[Peace-discuss] (50 Years) Wash Post: Scandal of SAPs in Zambia (fwd)

[Danielle Chynoweth]

- fwd -

Another excellent piece on the front page of the
Washington Post by Jon Jeter -- one every nine weeks, it
seems.  They may not be as frequent as we like, but who
else is dissecting the injustice of the global economy on
the front page of a major U.S. newspaper?

The Dumping Ground As Zambia Courts Western Markets, Used
Goods Arrive
at a Heavy Price

By Jon Jeter Washington Post Foreign Service Monday, April
22, 2002;
Page A01

LUSAKA, Zambia -- The flea market here is as dark and hazy
as an opium
den, its flimsy tin roof turning back the midday sun as
Edward Mansa
robotically unbundles the shipment of secondhand clothes
that has just
arrived.

The dull, red DKNY T-shirt catches his eye. "This," he
says admiringly
as he holds the shirt up to the dim light, "is not bad."
He says he
can probably get a dollar for it.

The shapeless plaid skirt is another matter, however, as
is the dowdy,
ruffled blouse and the banana-yellow sport coat that
causes Mansa to
shudder. He'll be lucky to get anything for them, and
chances are
Mansa will trade them with other vendors for some cooking
oil or dried
fish. "You can't afford to let anything go to waste," he
says.

Mansa provides for his wife, mother and baby daughter with
the little
money he earns selling hand-me-downs, the old and unwanted
clothes
that Canadians, Europeans and Americans donate to groups
such as the
Salvation Army or Goodwill. With more donations than they
can use, the
charities unload their surplus on wholesalers who buy the
clothing in
the West for a few pennies a pound, then ship it here and
sell bales
of it to Mansa and other street retailers at a markup of
300 percent
to 400 percent.

As Mansa peels an oversize Orlando Magic basketball jersey
from one
such bale, his eyes brighten. Even with its curious red
smudges and
loose threads, the jersey can go for as much as $3.

"This is a gem," he says. "The young people really love
the clothes
they see the American rappers and the athletes wearing,
but everyone
-- young and old -- buys their clothes secondhand in
Zambia. It is
better-made than what our own clothing industry used to
make before
they all closed down, and it's certainly cheaper since
it's used
clothing. But is this the way to develop your economy? I
don't think
so."

This southern African country once had a thriving clothing
industry.
But when government officials began opening Zambia's
economy to
foreign trade 10 years ago in exchange for loans from
international
donors, tons of cheap, secondhand clothing began to pour
into the
country, virtually duty free.

Not especially efficient, Zambia's textile factories were
overmatched
by the wholesalers, who could deliver affordable, passable
clothing
without paying production or labor costs or the tariffs
that once
protected local manufacturers from foreign competition.

So, Zambia's clothing industry all but vanished. Within
eight years,
about 30,000 jobs disappeared, replaced by a loose but
crowded network
of roadside and flea-market vendors beckoning shoppers to
"rummage
through the pile," or salaula in the language of Zambia's
Bemba tribe.

The expansion of global trade following the end of the
Cold War has
transformed Africa into a dumping ground for what the
industrialized
world no longer needs or wants, a deluge of secondhand
clothes, used
cars, old furniture and tools and weapons.

The used clothing shipped to sub-Saharan Africa by the
United States
accounts for nearly $60 million in sales annually. The
bales of old
clothing that appear on Africa's doorstep are now so
familiar entirely
new idioms have been developed. Partly in derision, and
partly because
many Africans once assumed the clothing belonged to the
recently
deceased, Ghanaians refer to the imports as "dead white
man's
clothing." Tanzanians dubbed the garments "dyed in
America," and in
Zambia the used-clothing stands are called "bend-down
boutiques."

"You can walk for miles at a time here and not see anyone
wearing
anything remotely resembling African clothing," said
Howard Gatchell,
chairman of the Chamber of Commerce in Zambia's second
city, Ndola.

Hoping to undo the damage from decades of colonial rule,
and the
ruinous civil wars and socialist economies that often
followed, nearly
40 countries south of the Sahara have over the past two
decades
adopted the free-market reforms -- "structural adjustment
programs" in
development jargon -- prescribed by such lenders as the
World Bank and
International Monetary Fund. But in the generation since
independence,
sub-Saharan Africa has never been so poor.

The region accounts for only 2 percent of all
international trade, a
share no greater than it was 20 years ago. New
international trade
rules developed in the 1990s have since increased world
income by
nearly $510 billion, according to the World Trade
Organization; the
World Bank reports that per capita income in sub-Saharan
Africa has
continued to fall over the same period.

Why does the poorest continent continue to get poorer,
even as the
rest of the developing world shows at least tentative
signs of
economic expansion?

The disintegration of Zambia's textiles industry provides
some
answers.

Since Zambia's leaders embraced free-market policies in
the 1990s, the
country's manufacturing base has been eviscerated, leaving
the
government buried in more debt than it can repay and
gradually
replacing a full-time workforce with a growing informal
economy that
offers low wages, no benefits and no job security.

World Bank officials acknowledge that the collapse of
Zambia's textile
industry is an unintended and regrettable consequence of
the
free-market policies promoted by the organization. And
since 1999, the
bank has been working with Zambia and other countries to
integrate
"poverty reduction strategies" with their traditional
approach.

"International trade is always evolving," said a World
Bank spokesman,
Raymond Toye. "And there are all kinds of constraints to
doing
business in Africa that maybe we haven't always accounted
for. We want
freer and more open trade in Zambia, but the question is:
How do we do
that in a way that recognizes and accommodates Zambia's --
Africa's --
unique history and situation?"

To be sure, war and graft play a role in the inability of
Zambia, a
landlocked country of 10 million people, and many of its
neighbors to
capitalize on the trade-offs implicit in global trade. But
much of the
problem lies in the economies of sub-Saharan Africa.
Relative to those
of the developed world, they are still in their infancy,
too fragile
to withstand foreign competition for their own turf, too
underdeveloped to produce much of anything the West
values, beyond the
raw materials that attracted colonial powers but are worth
increasingly less on the world market today.

"We've made the mistake of confusing the free market with
development," said Fred M'membe, executive editor of the
Post,
Zambia's only independent daily newspaper.

"I'm not saying we should isolate ourselves from the world
the way we
once did, but we are not looking at how to develop our
country. We are
looking at how we can market our country to outsiders so
they can come
develop it for us. We are getting back to the same
colonial equation
where, in the land of our birth, Africans own nothing,
control
nothing, run nothing. We are soon to be aliens in our own
country."

Zambia surfaced from 75 years of British commercial and
colonial rule
in 1964, inheriting a workforce with fewer than 110
college graduates
and an economy dependent almost solely on mining. Copper,
cobalt and
zinc accounted for more than a third of the country's
gross domestic
product at independence and 80 percent of its export
earnings. The
mines employed -- in one capacity or another -- almost
half the
workforce. At the same time, there were no large-scale
textile
producers in the country.

Using the state as the economy's engine, the "humanist"
government of
Kenneth Kaunda, then Zambia's president, nationalized the
mines,
expanded the economy's manufacturing and 'agricultural
sectors and
walled them off from foreign competition with import
tariffs. To
improve the productivity and skill level of its workforce,
the
government provided free health care and primary
education.

Literacy levels rose. The economy grew. Within six years
of Zambia's
independence, nearly 85 textile manufacturers employed
more than
10,000 workers.

Then the bottom fell out. Copper prices plummeted just as
world oil
prices climbed, and Kaunda turned to the donor community
in 1973.

"We had refused to borrow, but now we had no choice,"
Kaunda said in
an interview. "I approached both the IMF and the World
Bank and said:
Look, we are in this precarious situation. 'Can we borrow?
Their reply
was, well, we think that copper prices will soon rise
again, so please
feel free to borrow."

He did, but copper prices continued to plunge.

Weary of the skyrocketing inflation and chronic food and
fuel
shortages caused largely by Kaunda's big-government
approach, voters
in 1991 replaced him with Frederick Chiluba, a union
leader whose
Movement for Multiparty Democracy promised political and
macroeconomic
reform. What followed was the continent's -- perhaps the
world's --
most dramatic and speedy transition from a command economy
to the free
market. Virtually overnight, the Chiluba government
eliminated
subsidies to farmers, slashed tariffs on imports, loosened
the state's
grip on monetary policy and began to charge "user fees"
for public
schools and clinics.

By 2000, Zambia had sold more than 300 state-owned
enterprises to
private investors, including virtually all of the
state-owned mines.
The restructuring reduced inflation, stabilized spending
and increased
cash reserves. But illiteracy and school dropout rates
increased.
Zambia's debt has reached $6.6 billion, and the annual
payment on the
debt is three times what the government spends on primary
education.

Zambia's factories have shed roughly 325,000 of 800,000
manufacturing
jobs since 1990, according to government figures. Chiluba
inherited an
economy that included more than 140 textile manufacturing
firms when
he took office in 1991. When he left office in January
after his
second term, the industry had been whittled to fewer than
eight. About
30,000 of the industry's 34,000 jobs disappeared,
according to the
Zambia Association of Manufacturers.

"The pay was not much," said Millie Mansa, Edward's
mother. A
56-year-old widow, she worked at several textile factories
in Ndola
and Lusaka until she lost her job five years ago. "But
even after my
husband died, I could put food on the table. We were not
rich, but we
did not suffer."

Now, she said, "it pains me to see my son go to work every
morning
selling these secondhand clothes for sometimes [a few
pennies] a day.
Zambia has given up so much to globalization."

Used clothing began to arrive here almost immediately
after the
government repealed import taxes in 1992. With no duties
charged for
used clothes -- customs officials listed their value at
zero --
wholesalers realized they could create a new market
without paying
much more than freight costs.

"We started buying secondhand clothes by the truckloads
from America
and Canada and Europe," said Jim Ebrahim, managing
director of Central
African Traders Ltd. Working with a Canadian cousin, he
ships a
truckload of secondhand apparel into Zambia, Congo and
Tanzania at
least once a week.

"We pay $35,000 for each container," he said. "When we
first started
six years ago, we would clear about $6,000 profit for each
shipment.
But now there is so much competition that we only clear
about $2,000
profit on each container."

Zambia's textile producers simply could not compete with
the influx of
Western clothes. Even used, most of the clothes were made
with
superior machinery and cheap cotton subsidized by Western
governments.

"It was stylish. It was cheap. It was better-made," said
Mark
O'Donnel, chairman of the Zambia Association of
Manufacturers. "Our
industry didn't have a chance. We would have preferred for
the changes
to be phased in to allow our textile industry a chance to
catch up to
the rest of the world and really compete."

"It's not just clothing," said Ramesh Patel, director of
SWAPP Ltd.
Clothing in Ndola, the heart of Zambia's struggling
Copperbelt region.
"We used to have factories everywhere, but Ndola is a
ghost town now.
We are one of the lucky ones who have managed to survive,
but there's
no comparison. We used to supply retailers with 3.5
thousand tons of
clothing annually; we're down to less than 500 tons now.
We had 250
employees eight years ago; we're down to 25 now."

Millie Mansa was one of the workers to lose her job at
SWAPP. Unable
to support herself, she moved in with her son and his
young family.

Like eight of every 10 Zambians, the family survives on
less than $1 a
day. Roughly once every six weeks, Edward Mansa and his
business
partner, John Sakala, buy a bale of used clothing for
$180. With a
good bale, they earn about $240, splitting the profits
evenly and
reinvesting the remainder in another bale.

"The key is to get a good bale," Mansa said. "Some
wholesalers will
let you inspect the bale first; others won't. We have
found that
inspecting beforehand to make sure that you have quality
clothes is
the most important aspect in this business."

Millie Mansa has no romantic illusions about Zambia's
socialist past,
but the distinction she makes between the past and present
is one
repeated across the continent by those old enough to
remember.

"Back in the Kaunda era, there was nothing on the shelves
but
everybody had a little money in their pocket," she said as
she sat
cross-legged in the family's darkened hut on the outskirts
of Lusaka.
"Now the shelves are always full and we have things that
we never
before had in Zambia. But no one has any money to buy
anything."

Many liberal economists and development experts point to
the shrinkage
of Zambia's textile industry as evidence of the failure of
the
"Washington Consensus," the U.S.-driven policy to spur
economic growth
in the developing world through exports. Development leads
to expanded
trade, not the other way around, they say.

"Zambia probably has the most liberalized economy in the
world," said
Lebogang Motlana, the U.N. Development Project's deputy
representative
here. "But 30 years into our liberation, we don't have the
variety of
industries to penetrate other markets, and we were
ill-equipped for
such a competitive mode. Maybe the government should have
done more to
care for the people and develop industries other than
mining, rather
than devoting so much of its resources and energy to free
trade."

President Levy Mwanawasa, Chiluba's successor, has pledged
to adjust
Zambia's one-size-fits-all macroeconomic approach. His
party -- the
same Movement for Multiparty Democracy that turned to free
trade a
decade ago -- has introduced legislation to eliminate user
fees, lower
costs for government medical care, restore agricultural
subsidies and
nourish industries that have the potential for growth.

Mwanawasa has named his administration's economic program
"The New
Deal."

© 2002 The Washington Post Company



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