From Africa Online News: http://www.afrol.com/articles/14832

"Zambia not hindered from hiring teachers," IMF

afrol News, 18 November - The International Monetary Fund (IMF)
today answered the widespread criticism regarding its Zambia policies.
A new report concludes that 8,000 to 9,000 newly qualified teachers
in Zambia could not be hired due to "IMF policies". The Fund however
maintains it had never "prohibited the Zambian government from hiring
new teachers."

A recent paper released by the Global Campaign for Education states
that 8,000 to 9,000 newly qualified teachers in Zambia have not been
hired. The paper, entitled 'Undervaluing teachers - IMF policies
squeeze Zambia's education system', concludes that this situation is
a consequence of instructions from the IMF to the Zambian
government.

- It is regrettable that the paper's discussion of developments in Zambia
contains so many inaccuracies and misconceptions, today says IMF
Director of External Relations, Thomas Dawson, in an open letter to
the Global Campaign for Education.

The case of Zambia has often been used as an example of the IMF's
failures in the fight against poverty. After decades of "structural reforms",
closely following the IMF recipe, poverty has only increased in Zambia
and the social sectors have been decimated. A freezing of the government's
wage bill and in hiring, allegedly following IMF instructions, this year
caused new criticism against IMF policies in Zambia.

According to Mr Dawson, however, this was not the case. "The
performance of the Zambian economy has improved considerably
in recent years," the IMF official maintains. Economic growth has
averaged more than 4 percent per year since 2000, he explains,
although admitting that growth needed to be "stronger and sustained
over a longer period" to have an effect on poverty in Zambia.

Mr Dawson claims that the comprehensive domestic debt accumulated
to finance the budget deficit over the last years now has become the
most serious threat to Zambia's economy. One of the main reasons
for this borrowing had been the government wage bill, which rose
sharply from 5.3 percent of GDP in 2000 to 8 percent of GDP in
2002, due to "large wage increases," according to the IMF.

- In April 2003, government wages were raised substantially and
a new housing allowance was introduced, the IMF official says.
"These measures were not part of the budget approved by Parliament,
and were not otherwise sanctioned by Parliament. Moreover, the
increase in the wage bill was again to come from higher wages and
benefits rather than from the hiring of more teachers or other priority
employees," he adds.

In July 2003, the IMF and the government of Zambia thus agreed that
payment of this large wage bill and related allowances "would have
jeopardised the recovery" of the national economy. The increased wage
bill could neither be financed through cuts elsewhere in the budget, by
"printing money" nor through additional government borrowing, it was
established in the talks.

Consequently, the IMF officials claim, the government agreed to take
steps to "contain the growth in civil service compensation in 2003 and
set the basis for returning the wage bill to a more manageable level in
2004." Negotiations between the government and the disappointed
trade unions were started.

As a result, "some ministries found that their budget allocations did
not allow for recruitment of new staff during the year," Mr Dawson
goes on explaining. "Also, the savings from the removal of some
4,000 employees from the payroll during the year were not used
to hire more priority staff, such as teachers and health care providers,
but to hire more employees in the central administration."

While the IMF official holds the Zambian government is to blame
for only hiring administration employees, he raises a second argument
outside the control of the IMF: "There are over 7,000 teachers
ready to leave the service on retirement but not able to do so
because the government cannot afford to pay their termination
benefits. These teachers have therefore remained on the payroll,
receiving their salaries but not working."

According to Mr Dawson, this is the greatest problem regarding the
criticised failure in teachers' recruitment. The IMF and Zambia's
development partners were however working to find ways to resolve
this problem, he said. "The government of the Netherlands is this year
providing a grant of nearly Kwacha 50 billion (US$ 10 million) to cover
unpaid termination benefits to allow 7,000 teachers to leave the service
and to allow replacements to be hired."

- The economic programmes that the IMF has supported in Zambia ...
have not included limits on government hiring in health or education, Mr
Dawson emphasised. Teachers, doctors, and nurses had been specifically
excluded from the freeze on civil service hiring in a Zambian government
document of 2002, and IMF programmes this year did not include a freeze
on hiring in the public sector at all, he added.

It remains to be seen whether the Zambian government agrees to the version
of the IMF as it struggles with impatient trade unions over the national wage
bill. In Zambia, word is that the government has only a very limited influence
over its own budget after sticking to IMF programmes.

By staff writers