-making within donor agencies as well as government. The relatively low level of self-organising among people living in poverty, especially women, but including men and youth, was a major shortcoming. Not a single organisation was involved that was led by and composed by poor people, or even by workers or small farmers. This reflects the tremendous void in self-organisation at the local and national level, as well as the fairly recent step towards advocacy and activism among national non-governmental organisations. Activist organisations can help facilitate self-organising by the poor, without taking over the process.
The coalition has also recognised the need for capacity building in economic literacy at all levels. Participation and representation in policy formulation can only be meaningful if the actors involved are fully informed about current debates in development issues, and the arguments for and against liberal macroeconomic reforms.
Finally, a human rights approach needs to be adopted, which recognises the right of civil society organisations, and all citizens, to participate in policy analysis and review, on their own terms. In a democracy, there should be no reason to be afraid of organising on their own behalf, or critiquing the government and/or global agencies. On the other hand, this also is a challenge to government, to open up more to public debate and dissent.
I think another limitation of the PRSP process, from a critical third world feminist perspective, was that it was bound to the PRSP documentation itself. We need to challenge the entire global institutional apparatus which upholds corporate rule in the North as well as in the South. A growing number of ideas are now circulating, which need serious study and support. They include:
- Tobin Tax on foreign exchange transactions i.e. financial speculation
- Global Central Bank
- International Insolvency Court, to operate the same as corporate and community law in the United States with respect to bankruptcy
- Restrictions on, if not abolition of, offshore banking
- Quasi public international investment fund, like a mutual fund, which operates without conditionalities
- New international currency system that assures stable relationships among national currencies, thus reducing the compulsion to export so as to 'earn' US dollars, Great Britain Pounds or other foreign exchange
- Democratic governing authority for global finance.
These focus on the instititutional and financial level. In addition, serious work is needed, urgently, to develop alternative development visions and strategies, along the lines begun by DAWN (Sen and Grown 1987), feminist economists (Elson 1994, Kerr 1999) and grassroots organisations. The Declaration for Economic Justice and Women's Empowerment prepared by the Women's International Coalition for Economic Justice (WICEJ) is an exciting development along these lines, linking feminists North and South. A growing number of government officials recognise the neo-colonial nature of macroeconomic reforms, and are disenchanted with their work. They ask us, 'what is the alternative to liberal reform?' We need to have a coherent reply.
The PRSP process has taught me that participation in policy formulation processes, and the whole idea of gender or poverty mainstreaming, needs to be seriously reconsidered. What are we participating in? an anti-people anti-poor state? i.e. what kind of institutional mechanisms are we dealing with? Is this a process to realise our vision or somebody else's? How prepared are we to engage in and win policy debates? How grounded are we in a popular movement involving a broad cross-section of the population? How much space is there, really, to change policy and practice, and where is it located? How do we use it most effectively? How do we sustain autonomy and a critical edge, once we succeed in getting 'space at the table' of local, national and global governance?
I think a lot more energy is needed to organise at the local and national level around local and global issues; while linking to global actions in Seattle and Washington, London and Montreal. Feminist activists need to examine the relationship between gender or women issues they work on, and globalisation. Corporate-led globalisation is a gender issue, and needs to be challenged.
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