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Current poverty, structural adjustment, and drought in Zimbabwe
WorldDevelopment,
Vol. 25, No. 7, pp. 1141-l 149, 1997 0 1997 Elsevier Science Ltd All rights reserved. Printed in Great Britain 0305-750x/97 $17.00 + 0.00
Pergamon PII: s0305-750x(97)00019-3
Current Poverty, Structural Adjustment, in Zimbabwe CATHERINE
and Drought
M. MARQUETTE
Christian Michelsen Institute, Bergen, Norway Summary. - Considering the impact of economic structural adjustment programs (ESAP) on the poor is not straightforward because ESAP involves changes affecting future poverty as well as the currently poor. In addition, structural adjustment measures occur alongside other events which may have additive as well as interactive effects with ESAP. In Zimbabwe, for example, the initial years of ESAP implementation overlapped with the onset of a major drought in 1991-92. Understanding changes affecting the poor during the period thus involves considering both these events. This paper considers the effects which ESAP and the drought had on the poor in Zimbabwe during the initial years of the structural adjustment process from 1990-94. Relevant background information on structural adjustment and drought in Zimbabwe are presented. The effects which ESAP and drought had on three areas critical to the currently poor: (a) health services, (b) employment and wages, and (c) food security are then considered. Finally, major government programs specifically targeted at the poor during the period (the Social Development Fund and Poverty Alleviation Action Plan) are discussed. It is concluded that ESAP and drought events adversely affected health, employment and wages, and food security and thus had negative impacts on the poor from 1990-94. Given recurrent drought and the continuing process of adjustment in Zimbabwe, government flexibility in implementing ESAP as well as coordination of
efforts to protect the poor from the negative outcomes of both drought and adjustment is recommended. The government’s recent Poverty Alleviation Action Plan may mark a new phase in which reduction of current poverty, the protection of the currently poor, and future poverty alleviation may go hand in hand. 0 1997 Elsevier Science Ltd Key words -
Southern Africa, Zimbabwe,
poverty, structural
I. INTRODUCTION Over the last several decades, national govemments across the developing world have implemented economic structural adjustment programs (ESAP). In Zimbabwe, as in other countries, this process has involved a series of planned macroeconomic measures, including deregulation of the domestic economy, less restrictive trade policies, and reductions in public spending which are all aimed at promoting sustainable economic growth. The effectiveness of ESAP as a macroeconomic strategy in Zimbabwe and elsewhere in Africa continues to be intensely debated within the development community (see, for example, Riddell, 1992; Mosely and Weeks, 1993; Van Der Hoven et al., 1993; Mosley et al., 1996; Addison, 1996; Davis and Rattso, 1996; Harvey, 1996; Husain and Faruquee, 1996; Lensink, 1996). Meanwhile, nongovernmental organizations (NGOs) in Zimbabwe, as in other countries, have raised concerns over the social costs of adjustment for vulnerable groups, such as the poor (Renfew, 1992; Silveira House, 1993; ZTWU and ZCTU,
adjustment,
drought
1993; Lennock, 1994; Africa Community Publishing and Development Trust, 1995; Gibbon, 1995; OXFAM, 1995). Understanding the impact of Zimbabwe’s (or any country’s) structural adjustment program on the poor, however, is not straightforward. It involves considering two different dimensions of poverty: future poverty and the currently poor (Ribe et al., 1990). A central assumption of the structural adjustment process is that over the long-term it will produce more sustainable growth and thus, reduce future poverty. Meanwhile, removal of food subsidies or wage controls and reduced expenditures on public services under ESAP may have short-term immediate effects on the currently poor who may have to pay more for basic items such as food, have access to fewer public services, and may lose the security of a minimum wage. Alternatively, the short-term effects on the currently poor might also be beneficial since deregulation of domestic markets
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Final revision accepted:
February
8, 1997.
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may lead to more competition and cheaper prices. In any case. considering ESAP in relation to poverty requires distinguishin, 0 between long-term effects on future poverty and short-term effects on the currently poor. A second factor which makes consideration of the impacts of structural adjustment on poverty complex is that in Zimbabwe, as in other countries. structural adjustment measures occur alongside other period events which may have additive as well as interactive effects with ESAP. In Zimbabwe, for example. ESAP implementation in 1990 overlapped with the onset of a major drought in 1991-92. Understanding changes affecting the poor during the initial years of ESAP thus involves considering both structural adjustment and drought-related events. Taking the above factors into account, this paper considers the short-term effects which the coinciding events of ESAP and the drought have had on several areas of critical importance to the CLITYCII~I~ poor in Zimbabwe during 1990-94. Long-term changes affecting future poverty. and economic growth are not the focus of this paper but do continue to be undertaken elsewhere (e.g. Van Der Hoven et al., 1993; Addison. 1996: Davis and Rattso. 1996). Discussion first provides relevant background information on structural adjustment and drought in Zimbabwe. Next, we consider the potential effects which the combined events of ESAP and drought habe had on (a) health, (b) employment and wages. and (c) food security. Finally, government measures specifically targeted at the currently poor during the period (the Social Development Fund and the more recent Poverty Alleviation Action Plan) are considered. Zimbabwe presents a particular challenge in studying changes amon g the poor because of an absence of direct longitudinal data on poverty during the 1980s and early 1990s (Addison, 1996. p.21). The data used here are mainly routine statistics collected by the Zimbabwe Central Statistics Office (CSO) and the most recent rounds of two on-going national household surveys. These include the 19909 I National Income Consumption Expenditure Survey (ICES) (14.000 households) collected by CSO every five years (CSO, 1994) and the biannually collected Sentinel Site Surveillance Surveys (approximately 4,000-5,000 households and 40 representative communities) fielded by Ministry of Public Service, Labor and Social Welfare (MPSLSW) during 1992-94 (MPSLSW, 1992a. b. 1993a. b, 1994).’ Although the ICES allows measurement of the prevalence of poverty (via calculation of a poverty line). the ICES and Sentinel Surveys refer mainly to the general population from which inference about the poor must be made. A major limitation of the following discussion is that it is largely based on inference rather than direct
information on the currently poor. In 1995. a Poverty Assessment Survey (PAS) ( 15,000 households) was carried out by the MPSLSW as past of the 1993 Poverty Alleviation Action Plan (PAAP) (discussed further below). This survey has collected, for the first time, information directly on poor households in the country. Limited initial tabulations from the 1995 National Poverty Assessment Survey (PAS) have recently become available and are considered below as well (MPSLSW. 1995. 1996).’
2. BACKGROUND ON STRUCTURAL ADJUSTMENT AND DROUGHT IN ZIMBABWE In 1980, Rhodesia emerged from a decade of civil war as Zimbabwe. The country’s new leaders were drawn from the Marxist-Leninist resistance which had led the armed struggle for majority rule. The post independence government. not surprisingly. adopted a state-socialist approach which actively sought to reduce poverty. During the 1980‘s. government driven improvements in basic services and support directed toward smallholder agriculture led to dramatic improvements in social welfare indicators. During 1980-90, immunization coverage was expanded to cover most children, infant and under-five mortality fell by half. and primary school enrollment became almost universal (World Bank. 199Sa. Vol. 11. Table 3.1, p.49 and Statistical Annexes Table 1.1. p. 150). In contrast, key macroeconomic indicators remained stagnant throughout much of the 1980s as a result of policy begun before and continued after independence. In the 1970s. international economic sanctions imposed on Rhodesia’s minority-rule government led the country to a policy of import substitution. In addition. in an effort to create a pool of available labor for the country’s industries. Rhodesian law effectively prevented black workers from becoming self-employed or owning land (Van Der Hoven rt al., 1993, p.26 and Von Blankenburg. 1994, ~15.) As a result of these factors, the manufacturing and industrial sectors of Zimbabwe. unlike other African countries, have historically accounted for a larger portion of country’s GDP (357~ in 1992) and more of the formal labor force (16% in 1992) (World Bank, 1995a. Vol. II. p. 1). An additional implication is that production in Zimbabwe has been historically dominated by domestic rather than foreign market concerns. Strict protection and regulation of the domestic market, begun before independence, continued through the 1980s in the form of import and export controls and control of domestic prices. wages. and employment. The continuing controlled nature of Zimbabwe’s economy through the 1980s hampered investment and export-led growth in both manufacturing and
CURRENT
POVERTY.
STRUCTURAL
commercial agriculture (Kadenge et al., 1992; Davis and Rattso, 1996; World Bank, 1995a, Vol. I, pp. 47). Meanwhile, a shift of government emphasis and resources toward smallholder agricultural after independence restricted renewal of industrial infrastructure while retarding further development of commercial agriculture, another important sector (World Bank, 1995aVol. I, pp. 4-7). Public deficits linked to social service expansion and military spending linked to on-going armed conflict with Mozambique had also taken their toll by the late 1980s eating away at about 10% of the GDP annually (Van Der Hoven, 199313.24; World Bank, 1995a, Vol. I, p. 1-13). At that time, the Zimbabwean government began taking measures (more flexible exchange rate policy and relaxing controls on investment and export regulation) aimed at stimulating more rapid economic growth via foreign investment and foreign currency earning (World Bank, 1995a, Vol. I, p.6; Davis and Rattso, 1996, p.396; Addison, 1996, p.17). In 1990, the government subsequently launched a fullyfledged International Monetary Fund (IMF) and World Bank-monitored program of economic structural adjustment (ESAP) which aimed to deregulate the domestic economy (prices, employment, and wages). reduce the public deficit, and continue relaxing restrictions on trade. As in other countries, ESAP in Zimbabwe signaled a formal shift away from state interventionism and regulation toward noninterventionism, privatization, and deregulation (see Table 1). As part of the structural adjustment process, the Zimbabwean government concurrently began a Social Dimensions of Adjustment Program (SDA) (Government of Zimbabwe, 199 1 and Government of Zimbabwe, 1993) aimed at reducing negative impacts on the currently poor (discussed further below). Although the basic elements are similar, the reasons why ESAP is undertaken as well as the course it eventually takes vary by country. Unlike many other nations, structural adjustment in Zimbabwe was not instituted in response to an acute “crisis situation” (Van Der Hoven, 1993, p.3 and
ADJUSTMENT
1143
p.33) but rather as an effort to jump-start economic growth. For Zimbabwe, economic crisis ironically followed rather than preceded ESAP and was triggered by the combined effects of ESAP, which loosened the traditionally controlled Zimbabwean economy, as well as natural disaster. The onset of a severe drought in 1991-92 followed rapidly on the heels of ESAP implementation in 1990. Although Zimbabwe is historically prone to recurrent cycles of drought, the 1991-92 episode was probably the worst in this century (Van Der Hoven, 1993, pp. 1 l12). Drought and ESAP events were thus intertwined from the outset. Discussion below considers in more detail the implications which the combined effects of ESAP and drought had on several areas of critical importance to the currently poor.
3. IMPACT OF ESAP AND DROUGHT ON AREAS IMPORTANT TO THE CURRENTLY POOR Table 2 presents information on the distribution of population and poverty in Zimbabwe in 1990 at the onset of structural adjustment. In the absence of direct longitudinal information on these groups and subgroups of the poor, discussion below considers the impact which concurrent ESAP and drought events had three areas: (a) health services, (b) employment and wages, (c) and food security. Data from the 1990-91 ICES, indicate that the poor in Zimbabwe spend a third to twice as much of their total expenditures on health care and food than the non-poor (Stenflo, 1994, Table 14, p. 33). Because of their particular patterns of consumption and expenditure, the currently poor in Zimbabwe are thus particularly vulnerable to changes affecting health care and food prices (Ribe et al., 1990, p.4). Since they are generally also the group which benefits most from minimum wage controls and may he hardest hit by lay-offs, changes in employment and wages may also have disproportionate effects on the poor and are also considered.
Table 1. Changing policies in Zimbabwe Policies
AND DROUGHT
1980s
1980-90 Structural
Adjustment
1990
Domestic economy
Regulation of marketing of agricultural commodities, price control through food subsidies, nationalization of basic industries, centralized wage controls and regulation of employment
Deregulation labor
Public sector
Government spending to expand public services especially in health and education
Reduction of public spending and deficit. Cost recovery in health and education
Trade
Regulation of foreign investment, exchange, and imports/exports
Deregulation of foreign investment, and imports/exports
of domestic
markets, industry and
exchange,
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Table 2. Poverty in Zimbabwe in 1990 Geographic
region
History
Total population (millions)
1990
Percentage households below poverty line 1990
7.72
3 I .o
Created by pre-independence policies which moved smallscale farmers to communallyowned land areas as commercial farms expanded
5.55
33.0
Created by limited post independence redistribution of land bought by the government from commercial farmers and used to resettle landless households.
0.37
41.0
Result of pre- and post independence commercial farm activity (tobacco, sugar, cattle, soya, maize) which has concentrated wage labor in camps around these farms.
1.80
16.0
Urban areas
3.08
10.0
Country
10.8
25.0
Rural areas Communal Farm Areas
Resettlement
Large-Scale Farms
Areas
Commercial
Source: World Bank, 1995a. Vol. II, Table 2.2, p. 27 and Table 4.1. p. 83 (based on 1990 Census and 1990-91
(a) Health services Changes in the provision of health services reflect the additive influence which drought and ESAP had public health services and ultimately health outcomes. User fees for health services actually existed in both rural and urban areas prior to ESAP but were not strictly enforced. With ESAP in 1990, fees were both enforced and increased in order to achieve costrecovery. Meanwhile, total real health spending, real per capita health spending, and real wages of health personnel all declined by a third or more during 1990-94 as resources were siphoned off toward the drought relief program (Minot, 1994, Table Al; World Bank, 1995a, p. 57; Lennock, 1994, p. 14). At the same time, ESAP-related freezes in public health facility staffing levels and outreach programs to rural areas after 1992 further limited services. Besides becoming more expensive due to user fees, health services probably also became less available as well as less efficient during the early 1990s. User fees combined with reduced availability and quality of services may have adversely affected health among the poor during 1990-94 in critical areas such as prenatal care. The Sentinel Site Surveillance Surveys indicated that fees became a factor in keeping women from seeking prenatal care after 1992 and that the number of rural women in communal farm and resettlement areas delivering in clinics or hospital decreased by 20% (from 8 1.1%to
ICES)
69.5%) after user fees were instituted in 1992 (MPSLSW, 1993a, Table II, p.6 and MPSLSW, 1994, Table 10, p. 12). At the same time, a study by the country’s national health research institute found that the number of women delivering in Harare Central hospitals without prenatal care more than quadrupled (from 1.6% to 8.8% of all births) during 1991-93 increasing the risk of complications and perinatal mortality (Illif, 1992; Hongoro and Chandwana, 1994; Lennock, 1994). Alongside these changes in health-service use, maternal mortality rose from less than 80 to over 1 IO deaths per 100,000 births between 1990-93 (Minot, 1994, Table A.1 based on CSO Quarterly Statistics and Ministry of Health and Child Welfare-MHCW Quarterly Health Report) while low birthweight births and neonatal mortality probably also increased (Lennock, 1994).’
(b) Employment and wage.5 Trends in employment and wages after 1990 also reflect the additive effects ESAP and drought had during the early 1990s. Unfortunately, there were no regularly collected statistics on unemployment rates in Zimbabwe from the 1980s through the early 1990s. Comparison of data from a 1986-87 Labor Force Survey and the 1992 Census suggest, however, that unemployment probably doubled in most areas of the country from approximately 10% during the
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mid 1980s to approximately 20% after 1990 for the nation as a whole, with slightly higher rates in urban areas (Minot, 1994, p. 17). Rising unemployment during the period was triggered partly by droughtrelated reductions in domestic demand and production which in turn slowed forma1 sector job creation. Increased foreign competition and imports due to the relaxation of import restrictions, the reduction of centralized maize-milling operations, and staff freezes in the public sector (e.g. in health services) linked to ESAP probably also contributed to less formal sector job creation in domestic industry and rising unemployment. A special survey of the informal sector indicated that lower paying and less secure informal sector jobs (e.g. part-time employment, day work, market trading) increased as formal sector employment slowed during the early 1990s (McPherson, 1991 and Daniels, 1994). Alongside these changes in employment. real wages dropped by a quarter after 1990 largely due to the continued relaxation of government regulation of labor markets under ESAP (Van Der Hoven, 1993, pp. 22, p.28-29; Addison, 1996, pp. 39-40). Until the late 198Os, government regulation included strict control of hiring and firing, and minimum and maximum wage determination. Beginning in the late 1980s and continuing under ESAP in 1990, these regulations were relaxed resulting in the removal of legal controls on the minimum (and maximum) wage in early 1990 and the decentralization of power to employers in setting wages, laying off employees, extending working hours, and moving workers into lower paying jobs to cut costs (Addison, 1996, pp. 3940). The combined effects of declining wages, rising unemployment, and inflation (discussed further below) probably led to drops in real income among the poor from 1990-94 (Addison, 1996. pp. 23-2.5). The 1995 Poverty Assessment Survey provides some evidence of the adverse impacts which these changes in employment and wages may have had on poor households to 1994. In the 1995 PAS, over a third of very poor households (33%) and close to half of poor households (47%) reported unemployment and low wages as a main cause of poverty (MPSLSW, 1996, Table 4.12, p.60).
(c) Food security The effects of ESAP and drought were perhaps most complex in the area of food security during the 1990s. In addition to the combined additive effects which ESAP and drought had directly on food prices, the 1991-92 drought effected the timing and implementation of ESAP itself. Thus, interactive as well as additive effects between ESAP and drought had an impact on food security during the period. The major direct impacts of the 199 l-92 drought on
ADJUSTMENT
AND DROUGHT
1145
food security were widespread crop failure, declines in agricultural production and rising food prices through 1993. Because of these conditions, the planned removal of food subsidies under ESAP (on staple foods such as maize meal, bread, and sugar) were postponed mainly to protect the population from additional price increases. Meanwhile, in 1991 the government began a comprehensive range of drought-relief measures including: direct food relief, food for work programs, child supplementary feeding programs, farm debt rescheduling, seed distribution, livestock purchase and herd-rebuilding schemes, and tillage services. These activities were administered by a special unit within the Department of Social Welfare in the MPSLSW with resources drawn from donors (World Food Program and USAID), loans facilitated by the World Bank and USAID, and the channeling of funds away from other sectors (e.g., health) to drought relief programs. Drought relief programs were decentralized and had few qualifying criteria, applying to all primary school children and, via the food for work programs, virtually the total population (Van Der Hoven ef al., 1993, p.99). Several later evaluations judged that these relief efforts successfully averted widespread food shortage as a result of the drought (Hicks, 1993; Van Der Hoven et al., 1993, pp. 1 l-12; World Bank, 1995~). Concurrently, the Sentinel Site Surveillance Surveys indicated that three-quarters of households in rural areas applied for drought relief in 1993 and that malnutrition in the country did not worsen (and in some areas of the country it actually improved) after 1991 (MPSLSW, 1993a, b). The effectiveness of the drought relief program and a successful 1991-93 growing season subsequently allowed the removal of food subsidies as planned under ESAP with only a year’s delay in 1993. Along with the eventual removal of food subsidies at that time, the government also deregulated domestic maize marketing and production by removing the milling monopoly held by central mills. As a result, numerous small-scale local millers began operation, the availability of maize meal increased, and meal costs remain stable despite subsidy removal (Government of Zimbabwe, 1993, p.7 and, p.5). The real price of the other important staple foods, however, such as bread and sugar, increased significantly in real terms after subsidy removal in 1993, rising by 40% and 50%, respectively (Minot, 1994, Table 2, p. 6 based on CSO Quarterly Statistics). Inflation also remained above 20% per annum after 1990 and the overall consumer price index more than doubled during 1990-93 (World Bank, 1995a, Vol. 1, Figure 6, p. 9. Minot, 1994, Table 2, p.6) High inflation during the period was driven largely by falling agricultural production due to the
1146
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DEVELOPMENT
drought as well continued high public spending on drought relief (World Bank, l995a, Vol. I, Figure 6, p.9; Addison, 1996~. 19).” Cuts in Public spending, a key component of structural adjustment were thus not effectively implemented during 1990-94 due to drought relief and public sector borrowing continued to cut into 8-l 1% of the national GDP through 1994 (World Bank, 1995aVol. I, p.8; Addison, 1996~. 19). The combination of rising prices for most foods, inflation, and falling real wages and incomes noted above probably bad a negative impact on food security among the poor during 1990-94 despite the success of the drought relief program and stable maize meal prices, Initial data from the 1996 Poverty Assessment Survey (PAS) suggest that food insecurity was the most common factor characterizing households which fell below the poverty line in, 1994-95 with 74% of all poor households and 76% of all very poor households reporting food shortage (MPSLSW. 1996TabIe 4.1. p.52).
4. GOVERNMENT MEASURES AIMED AT PROTECTING THE CURRENTLY POOR 1990-94 As noted earlier, the Zimbabwe government entered structural adjustment with a formal commitment to protect the poor from ESAP impacts via the Social Development of Adjustment Program (SDA) (Chisvo and Munro. 1994~. I). The SDA provided for poverty monitoring efforts (through the Sentinel Surveillance Surveys) but its centrepiece was a direct transfer program, the Social Development Fund (SDF): which was administered through the Department of Social Welfare (DSW) within the MPSLSW. The SDF aimed to protect the poor from the negative impacts of subsidy removal, user fees, and unemployment and had three components: (a) direct transfers to cover food purchases for households with monthly incomes under a certain minimal level; (b) direct transfers to support health (and school) fee payment for these same households. and (c) employment and training programs to retrain laid off workers. All components were self-targeting and households had to formally apply for SDF benefits and actively demonstrate minimum income for eligibility. The SDF was funded by a combination of both government and donor aid. Several major evaluations by UNICEF and the MPSLSW (Chisvo and Munro, 1994~~. I8 and Kaseke, 1993respectively), OXFAM (Lennock, 1994), and the country’s trade unions (ZTWU and ZCTU, 1993) concluded that the SDF had not functioned effectively to 1994. Only 3% of the population eligible for food support and 20% eligible for health or school fee support had received aid by 1993 (Kaseke, 1993~. ii). Moreover. the job-training component in that year had only created around
2,000 jobs, “a paltry sum in a country with an active labor force of 5 million and an unemployment rate commonly estimated at over 25.0%” (Chisvo and Munro. 3994p.20). Reasons cited for the SDF’s lack of effectiveness included complicated application procedures which required travelling to centralized locations, cumbersome administrative procedures, delays in receiving aid, and inherent underfunding. The SDF’s available resources in fact, made up for only a third of declines in public spending during 1990-94 (Chisvo and Munro, 1994). Suggestions for improving the SDF therefore included increasing finding and resources, changing targeting strategies, decentralizing program activities, and reviewing the use of health user and school fees as a means of cost recovery (Kaseke, 1993 and Lennock, 1994; Chisvo and Munro, 1994). In response to the SDPs ineffectiveness in countering the negative impacts which user fees had on prenatal services and maternal and child health, the government did, in fact, suspend fees for primary health care in rural areas in 1995. Additional reform of the SDF is also being undertaken as part of a more recent SDA Program, the Poverty Alleviation Action plan (PAAP) which was launched by the MPSLSW. in 1993 in conjunction with UNDP (MPSLSW, 1993~). The PAAP is a much broader initiative which, as its name implies, goes beyond merely protecting the poor from the adverse impacts of structural adjustment to include poverty alleviation. The PAAP includes not only reform of the SDF but also more systematic efforts to monitor poverty (beginning with the 1995 Poverty Assessment Survey) and a community development project (CDP) program aimed at financing community infrastructure development, job creation, and income generation using support from donors such as the World Bank. The CDP component of the MAP has, in fact. become a major focus of SDA activity and marks a shift away from the exclusive use of direct transfer programs such as the SDF.
5. CONCLUSION Table 3 The above discussion provides a sense of the way in which structural adjustment and drought events may have affected the poor in Zimbabwe from, 1990-94. Although NGOs as well as monitoring agencies such as the World Bank often focus exclusively on the impacts of structural adjustment on the poor, ESAP should not be viewed in isolation but rather in conjunction with other important period events. ESAP and other events, as the example of drought in Zimbabwe suggests, may have additive impacts or they may interact to effect the poor. In Zimbabwe, as elsewhere, period events affecting the
CURRENT
POVERTY.
STRUCTURAL
ADJUSTMENT
Table 3. ESAP, drought, and critical areas affectinK the currently poor in Zimbabltv Health Additive ESAP events
-
Employment
user fees instituted freeze m health personnel
-
-
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AND DROUGHT
and wages
1990-94 Food Security
relaxation of trade restrictions, increased imports and decreased demand for domestic goods freeze in public sector jobs
removal of food subsidies deregulation of maize milling
~ removal of wage controls Additive drought events
-
real spending on health falls with shift in resources to drought relief
-
declines in domestic
-
-
purchasing production inflation
-
power and
Interactive of ESAP and drought events
-
-
Total impacts relevant to currently poor
-
-
~ ~
higher unemployment little formal sector job creation ~ increase in lower paying informal sector jobs - declining real wages and incomes
reduced use, access, and quality of health care (e.g.. prenatal care) increased maternal mortality and poorer birth outcomes
currently poor are clearly not limited to ESAP and drought. International events (e.g., restructuring of trade relationships with its neighbor South Africa or continued military spending due to regional conflicts), national events (e.g., land reform initiatives), and local events (e.g., decentralization of public services and programs) are all important additional factors for consideration in future analysis of changes affecting the currently poor in the era of structural, adjustment. The limited consideration undertaken here leads to the conclusion that changes in health services, employment and wages, and food security related to ESAP and drought events probably had an overall negative impact on the poor between 1990-94. As noted at the outset, these conclusions are necessarily
ESAP
Health
services
Employment wages Drought
and
Currently poor
Food security
Kl-
Figure
1. Total effects of ESAP and drought on arms importance to the current!\. poor.
c$
-
-
crop failure and declines in production drought relief program inflation removal of food subsidies and deregulation of maize production delayed due to drought (only by a year as a result of effective drought relief measures) planned cuts in public spending not undertaken due to drought relief thus adding to inflation price of maize meal remains stable but large increases in price for most other staple foods food insecurity
inferred due to a lack of direct information on changes among the poor. There is therefore a need for the direct monitoring of the impacts which changes in these and other areas (e.g., education) may have on the currently poor. Further analysis of the recently available 1995 Poverty Assessment Survey (PAS) and, in particular. use of these data as baseline information for monitoring future changes may be important to this end. Another, although less serious drought, occurred in 1995-96 in Zimbabwe and cycles of drought and structural adjustment will no doubt continue to go hand in hand through the decade. From a policy standpoint, this has several implications. First, it reveals the difficulty inherent in protecting the poor from a structural adjustment process, the implementation and impacts of which are ultimately not predictable due to its inevitable coincidence with other natural as well as man-made events. Given this, government responsiveness and flexibility in the implementation of structural adjustment is important for reducing negative impacts on the currently poor. In the short term at least, the Zimbabwean government has demonstrated this flexibility, in delaying the removal of maize subsidies until after the drought and in removing rural user fees in response to negative changes in maternal and child health. Secondly, given
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1148
the likely coincidence of future droughts with continuing adjustment measures in Zimbabwe, the closer coordination between ESAP and drought relief measures may be important in the future. Drought relief efforts slowed a key component of the structural adjustment process in Zimbabwe, namely deeper cuts in public sector spending. In the future, alternative strategies for funding drought relief may need to be designed which allow wide coverage without compromising public expenditure reform or the siphoning off of funds from other important sectors such as health. The meaning of poverty alleviation has clearly evolved in Zimbabwe through the era of structural adjustment. In the post independence period, poverty alleviation clearly centered on reducing current poverty through direct investment in rural commu-
nities in the form of expanded public services in health and education. At the outset of ESAP in 1990, poverty alleviation apparently shifted more toward reducing future poverty through the long-term structural adjustment process and merely protecting the currently poor from the short-term side-effects of adjustment via the SDF. The country’s recent Poverty Alleviation Action Plan, in which community-based development projects (CBDs) form an important component, marks a new phase in which efforts at poverty alleviation are occurring on multiple fronts including the reduction of current poverty by again investing directly in communities, the protection of the currently poor from adverse short-term ESAP impacts via the SDF, and the reduction of future poverty through the long-term process of adjustment itself.
NOTES The five-year ICES surveys emerged as part of I. the United Nations National Household Capability Survey program with the first being conducted in 1984-85. A 1995-96 ICES has been carried out but this these data were not generally available at the time of writing. ICES as well as other household survey data in Zimbabwe are generally treated as confidential and laws limit their general release for primary data analysis. Extensive analysis of the 1990-91 1CES was, however, carried out by the World Bank which has afforded greater access to this round. The biannual Sentinel Site Surveillance Surveys were instituted in 1992 as part of the Structural Dimensions of Adjustment program with the purpose of monitoring ESAP impacts. Data in the Sentinel Surveys include both household and community level information (e.g. on health and education facilities). Unfortunately, the information and methodologies 2. used to calculate poverty lines in the I995 PAS differ from those use in the 1990-91 ICES (see MPSLSW, 1996, Appendix III, p. 87 and World Bank, 1995a, Vol. II, pp. 444 45, respectively). Data from previous surveys and the PAS therefore cannot be easily compared to track changes in the prevalence, distribution and characteristics of the poor during 1990-94.
High prevalence of HIV infection in Zimbabwe 3. has also shaped maternal and other health outcomes since 1990. Current estimates indicate that 10% of the general population and 25% of the sexually active population in urban areas of Zimbabwe may be infected with HIV (World Bank, 1995b, Box 12, p. 13). According to a recent survey in urban areas, prevalence of HIV infection among pregnant women may be as high as 32% possibly one of the highest rates reported in the developing world (Government of Zimbabwe, forthcoming). The fact that maternal mortality actually began to increase slightly before the onset of the drought and ESAP in 1990 suggest the potential impact of increasing HIV infection. Major increases, however, did occur abruptly after 1990 suggesting the important impacts which ESAP-related user fees and drought related declines in health services had despite underlying morbidity trends.
Other factors contributing to continued public 4. spending and deficits included loss-making public enterprises (e.g., the dairy board and national cotton company) and military expenditures (Addison, 1996~. 19; World Bank, 1995~).
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the impact of economic (Draft of paper prepared for the Southern Africa Department of the World Bank 29 May). Africa Community Publishing and Development Trust (1995) The suffering ure the cornerstone in a building nation: communiQ views on poverty, povert): alleviation and we&h creation. Government of Zimbabwe and United National Development Program, Harare.
reform on poverty and income distribution
Central Statistical Office of Zimbabwe (CSO) (1994) income, consumption, and expenditurr survey (ICES) report 1990-91. CSO, Harare. Chisvo, M. and Munro, L. (1994) A review of social dimensions of adjustment in Zimbabwe 1990-94. UNICEF, Harare. Daniels, L. (1994) Impact @‘drought and reform on smallscale enterprises in Zimbabwe: results of a nationwide su~vcv. GEMINI Report 7 1. (Michigan: USAID/Devel-
CURRENT
POVERTY,
STRUCTURAL
opment Alternatives, Inc. and Michigan State University). Davis, R. and Rattso, J. (1996) Growth, distribution and environment: macroeconomic issues in Zimbabwe. World Development 24(2), 395405. Gibbon, P. (1995) Structural Adjustment and the working poor in Zimbabwe. Nordiska Afrikainstitutet, Uppsala, Sweden. Government of Zimbabwe (1991) Social dimensions of adjustment: a progrumme to mitigate the social costs c~j adjustment. Government of Zimbabwe, Harare. Government of Zimbabwe (1993) Social dimensions of adjustment progre.vs report and action plan. Report Presented at Consultative Group Meetings (Paris. I2214 December). Government of Zimbabwe (forthcoming) STI prevalence study, Harare. Harvey, C. (Ed.) (1996) Construints on the Success of Structural Adjustment in Africa. Macmillan, London. Hicks, D. (I 993) An evaluation of the Zimbabwe drought relief’ programme 1992/1993: The roles of household level response and decentralized decision making. World Food Program, Harare. Hongoro, C. and Chandwana, S. (1994) The effects of u.rrr,fees on health-care drlil,ery. Blair Research Institute, Harare. Husain, I. and Faruqee, R. (I 996) Adjustment in Africa: Lessons from country case studies. The World Bank, Aldershot, England and Brookfield, VT. Illif, P. (1992) A case for exempting maternity patientsfrom health service.v churge.5. University of Zimbabwe Medical School, Harare. Kadenge, P. G.. Ndoro, H. and Zwizwai, B. M. (1992) Zimbabwe structural aQu.stment programme: the fir.yt year experience. SAPES Books, Monograph Series, No. 2., SAPES Books, Harare. Kaseke. E. (1992) A situation cmalysis qf the Social Development Fund. Government of Zimbabwe, MPSLSW, Harare. Lennock, J. (1994) Paying for health: poverty and structural adjustment in Zimbabwe. Oxfam Publications, Oxford, UK. Lensink, R. (1996) Structural Adjustment in Sub-Snhnran Africa Longmann, London. McPherson, M. (1991) Small-scale enterprises in Zimbabwe: results ,from a nationwide survey. GEMINI Report 25. USAlD/Development Alternatives, Inc. and Michigan State University, Michigan Ministry of Public Service. (1992a) Labour and Social WelfarefMPSLSW, Results of First Round Sentinel Surveillance Surveys. MPSLSW and UNICEF, Harare. MPSLSW, (1992b) Results of Second Round Sentinel Surveillance Surveys. MPSLSW and UNICEF, Harare. MPSLSW, (1993a) Results of third round sentinel surveillance survey. MPSLSW and UNICEF, Harare. MPSLSW, (1993b) Result5 of fourth round sentinel surveillance surveys. MPSLSW and UNICEF, Harare. MPSLSW, (1993~) Poverty alleviation action plan. Government of Zimbabwe, Harare.
ADJUSTMENT
AND DROUGHT
1149
MPSLSW. (1994) Results qf fifth round sentinel surveillance surveys. MPSLSW and UNICEF, Harare. MPSLSW, (1995) Poverty assessment study: mid-term report. January 1995 to August 1995. MPSLSW, Social Development Fund Unit, Harare. MPSLSW, (1996) 1995 poverty assessment study survey: preliminav report. MPSLSW, Social Development Fund Unit, Harare. Minot, N. (1994) Trends in social indicators. SDA Advisor Monitoring and Implementation Unit, MPSLSW, Harare. Mosley, P. and Weeks, J. (1993) Has recovery begun? Africas’s adjustment in the 1980s revisited. World Development. 21(10), 1583-1606. Mosley, P., Subasat, T. and Weeks, J. (1996) Assessing adjustment in Africa. World Development 23(9), 14591473. OXFAM ( 1995) The Oxfam poverty report Oxfam, London. Renfew, A. (1992) ESAP and Health. Mambo Press, Harare. Ribe, H., Carvalho, S., Liebenthal, R., Nicholas, P. and Zuckerman, E. (1990) How adjustment programs can help the poor: the World Bank’s experience. World Bank Discussion Paper, No. 7 1.The World Bank, Washington D.C. Riddell, R. (1992) Zimbabwe to 1996: At the heurt of a growing region, Economist Intelligence Unit Economic Prospects Series Special Report No 1. M205. EIU, London. Silveira House, (1993) A critical guide to ESAP. Mambo Press, Gweru. Stenflo, G. A. (1994) Poverty in Zimbabwe 1990-91: report from a .vhort-term mission to the central statistical ofice, Harare, November 9-December 19, 1993. Statistics, Stockholm. Sweden. Van Der Hoven, R., Marinakis, A., Baily, C. and Van Ginneken, W. (1993) Structural change and adjustment in Zimbabwe, International Development Project on Structural Adjustment Occasional Paper No. 16. ILO, Geneva. von Blanckenburg, P. (1994) Large Commercial Farmers and Land Reform in Africa: The Case of Zimbabwe. Avebury, Aldershot, England. World Bank (I 995a) Zimbabwe: achieving shared growth. Country Economic Memorandum, Volumes I and II. The World Bank, Washington, D.C. World Bank (1995b) The public sector and poverty reduction options. Discussion/Background Paper, County Economic Memorandum, Zimbabwe. The World Bank, Harare. World Bank (1995~) Public expenditure review: agriculture. The World Bank, Harare Zimbabwe Textile Workers Union (ZTWU) (1993) and Zimbabwe, Congress of Trade Unions (ZCTU) Health and Social Welfare Department. Report on structural adjustment and its impacts on workers. ZTWU and ZCTU, Harare.
Vol. 25, No. 7, pp. 1141-l 149, 1997 0 1997 Elsevier Science Ltd All rights reserved. Printed in Great Britain 0305-750x/97 $17.00 + 0.00
Pergamon PII: s0305-750x(97)00019-3
Current Poverty, Structural Adjustment, in Zimbabwe CATHERINE
and Drought
M. MARQUETTE
Christian Michelsen Institute, Bergen, Norway Summary. - Considering the impact of economic structural adjustment programs (ESAP) on the poor is not straightforward because ESAP involves changes affecting future poverty as well as the currently poor. In addition, structural adjustment measures occur alongside other events which may have additive as well as interactive effects with ESAP. In Zimbabwe, for example, the initial years of ESAP implementation overlapped with the onset of a major drought in 1991-92. Understanding changes affecting the poor during the period thus involves considering both these events. This paper considers the effects which ESAP and the drought had on the poor in Zimbabwe during the initial years of the structural adjustment process from 1990-94. Relevant background information on structural adjustment and drought in Zimbabwe are presented. The effects which ESAP and drought had on three areas critical to the currently poor: (a) health services, (b) employment and wages, and (c) food security are then considered. Finally, major government programs specifically targeted at the poor during the period (the Social Development Fund and Poverty Alleviation Action Plan) are discussed. It is concluded that ESAP and drought events adversely affected health, employment and wages, and food security and thus had negative impacts on the poor from 1990-94. Given recurrent drought and the continuing process of adjustment in Zimbabwe, government flexibility in implementing ESAP as well as coordination of
efforts to protect the poor from the negative outcomes of both drought and adjustment is recommended. The government’s recent Poverty Alleviation Action Plan may mark a new phase in which reduction of current poverty, the protection of the currently poor, and future poverty alleviation may go hand in hand. 0 1997 Elsevier Science Ltd Key words -
Southern Africa, Zimbabwe,
poverty, structural
I. INTRODUCTION Over the last several decades, national govemments across the developing world have implemented economic structural adjustment programs (ESAP). In Zimbabwe, as in other countries, this process has involved a series of planned macroeconomic measures, including deregulation of the domestic economy, less restrictive trade policies, and reductions in public spending which are all aimed at promoting sustainable economic growth. The effectiveness of ESAP as a macroeconomic strategy in Zimbabwe and elsewhere in Africa continues to be intensely debated within the development community (see, for example, Riddell, 1992; Mosely and Weeks, 1993; Van Der Hoven et al., 1993; Mosley et al., 1996; Addison, 1996; Davis and Rattso, 1996; Harvey, 1996; Husain and Faruquee, 1996; Lensink, 1996). Meanwhile, nongovernmental organizations (NGOs) in Zimbabwe, as in other countries, have raised concerns over the social costs of adjustment for vulnerable groups, such as the poor (Renfew, 1992; Silveira House, 1993; ZTWU and ZCTU,
adjustment,
drought
1993; Lennock, 1994; Africa Community Publishing and Development Trust, 1995; Gibbon, 1995; OXFAM, 1995). Understanding the impact of Zimbabwe’s (or any country’s) structural adjustment program on the poor, however, is not straightforward. It involves considering two different dimensions of poverty: future poverty and the currently poor (Ribe et al., 1990). A central assumption of the structural adjustment process is that over the long-term it will produce more sustainable growth and thus, reduce future poverty. Meanwhile, removal of food subsidies or wage controls and reduced expenditures on public services under ESAP may have short-term immediate effects on the currently poor who may have to pay more for basic items such as food, have access to fewer public services, and may lose the security of a minimum wage. Alternatively, the short-term effects on the currently poor might also be beneficial since deregulation of domestic markets
1141
Final revision accepted:
February
8, 1997.
I II:!
WORLD
DEVELOPMENT
may lead to more competition and cheaper prices. In any case. considering ESAP in relation to poverty requires distinguishin, 0 between long-term effects on future poverty and short-term effects on the currently poor. A second factor which makes consideration of the impacts of structural adjustment on poverty complex is that in Zimbabwe, as in other countries. structural adjustment measures occur alongside other period events which may have additive as well as interactive effects with ESAP. In Zimbabwe, for example. ESAP implementation in 1990 overlapped with the onset of a major drought in 1991-92. Understanding changes affecting the poor during the initial years of ESAP thus involves considering both structural adjustment and drought-related events. Taking the above factors into account, this paper considers the short-term effects which the coinciding events of ESAP and the drought have had on several areas of critical importance to the CLITYCII~I~ poor in Zimbabwe during 1990-94. Long-term changes affecting future poverty. and economic growth are not the focus of this paper but do continue to be undertaken elsewhere (e.g. Van Der Hoven et al., 1993; Addison. 1996: Davis and Rattso. 1996). Discussion first provides relevant background information on structural adjustment and drought in Zimbabwe. Next, we consider the potential effects which the combined events of ESAP and drought habe had on (a) health, (b) employment and wages. and (c) food security. Finally, government measures specifically targeted at the currently poor during the period (the Social Development Fund and the more recent Poverty Alleviation Action Plan) are considered. Zimbabwe presents a particular challenge in studying changes amon g the poor because of an absence of direct longitudinal data on poverty during the 1980s and early 1990s (Addison, 1996. p.21). The data used here are mainly routine statistics collected by the Zimbabwe Central Statistics Office (CSO) and the most recent rounds of two on-going national household surveys. These include the 19909 I National Income Consumption Expenditure Survey (ICES) (14.000 households) collected by CSO every five years (CSO, 1994) and the biannually collected Sentinel Site Surveillance Surveys (approximately 4,000-5,000 households and 40 representative communities) fielded by Ministry of Public Service, Labor and Social Welfare (MPSLSW) during 1992-94 (MPSLSW, 1992a. b. 1993a. b, 1994).’ Although the ICES allows measurement of the prevalence of poverty (via calculation of a poverty line). the ICES and Sentinel Surveys refer mainly to the general population from which inference about the poor must be made. A major limitation of the following discussion is that it is largely based on inference rather than direct
information on the currently poor. In 1995. a Poverty Assessment Survey (PAS) ( 15,000 households) was carried out by the MPSLSW as past of the 1993 Poverty Alleviation Action Plan (PAAP) (discussed further below). This survey has collected, for the first time, information directly on poor households in the country. Limited initial tabulations from the 1995 National Poverty Assessment Survey (PAS) have recently become available and are considered below as well (MPSLSW. 1995. 1996).’
2. BACKGROUND ON STRUCTURAL ADJUSTMENT AND DROUGHT IN ZIMBABWE In 1980, Rhodesia emerged from a decade of civil war as Zimbabwe. The country’s new leaders were drawn from the Marxist-Leninist resistance which had led the armed struggle for majority rule. The post independence government. not surprisingly. adopted a state-socialist approach which actively sought to reduce poverty. During the 1980‘s. government driven improvements in basic services and support directed toward smallholder agriculture led to dramatic improvements in social welfare indicators. During 1980-90, immunization coverage was expanded to cover most children, infant and under-five mortality fell by half. and primary school enrollment became almost universal (World Bank. 199Sa. Vol. 11. Table 3.1, p.49 and Statistical Annexes Table 1.1. p. 150). In contrast, key macroeconomic indicators remained stagnant throughout much of the 1980s as a result of policy begun before and continued after independence. In the 1970s. international economic sanctions imposed on Rhodesia’s minority-rule government led the country to a policy of import substitution. In addition. in an effort to create a pool of available labor for the country’s industries. Rhodesian law effectively prevented black workers from becoming self-employed or owning land (Van Der Hoven rt al., 1993, p.26 and Von Blankenburg. 1994, ~15.) As a result of these factors, the manufacturing and industrial sectors of Zimbabwe. unlike other African countries, have historically accounted for a larger portion of country’s GDP (357~ in 1992) and more of the formal labor force (16% in 1992) (World Bank, 1995a. Vol. II. p. 1). An additional implication is that production in Zimbabwe has been historically dominated by domestic rather than foreign market concerns. Strict protection and regulation of the domestic market, begun before independence, continued through the 1980s in the form of import and export controls and control of domestic prices. wages. and employment. The continuing controlled nature of Zimbabwe’s economy through the 1980s hampered investment and export-led growth in both manufacturing and
CURRENT
POVERTY.
STRUCTURAL
commercial agriculture (Kadenge et al., 1992; Davis and Rattso, 1996; World Bank, 1995a, Vol. I, pp. 47). Meanwhile, a shift of government emphasis and resources toward smallholder agricultural after independence restricted renewal of industrial infrastructure while retarding further development of commercial agriculture, another important sector (World Bank, 1995aVol. I, pp. 4-7). Public deficits linked to social service expansion and military spending linked to on-going armed conflict with Mozambique had also taken their toll by the late 1980s eating away at about 10% of the GDP annually (Van Der Hoven, 199313.24; World Bank, 1995a, Vol. I, p. 1-13). At that time, the Zimbabwean government began taking measures (more flexible exchange rate policy and relaxing controls on investment and export regulation) aimed at stimulating more rapid economic growth via foreign investment and foreign currency earning (World Bank, 1995a, Vol. I, p.6; Davis and Rattso, 1996, p.396; Addison, 1996, p.17). In 1990, the government subsequently launched a fullyfledged International Monetary Fund (IMF) and World Bank-monitored program of economic structural adjustment (ESAP) which aimed to deregulate the domestic economy (prices, employment, and wages). reduce the public deficit, and continue relaxing restrictions on trade. As in other countries, ESAP in Zimbabwe signaled a formal shift away from state interventionism and regulation toward noninterventionism, privatization, and deregulation (see Table 1). As part of the structural adjustment process, the Zimbabwean government concurrently began a Social Dimensions of Adjustment Program (SDA) (Government of Zimbabwe, 199 1 and Government of Zimbabwe, 1993) aimed at reducing negative impacts on the currently poor (discussed further below). Although the basic elements are similar, the reasons why ESAP is undertaken as well as the course it eventually takes vary by country. Unlike many other nations, structural adjustment in Zimbabwe was not instituted in response to an acute “crisis situation” (Van Der Hoven, 1993, p.3 and
ADJUSTMENT
1143
p.33) but rather as an effort to jump-start economic growth. For Zimbabwe, economic crisis ironically followed rather than preceded ESAP and was triggered by the combined effects of ESAP, which loosened the traditionally controlled Zimbabwean economy, as well as natural disaster. The onset of a severe drought in 1991-92 followed rapidly on the heels of ESAP implementation in 1990. Although Zimbabwe is historically prone to recurrent cycles of drought, the 1991-92 episode was probably the worst in this century (Van Der Hoven, 1993, pp. 1 l12). Drought and ESAP events were thus intertwined from the outset. Discussion below considers in more detail the implications which the combined effects of ESAP and drought had on several areas of critical importance to the currently poor.
3. IMPACT OF ESAP AND DROUGHT ON AREAS IMPORTANT TO THE CURRENTLY POOR Table 2 presents information on the distribution of population and poverty in Zimbabwe in 1990 at the onset of structural adjustment. In the absence of direct longitudinal information on these groups and subgroups of the poor, discussion below considers the impact which concurrent ESAP and drought events had three areas: (a) health services, (b) employment and wages, (c) and food security. Data from the 1990-91 ICES, indicate that the poor in Zimbabwe spend a third to twice as much of their total expenditures on health care and food than the non-poor (Stenflo, 1994, Table 14, p. 33). Because of their particular patterns of consumption and expenditure, the currently poor in Zimbabwe are thus particularly vulnerable to changes affecting health care and food prices (Ribe et al., 1990, p.4). Since they are generally also the group which benefits most from minimum wage controls and may he hardest hit by lay-offs, changes in employment and wages may also have disproportionate effects on the poor and are also considered.
Table 1. Changing policies in Zimbabwe Policies
AND DROUGHT
1980s
1980-90 Structural
Adjustment
1990
Domestic economy
Regulation of marketing of agricultural commodities, price control through food subsidies, nationalization of basic industries, centralized wage controls and regulation of employment
Deregulation labor
Public sector
Government spending to expand public services especially in health and education
Reduction of public spending and deficit. Cost recovery in health and education
Trade
Regulation of foreign investment, exchange, and imports/exports
Deregulation of foreign investment, and imports/exports
of domestic
markets, industry and
exchange,
1144
WORLD DEVELOPMENT
Table 2. Poverty in Zimbabwe in 1990 Geographic
region
History
Total population (millions)
1990
Percentage households below poverty line 1990
7.72
3 I .o
Created by pre-independence policies which moved smallscale farmers to communallyowned land areas as commercial farms expanded
5.55
33.0
Created by limited post independence redistribution of land bought by the government from commercial farmers and used to resettle landless households.
0.37
41.0
Result of pre- and post independence commercial farm activity (tobacco, sugar, cattle, soya, maize) which has concentrated wage labor in camps around these farms.
1.80
16.0
Urban areas
3.08
10.0
Country
10.8
25.0
Rural areas Communal Farm Areas
Resettlement
Large-Scale Farms
Areas
Commercial
Source: World Bank, 1995a. Vol. II, Table 2.2, p. 27 and Table 4.1. p. 83 (based on 1990 Census and 1990-91
(a) Health services Changes in the provision of health services reflect the additive influence which drought and ESAP had public health services and ultimately health outcomes. User fees for health services actually existed in both rural and urban areas prior to ESAP but were not strictly enforced. With ESAP in 1990, fees were both enforced and increased in order to achieve costrecovery. Meanwhile, total real health spending, real per capita health spending, and real wages of health personnel all declined by a third or more during 1990-94 as resources were siphoned off toward the drought relief program (Minot, 1994, Table Al; World Bank, 1995a, p. 57; Lennock, 1994, p. 14). At the same time, ESAP-related freezes in public health facility staffing levels and outreach programs to rural areas after 1992 further limited services. Besides becoming more expensive due to user fees, health services probably also became less available as well as less efficient during the early 1990s. User fees combined with reduced availability and quality of services may have adversely affected health among the poor during 1990-94 in critical areas such as prenatal care. The Sentinel Site Surveillance Surveys indicated that fees became a factor in keeping women from seeking prenatal care after 1992 and that the number of rural women in communal farm and resettlement areas delivering in clinics or hospital decreased by 20% (from 8 1.1%to
ICES)
69.5%) after user fees were instituted in 1992 (MPSLSW, 1993a, Table II, p.6 and MPSLSW, 1994, Table 10, p. 12). At the same time, a study by the country’s national health research institute found that the number of women delivering in Harare Central hospitals without prenatal care more than quadrupled (from 1.6% to 8.8% of all births) during 1991-93 increasing the risk of complications and perinatal mortality (Illif, 1992; Hongoro and Chandwana, 1994; Lennock, 1994). Alongside these changes in health-service use, maternal mortality rose from less than 80 to over 1 IO deaths per 100,000 births between 1990-93 (Minot, 1994, Table A.1 based on CSO Quarterly Statistics and Ministry of Health and Child Welfare-MHCW Quarterly Health Report) while low birthweight births and neonatal mortality probably also increased (Lennock, 1994).’
(b) Employment and wage.5 Trends in employment and wages after 1990 also reflect the additive effects ESAP and drought had during the early 1990s. Unfortunately, there were no regularly collected statistics on unemployment rates in Zimbabwe from the 1980s through the early 1990s. Comparison of data from a 1986-87 Labor Force Survey and the 1992 Census suggest, however, that unemployment probably doubled in most areas of the country from approximately 10% during the
CURRENT
POVERTY.
STRUCTURAL
mid 1980s to approximately 20% after 1990 for the nation as a whole, with slightly higher rates in urban areas (Minot, 1994, p. 17). Rising unemployment during the period was triggered partly by droughtrelated reductions in domestic demand and production which in turn slowed forma1 sector job creation. Increased foreign competition and imports due to the relaxation of import restrictions, the reduction of centralized maize-milling operations, and staff freezes in the public sector (e.g. in health services) linked to ESAP probably also contributed to less formal sector job creation in domestic industry and rising unemployment. A special survey of the informal sector indicated that lower paying and less secure informal sector jobs (e.g. part-time employment, day work, market trading) increased as formal sector employment slowed during the early 1990s (McPherson, 1991 and Daniels, 1994). Alongside these changes in employment. real wages dropped by a quarter after 1990 largely due to the continued relaxation of government regulation of labor markets under ESAP (Van Der Hoven, 1993, pp. 22, p.28-29; Addison, 1996, pp. 39-40). Until the late 198Os, government regulation included strict control of hiring and firing, and minimum and maximum wage determination. Beginning in the late 1980s and continuing under ESAP in 1990, these regulations were relaxed resulting in the removal of legal controls on the minimum (and maximum) wage in early 1990 and the decentralization of power to employers in setting wages, laying off employees, extending working hours, and moving workers into lower paying jobs to cut costs (Addison, 1996, pp. 3940). The combined effects of declining wages, rising unemployment, and inflation (discussed further below) probably led to drops in real income among the poor from 1990-94 (Addison, 1996. pp. 23-2.5). The 1995 Poverty Assessment Survey provides some evidence of the adverse impacts which these changes in employment and wages may have had on poor households to 1994. In the 1995 PAS, over a third of very poor households (33%) and close to half of poor households (47%) reported unemployment and low wages as a main cause of poverty (MPSLSW, 1996, Table 4.12, p.60).
(c) Food security The effects of ESAP and drought were perhaps most complex in the area of food security during the 1990s. In addition to the combined additive effects which ESAP and drought had directly on food prices, the 1991-92 drought effected the timing and implementation of ESAP itself. Thus, interactive as well as additive effects between ESAP and drought had an impact on food security during the period. The major direct impacts of the 199 l-92 drought on
ADJUSTMENT
AND DROUGHT
1145
food security were widespread crop failure, declines in agricultural production and rising food prices through 1993. Because of these conditions, the planned removal of food subsidies under ESAP (on staple foods such as maize meal, bread, and sugar) were postponed mainly to protect the population from additional price increases. Meanwhile, in 1991 the government began a comprehensive range of drought-relief measures including: direct food relief, food for work programs, child supplementary feeding programs, farm debt rescheduling, seed distribution, livestock purchase and herd-rebuilding schemes, and tillage services. These activities were administered by a special unit within the Department of Social Welfare in the MPSLSW with resources drawn from donors (World Food Program and USAID), loans facilitated by the World Bank and USAID, and the channeling of funds away from other sectors (e.g., health) to drought relief programs. Drought relief programs were decentralized and had few qualifying criteria, applying to all primary school children and, via the food for work programs, virtually the total population (Van Der Hoven ef al., 1993, p.99). Several later evaluations judged that these relief efforts successfully averted widespread food shortage as a result of the drought (Hicks, 1993; Van Der Hoven et al., 1993, pp. 1 l-12; World Bank, 1995~). Concurrently, the Sentinel Site Surveillance Surveys indicated that three-quarters of households in rural areas applied for drought relief in 1993 and that malnutrition in the country did not worsen (and in some areas of the country it actually improved) after 1991 (MPSLSW, 1993a, b). The effectiveness of the drought relief program and a successful 1991-93 growing season subsequently allowed the removal of food subsidies as planned under ESAP with only a year’s delay in 1993. Along with the eventual removal of food subsidies at that time, the government also deregulated domestic maize marketing and production by removing the milling monopoly held by central mills. As a result, numerous small-scale local millers began operation, the availability of maize meal increased, and meal costs remain stable despite subsidy removal (Government of Zimbabwe, 1993, p.7 and, p.5). The real price of the other important staple foods, however, such as bread and sugar, increased significantly in real terms after subsidy removal in 1993, rising by 40% and 50%, respectively (Minot, 1994, Table 2, p. 6 based on CSO Quarterly Statistics). Inflation also remained above 20% per annum after 1990 and the overall consumer price index more than doubled during 1990-93 (World Bank, 1995a, Vol. 1, Figure 6, p. 9. Minot, 1994, Table 2, p.6) High inflation during the period was driven largely by falling agricultural production due to the
1146
WORLD
DEVELOPMENT
drought as well continued high public spending on drought relief (World Bank, l995a, Vol. I, Figure 6, p.9; Addison, 1996~. 19).” Cuts in Public spending, a key component of structural adjustment were thus not effectively implemented during 1990-94 due to drought relief and public sector borrowing continued to cut into 8-l 1% of the national GDP through 1994 (World Bank, 1995aVol. I, p.8; Addison, 1996~. 19). The combination of rising prices for most foods, inflation, and falling real wages and incomes noted above probably bad a negative impact on food security among the poor during 1990-94 despite the success of the drought relief program and stable maize meal prices, Initial data from the 1996 Poverty Assessment Survey (PAS) suggest that food insecurity was the most common factor characterizing households which fell below the poverty line in, 1994-95 with 74% of all poor households and 76% of all very poor households reporting food shortage (MPSLSW. 1996TabIe 4.1. p.52).
4. GOVERNMENT MEASURES AIMED AT PROTECTING THE CURRENTLY POOR 1990-94 As noted earlier, the Zimbabwe government entered structural adjustment with a formal commitment to protect the poor from ESAP impacts via the Social Development of Adjustment Program (SDA) (Chisvo and Munro. 1994~. I). The SDA provided for poverty monitoring efforts (through the Sentinel Surveillance Surveys) but its centrepiece was a direct transfer program, the Social Development Fund (SDF): which was administered through the Department of Social Welfare (DSW) within the MPSLSW. The SDF aimed to protect the poor from the negative impacts of subsidy removal, user fees, and unemployment and had three components: (a) direct transfers to cover food purchases for households with monthly incomes under a certain minimal level; (b) direct transfers to support health (and school) fee payment for these same households. and (c) employment and training programs to retrain laid off workers. All components were self-targeting and households had to formally apply for SDF benefits and actively demonstrate minimum income for eligibility. The SDF was funded by a combination of both government and donor aid. Several major evaluations by UNICEF and the MPSLSW (Chisvo and Munro, 1994~~. I8 and Kaseke, 1993respectively), OXFAM (Lennock, 1994), and the country’s trade unions (ZTWU and ZCTU, 1993) concluded that the SDF had not functioned effectively to 1994. Only 3% of the population eligible for food support and 20% eligible for health or school fee support had received aid by 1993 (Kaseke, 1993~. ii). Moreover. the job-training component in that year had only created around
2,000 jobs, “a paltry sum in a country with an active labor force of 5 million and an unemployment rate commonly estimated at over 25.0%” (Chisvo and Munro. 3994p.20). Reasons cited for the SDF’s lack of effectiveness included complicated application procedures which required travelling to centralized locations, cumbersome administrative procedures, delays in receiving aid, and inherent underfunding. The SDF’s available resources in fact, made up for only a third of declines in public spending during 1990-94 (Chisvo and Munro, 1994). Suggestions for improving the SDF therefore included increasing finding and resources, changing targeting strategies, decentralizing program activities, and reviewing the use of health user and school fees as a means of cost recovery (Kaseke, 1993 and Lennock, 1994; Chisvo and Munro, 1994). In response to the SDPs ineffectiveness in countering the negative impacts which user fees had on prenatal services and maternal and child health, the government did, in fact, suspend fees for primary health care in rural areas in 1995. Additional reform of the SDF is also being undertaken as part of a more recent SDA Program, the Poverty Alleviation Action plan (PAAP) which was launched by the MPSLSW. in 1993 in conjunction with UNDP (MPSLSW, 1993~). The PAAP is a much broader initiative which, as its name implies, goes beyond merely protecting the poor from the adverse impacts of structural adjustment to include poverty alleviation. The PAAP includes not only reform of the SDF but also more systematic efforts to monitor poverty (beginning with the 1995 Poverty Assessment Survey) and a community development project (CDP) program aimed at financing community infrastructure development, job creation, and income generation using support from donors such as the World Bank. The CDP component of the MAP has, in fact. become a major focus of SDA activity and marks a shift away from the exclusive use of direct transfer programs such as the SDF.
5. CONCLUSION Table 3 The above discussion provides a sense of the way in which structural adjustment and drought events may have affected the poor in Zimbabwe from, 1990-94. Although NGOs as well as monitoring agencies such as the World Bank often focus exclusively on the impacts of structural adjustment on the poor, ESAP should not be viewed in isolation but rather in conjunction with other important period events. ESAP and other events, as the example of drought in Zimbabwe suggests, may have additive impacts or they may interact to effect the poor. In Zimbabwe, as elsewhere, period events affecting the
CURRENT
POVERTY.
STRUCTURAL
ADJUSTMENT
Table 3. ESAP, drought, and critical areas affectinK the currently poor in Zimbabltv Health Additive ESAP events
-
Employment
user fees instituted freeze m health personnel
-
-
1147
AND DROUGHT
and wages
1990-94 Food Security
relaxation of trade restrictions, increased imports and decreased demand for domestic goods freeze in public sector jobs
removal of food subsidies deregulation of maize milling
~ removal of wage controls Additive drought events
-
real spending on health falls with shift in resources to drought relief
-
declines in domestic
-
-
purchasing production inflation
-
power and
Interactive of ESAP and drought events
-
-
Total impacts relevant to currently poor
-
-
~ ~
higher unemployment little formal sector job creation ~ increase in lower paying informal sector jobs - declining real wages and incomes
reduced use, access, and quality of health care (e.g.. prenatal care) increased maternal mortality and poorer birth outcomes
currently poor are clearly not limited to ESAP and drought. International events (e.g., restructuring of trade relationships with its neighbor South Africa or continued military spending due to regional conflicts), national events (e.g., land reform initiatives), and local events (e.g., decentralization of public services and programs) are all important additional factors for consideration in future analysis of changes affecting the currently poor in the era of structural, adjustment. The limited consideration undertaken here leads to the conclusion that changes in health services, employment and wages, and food security related to ESAP and drought events probably had an overall negative impact on the poor between 1990-94. As noted at the outset, these conclusions are necessarily
ESAP
Health
services
Employment wages Drought
and
Currently poor
Food security
Kl-
Figure
1. Total effects of ESAP and drought on arms importance to the current!\. poor.
c$
-
-
crop failure and declines in production drought relief program inflation removal of food subsidies and deregulation of maize production delayed due to drought (only by a year as a result of effective drought relief measures) planned cuts in public spending not undertaken due to drought relief thus adding to inflation price of maize meal remains stable but large increases in price for most other staple foods food insecurity
inferred due to a lack of direct information on changes among the poor. There is therefore a need for the direct monitoring of the impacts which changes in these and other areas (e.g., education) may have on the currently poor. Further analysis of the recently available 1995 Poverty Assessment Survey (PAS) and, in particular. use of these data as baseline information for monitoring future changes may be important to this end. Another, although less serious drought, occurred in 1995-96 in Zimbabwe and cycles of drought and structural adjustment will no doubt continue to go hand in hand through the decade. From a policy standpoint, this has several implications. First, it reveals the difficulty inherent in protecting the poor from a structural adjustment process, the implementation and impacts of which are ultimately not predictable due to its inevitable coincidence with other natural as well as man-made events. Given this, government responsiveness and flexibility in the implementation of structural adjustment is important for reducing negative impacts on the currently poor. In the short term at least, the Zimbabwean government has demonstrated this flexibility, in delaying the removal of maize subsidies until after the drought and in removing rural user fees in response to negative changes in maternal and child health. Secondly, given
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the likely coincidence of future droughts with continuing adjustment measures in Zimbabwe, the closer coordination between ESAP and drought relief measures may be important in the future. Drought relief efforts slowed a key component of the structural adjustment process in Zimbabwe, namely deeper cuts in public sector spending. In the future, alternative strategies for funding drought relief may need to be designed which allow wide coverage without compromising public expenditure reform or the siphoning off of funds from other important sectors such as health. The meaning of poverty alleviation has clearly evolved in Zimbabwe through the era of structural adjustment. In the post independence period, poverty alleviation clearly centered on reducing current poverty through direct investment in rural commu-
nities in the form of expanded public services in health and education. At the outset of ESAP in 1990, poverty alleviation apparently shifted more toward reducing future poverty through the long-term structural adjustment process and merely protecting the currently poor from the short-term side-effects of adjustment via the SDF. The country’s recent Poverty Alleviation Action Plan, in which community-based development projects (CBDs) form an important component, marks a new phase in which efforts at poverty alleviation are occurring on multiple fronts including the reduction of current poverty by again investing directly in communities, the protection of the currently poor from adverse short-term ESAP impacts via the SDF, and the reduction of future poverty through the long-term process of adjustment itself.
NOTES The five-year ICES surveys emerged as part of I. the United Nations National Household Capability Survey program with the first being conducted in 1984-85. A 1995-96 ICES has been carried out but this these data were not generally available at the time of writing. ICES as well as other household survey data in Zimbabwe are generally treated as confidential and laws limit their general release for primary data analysis. Extensive analysis of the 1990-91 1CES was, however, carried out by the World Bank which has afforded greater access to this round. The biannual Sentinel Site Surveillance Surveys were instituted in 1992 as part of the Structural Dimensions of Adjustment program with the purpose of monitoring ESAP impacts. Data in the Sentinel Surveys include both household and community level information (e.g. on health and education facilities). Unfortunately, the information and methodologies 2. used to calculate poverty lines in the I995 PAS differ from those use in the 1990-91 ICES (see MPSLSW, 1996, Appendix III, p. 87 and World Bank, 1995a, Vol. II, pp. 444 45, respectively). Data from previous surveys and the PAS therefore cannot be easily compared to track changes in the prevalence, distribution and characteristics of the poor during 1990-94.
High prevalence of HIV infection in Zimbabwe 3. has also shaped maternal and other health outcomes since 1990. Current estimates indicate that 10% of the general population and 25% of the sexually active population in urban areas of Zimbabwe may be infected with HIV (World Bank, 1995b, Box 12, p. 13). According to a recent survey in urban areas, prevalence of HIV infection among pregnant women may be as high as 32% possibly one of the highest rates reported in the developing world (Government of Zimbabwe, forthcoming). The fact that maternal mortality actually began to increase slightly before the onset of the drought and ESAP in 1990 suggest the potential impact of increasing HIV infection. Major increases, however, did occur abruptly after 1990 suggesting the important impacts which ESAP-related user fees and drought related declines in health services had despite underlying morbidity trends.
Other factors contributing to continued public 4. spending and deficits included loss-making public enterprises (e.g., the dairy board and national cotton company) and military expenditures (Addison, 1996~. 19; World Bank, 1995~).
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