PRO-POOR POLICIES FOR ZAMBIA

Transcription

1 JCTR & CSPR SUBMISSION TO CSO/PF DIALOGUE 12 th April 2012 PRO-POOR POLICIES FOR ZAMBIA REVIEWING PRO-POOR POLICIES IN LIGHT OF SNDP PRIORITIES By Munyongo Lumba & Mwila Mulumbi 1

2 PRO-POOR DEVELOPMENT Literature on development points to the fact that pro-poor generally refers to direct targeting of the poor. More generally, it s about reducing poverty. According to the Civil Society Partnership Programme the aim of pro-poor policies is to improve the assets and capabilities of the poor. By this very definition, we pick out that it s about allowing poor people to be directly involved in policy processes. Evidently, when you analyze this definition, we should be looking to policies of empowerment, however we understand this word. To some empowerment is about the process of participation in decision making; to others is about the ability and entitlement to make decisions and consequently about gaining power and control over the decisions and resources that control the quality of a person s life. Yet still to others it s about marginalized groups such as women and youth and increasing their awareness of unequal power relations, gaining a voice and taking control of their lives. To a third set, it s about changing political institutions and structures by initiating change from within - change in government via civil society with external institutions merely being the facilitators. Features of pro-poor policy processes 1. Policy processes that align with national priorities in terms of budgeting; Policies that speak to the resource envelope budget is a demonstration of a pro-poor budget with 50% allocation to crucial social sectors such as health, education, water and sanitation. We however note a caveat on the agriculture policy which is one of the 4 core focus areas in the PF manifesto and thus a priority but does not resonate with the Maputo declaration of committing 10% of the national budget to this sector; 2. Policy processes that are guided by local research and context and that take forward anecdotal perceptions and views building them into an evidence-base. We need to invest in furthering our understanding of the local context from a research perspective, and proposing recommendations that sit our local context. We cannot continue to look to the outside for expertise when we have learned or highly educated Zambians and credible institutions that can enrich our development process. Therefore we are looking to policy processes that build on the competencies and comparative advantage of different institutions such as the academia and other research entities. 3. We require pro-poor processes that align policy with action plan and monitoring and evaluation frameworks. This is the only way we can ensure that the ideas in the policies are implemented in specified time frames, that the resources required are availed and requested for collectively rather than by specific institutions whose priorities may change depending on the resources availed.

3 4. We require policy processes that are well articulated as evidenced by coherent strategies. Policies addressing specific issues must speak to one another. Cite a specific example of the employment generating policies which are well intended but in the absence of a coherent national strategy, you realise that we are unable to document the good practices or successes of one policy against the next; 5. We require policies that form a sound basis for planning and execution of public resources, which would provide solutions to Zambia s long term economic challenges. WHAT THEN DO WE KNOW, WHAT DO WE NOT KNOW AND WHAT SHOULD WE KNOW ABOUT ADDRESSING THE SOCIO-ECONOMIC ASPECTS OF THE ECONOMY? We are all well aware that there can never be any lasting or substantial poverty reduction without economic growth and at the same time, economic growth alone cannot reduce poverty. Economic growth is a necessary condition for poverty reduction but by itself it is not sufficient to significantly make a positive dent on the high poverty level the country is experiencing at the moment. It is important to sustain the economic gains of the last decade in order to reduce poverty. This means more needs to be done. It is not for want of good policies, programmes and plans. We already have the means through national planning frameworks such as the Sixth National Development Plan (SNDP) and lessons can be drawn from past national development plans. 1. Foreign Direct Investment, FDI, - Continued macroeconomic stability will create a conducive environment for continued investment, whether external or internal. This country needs significant capital injection for poverty to be reduced. Between 2006 and 2010, there was massive injection of capital in the country and yet poverty during the same period only declined by 2.3 percentage points according to the Central Statistical Office Living Conditions Monitoring Survey, This just goes to show how much capital injection this country needs. We can therefore not afford to disrupt any parameters on which capital flows depend. A stable macroeconomic environment is therefore crucial to investment. 2. Interest rate even though interest rates have been high, they have taken a downward trend which should be encouraged. Everything possible must be done to persuade banks to reduce interest rates. The reduction in tax rate from 40% to 35% announced in the 2012 budget is a positive move as it is expected to result in lower interest rate and should therefore be commended.

4 3. Government should however reduce its borrowing from banks as this will be counterproductive to the efforts of reducing interest rates. Government borrowing from banks only works to crowd out private borrowing and investment as it pushes up interest rates beyond profitable levels for private investment. Lower lending interest rate will enable poor people access loans and invest thereby create jobs for themselves. 4. Inflation this is another parameter of macroeconomic stability which must be kept as low as possible. High inflation has a tendency of discouraging investment in the country as it erodes the value of investment and thus investor confidence. The previous regime brought down inflation to single digit after a long time and therefore this should not be reversed. Government should keep its expenditure in check by not spending outside the budget which may result in serious budget deficit and consequently trigger an upsurge in inflation. Fiscal discipline from government will be indispensable if inflation has to be kept in check. Fiscal discipline can only be achieved by sticking to the budget. Government has five years to execute its manifesto and therefore should not crowd all its activities that have huge budgetary implications in 2012 such as currency rebasing, constitutional making, creation of new districts and realigning of ministries should be systematically done. 5. Exchange rate the Kwacha has been unstable in the last few months against major foreign currencies. Zambia being a largely importing country, depreciation of the Kwacha is never good news as it results in increased cost of production as most production inputs are imported. This will ultimately push up inflation which is not good for both consumers and investors. 6. Gross Domestic Product GDP has been growing at an average of 6% in the last five years. The level of growth rate must be maintained and diversified. Much of this growth is rising from the mining sector. It will be difficult in the long run to sustain this growth if the economy is not diversified. Whilst other sectors like agriculture, tourism etc have been identified as priority sectors, there is need to focus on manufacturing as well. Until we start adding value to our natural resources, we will not sustainably develop our country. The growth must also be broad based so as to create jobs. What are the pro-poor policies that should take priority from the SNDP? Pro-poor policies can effectively be achieved if they are well integrated in a practical way in national planning frameworks like the SNDP. The theme of the SNDP is Sustained economic growth and poverty reduction. In line with this theme, the SNDP focuses on policies, strategies, and programmes that will contribute significantly to addressing the challenges of realising broad based pro-poor growth, employment creation and human development. thus, the strategic focus of the SNDP is Infrastructure and human development, that it, the plan will

5 therefore promote increase rural investment in infrastructure such as roads, rail information and communication technology, energy, water and sanitation, education and health. The focus is guided by the principles of accountability, decentralization and efficient resource allocation. The objectives of the SNDP are to: Accelerate infrastructure development Economic growth and diversification Promote rural investment Accelerate poverty reduction and enhance human development. Though the SNDP highlights areas of focus in realising pro-poor growth, there is need to achieve consensus on key pro-poor policies in light of the priorities identified in the SNDP and those stated by the PF government. We realise that at the core o the PF government s strategy for pro-poor development are the areas of education, health services, agriculture and local government and housing development. But the question we would like to address today is whether these areas of focus offer pro-poor pathways to realising broader pro-poor growth? Though the core areas of focus of the PF government in promoting pro-poor growth are key, they have not been backed with deliberate participatory planning and proposer targeting of pro-poor programmes to guarantee meaningful impact on the poor people of Zambia. At this point we implore the PF government to: Put in place systems that enable people to be directly involved in policy processes such as decentralization Put people particularly the poor at the centre o the implementation process for poverty reduction. THANK YOU