IMF IS NOT A SOLUTION SAYS FDD SPOKES PERSON ANTONIO MWANZA

The IMF is expected in the country this week to discuss the possibility and conditions of giving Zambia a financial package owing to the economic conundrum we are in.

In order to receive a loan from IMF, a country must agree to the IMF's CONDITIONALITIES and make general commitments to cooperate with IMF in setting policies to the formulation of specific, quantifiable plans for financial policies.

The conditionalities imposed by IMF include a drastic shift in the fundamental domestic and external policies that, depending on the intentions of IMF, can effectively control a state's crucial social and economic priorities. The standard IMF conditionalities include:
1. Deregulating of the economy
2.Privatising of state-owned enterprises
3.Removal of subsidies, including on essentials such as food, fuel, agro inputs, electricity etcetera
4. Imposing of consumption taxes
5. Cutting down of Government spending on key sectors of the economy such as health, agriculture, education, energy, etcetera.
6. Raising of interest rates as well as
7. Reducing price subsidies on essentials such as food

Statistics have shown that the majority of the countries, Zambia inclusive, that have accepted IMF prescriptions and/or advice have experienced profound economic disasters which include low or even declining growth; higher foreign debt and general economic stagnation that perpetuates systemic poverty. The IMF's own studies have revealed a devastating assessment of the social and economic consequences of its guidance of poor nations.

The emerging IMF data only confirms that IMF's Structural Adjustment Programs have eroded existing social services and have Infact aggravated the poverty and suffering of hundreds of millions globally.

In summary, the IMF has created an immoral system of modern day colonialism whose goal is to serve the interests of the multinational corporations at the expense of third world countries.

The IMF's Structural Adjustment Programs ensure debt repayments (to the multinationals) by forcing poor countries to cut down spending on key sectors of the economy such as health, education and so forth which are actually key to sustainable development. Further IMF usually demand the devaluation of the local currency to make exports cheaper for the multinationals at the expense of poor countries. They demand privatisation of state assets which the multinationals buy at cheaper price and demoralise the local workforce by demanding wage freezes to the detriment of the recipient countries.

Crucially, the IMF often forces recipient countries to eliminate assistance to domestic industries while providing benefits to multinational corporations making it impossible for the local industries especially the small and medium scale businesses to favourably compete on the market.

Government should carefully scrutinise and interrogate the prescriptions IMF will demand and make a conscious decision whether to accept or deny the financial package IMF is offering.