Zambia’s Economic Reforms a Trade-Off

It is only 8 a.m., but already crowds of enthusiastic shoppers gather amid the jungle of wooden vending stalls that jam Lusaka’s Freedom Way.

Enos Kasongo, a street trader for the last four years, has come to expect eager consumers scrutinizing the mounds of shoe polish, washing detergent, toiletries, cosmetics and cigarettes piled atop his stand.

“Business isn’t bad,” said Kasongo, 24, a former baker for a state company. On a good day, he can net $30--quite respectable considering that the average annual income per person in Zambia is only $350. “I’m glad to be selling here.”

Just six years ago, before this Central African nation embarked on an ambitious program to sell off state enterprises, traders such as Kasongo were shunned as speculators and black marketeers. Today, they are part of the fallout from this privatization of government-owned ventures.

To date, 75% of state companies have been sold to private investors. Fewer than 400,000 people in Zambia’s 6-million-strong work force are employed, either in the private or public sector. Most, like the street traders, are in the informal economy.

The hawkers are despised by legitimate shop owners, who say they steal business, smuggle goods into the country and rob the government of tax revenue. Attempts by the authorities to curb or relocate the street trade have been met by violence.

The controversy surrounding street vending reflects the uncertainty many Zambians feel about the government’s rush to liberalize the economy. Critics see privatization as a dubious policy forced on them by Western donors. They say it has increased poverty and suffering, and they doubt its long-term benefits.

Compounding the economic anxiety is concern about the government’s commitment to democracy, especially in the face of an opposition pursuing a campaign of civil disobedience. Such behavior has threatened to damage this nation’s reputation as a bulwark of stability.

“Zambia is going through something it has never experienced before, not even during the colonial days,” said former Zambian President Kenneth Kaunda. “We used to be united--one Zambia, one nation. Now we are disunited.”

Kaunda led his country to independence in 1964 and held power for the next 27 years. In the country’s first multi-party elections, in 1991, Kaunda was defeated by Frederick Chiluba, the current president.

*

International donors seem ready to ignore the social and political discontent of this former British colony so long as it remains on the privatization track.

“The past system was simply detrimental to the development of Zambia,” said Ernest Mtamboh, an economist with Britain’s Commonwealth Development Corp., which has invested more than $160 million in Zambia since 1991, making this nation the agency’s most important African investment. “Privatization has brought in free enterprise. Everyone is trying to trade.”

Almost three decades of state monopoly played havoc with the economy of Zambia. The socialist-style system nurtured corporations that were overstaffed and under-managed. Output at state-owned Zambia Consolidated Copper Mines, long regarded as one of the country’s economic jewels, had fallen 50%. Farming was neglected, basic products were scarce, and lines began forming at stores for food.

“Within the system itself, there was corruption, mismanagement and chaos,” said Mark O’Donnell, chairman of the Zambian Assn. of Manufacturers. “People were just there for themselves. Privatization came in and smacked that on the head.”

Kaunda defends the policy of state domination he then called “humanism.”

“We built a strong base for growth,” he said, taking credit for building schools and providing free education; constructing hospitals; ensuring that Zambia’s main towns were served by at least a gravel road, and allowing people to keep a little money in their pocket--though there was hardly anything to buy.

In Kaunda’s view, the country’s economic troubles were born of Zambia’s political courage. Zambia’s support for the African liberation struggles in neighboring countries such as South Africa, Namibia, Zimbabwe and Mozambique cost it millions in development aid. Indeed, the once-exiled African National Congress, now South Africa’s ruling party, had its headquarters in Lusaka during the fight to end that country’s system of racial apartheid.

Though most Zambians languished in abject poverty then, many remain nostalgic for the Kaunda days.

At Misisi Compound, a crowded slum of concrete shacks on the outskirts of Lusaka, Kelvin Musole labors to support his wife, Rosemary, and sons--2-year-old Lloyd and 2-month-old Peter--by selling milk. On a good day, Musole, 26, makes the equivalent of $5.

“Things have changed,” said Musole, who moved to the slum three years ago after being laid off as a road worker. “We used to live better in the old days.”

*

The Musoles fetch water from a communal tap, use charcoal for cooking and light their shack with a homemade paraffin lamp. A pit latrine, dug in the nearby courtyard, is their bathroom.

Though Musole welcomes the wide variety of products available now in stores, he laments that he can only afford to window shop. Because education is no longer free, he doubts that his boys will ever attend school.

“People are prepared to sacrifice a little, but only if they can see . . . that it will be better tomorrow,” said Robby Makayi, a prominent Zambian journalist who now heads the independent Media Resource Center.

Moses Banda, an agricultural businessman, said: “Maybe the West is judging success in terms of the number of [state] companies that have been sold. For us, success should be in terms of quality of life.”

Zambian government officials are unapologetic, though.

“Yes, life is tough,” acknowledged Richard Sakala, Chiluba’s special assistant. “I don’t think the government made any promise that life would be easy. It is not easy to transform a devastated economy. But we cannot adopt a parochial attitude. We are part of the global economy.”

Sakala said the government plans further cutbacks, including reducing its own work force from 130,000 to 80,000. And he said Zambia would see the benefit of its privatization program when the new owners of those businesses begin making money. The privatization of Zambia’s copper holdings alone, for example, is expected to bring in investments of $2 billion.

However, the government’s economic promises are being overshadowed by signs that its commitment to democracy is flagging.

“Politically, we are in a mess,” said Makayi, the journalist. “[It’s] a state of chaos, bordering on anarchy, where there is no respect of the law, least of all by those in power.”

Kaunda and political activist Roger Chongwe were recently shot and injured in an attack that some here believe was inspired by government supporters. Government officials call the allegations absurd.

“Kaunda and Chongwe are very good at melodramatics,” said Sakala. “The whole thing is incredible.”

Not, say observers, when you look at the lengths to which the government has gone to try to keep Kaunda, now 73, out of the political arena.

*

Last year, Kaunda, the founding father of Zambia, was barred from running for the presidency because his parents had been Malawian immigrants. A new constitutional amendment restricted the presidency to candidates whose parents were born in Zambia. His United National Independence Party and six other opposition groups boycotted the elections and have launched a campaign to try to reverse the constitutional amendment.

Officials deny that the constitutional amendment was aimed at Kaunda and criticize the veteran statesman as being a sore loser who cannot accept that he is no longer Zambia’s head of state.

“Dr. Kaunda still lives in the culture of the colonial struggle, when we were still fighting the white man,” Sakala said. “That age and time has passed. Now politics depends on the strength of your argument and the strength of your persuasion on the issues.”

But the Zambian government has also been criticized for its alleged widespread corruption and its lack of tolerance for the independent press. A July report by Human Rights Watch/Africa noted that “the Chiluba administration has made a few begrudging, and mostly cosmetic efforts to improve its human rights record.”

Richard Sklar, a retired UCLA political science professor and specialist on Zambia, observed: “It’s a pity Chiluba is petty. His personal leadership has not measured up to the kind of stature that he promised. He has too much of a commitment to his own continuation in office.”

Critics say the government can afford to be arrogant and uncompromising because it does not fear punishment by the international community. Most of the foreign donors who cut off aid to protest irregularities in Chiluba’s election have since resumed their support.

The assistance, estimated at $140 million last year, is chiefly aimed at easing payments owed on this country’s $7-billion debt. The United States, though condemning the Kaunda shooting, gives $15 million in aid to Zambia.

As the outside money pours in, Kaunda and his backers continue their efforts to capitalize on the grievances of ordinary folk. But the level of their support is unclear, as are their future plans.

If Kaunda’s camp “doesn’t come up with a proper program of what they intend to do,” noted Pelekelo Liswaniso, editor of the state-owned Zambia Daily Mail, “they don’t stand a chance of being a viable opposition.”