The Impact of Structural Adjustment Programmes on Zimbabwe’s Public Health Sector

TABLE OF CONTENTS

Acknowledgements

Abstract

I. INTRODUCTION

II. LITERATURE REVIEW

III. BACKGROUND SITUATION
A. Demography
B. Politics
C. Economics

IV. PRE-SAPS SITUATION OF HEALTH DELIVERY SYSTEM
A. Socialism and the situation of Public Health Delivery
B. Health Policies Adopted during the Pre-SAPs Period
C. The Free Health for All Policy

V. INTRODUCTION OF SAPs AND RESULTANT IMPACT
A. Introduction of SAPs and their Impact on Poverty
B. Changes Instituted by SAPs and their Impact
1. Economic Liberalization- Free Market and Competition
2. Reducing Public Health Grant
3. Cost Recovery Systems
4. Reducing Public Sector Employees
5. Reaction of Population Towards Implementation of SAPs

VIII. THE GENDERED DIMENSIONS OF THE IMPACT OF SAPS ON ZIMBABWE’S PUBLIC HEALTH SECTOR

IX. CONCLUSION AND RECOMMENDATIONS

References

Abstract in Korean

LIST OF FIGURES

1. Effects of SAPs on Zimbabwe’s Public Health Sector

2. Annual Expenditure Per HIV Infected Person

3. Incidences of Poverty in Zimbabwe

4. Trends in Zimbabwe, Rwanda and Sierra Leone’s HDI

5. Health Expenditure per Capita

6. Infant Mortality, Child Mortality and Life Expectancy Rates in Zimbabwe

7. Medicare Price Index

8. Employment Patterns of Health Personnel

9. Expanded Women’s Roles

10. Maternal Mortality Trends in Zimbabwe, Zambia and Tanzania

LIST OF TABLES

1. Health Indicators in Zimbabwe’s First Decade

2. Annual Earnings per Employee in Zimbabwe’s Public Health Sector

3. Health Professionals Employed in Zimbabwe’s Public Health Sector

ACKNOWLEDGEMENTS

It is my pleasure to express my sincere gratitude to Professor Thomas Kalinowski, my advisory professor for his constructive guidance throughout the course of writing this thesis. His collaborative effects, encouragement and genuine professional advice have immensely contributed to a successful completion of this thesis. Indeed he motivated and inspired me to complete this piece of work. I would also like to recognize the vital contributions of the Globalization and Development as well as the International Political Economy courses, which contributed great insights towards this thesis, in which Professor Kalinowski was the Instructor.

I would also like to express my appreciation to Professor Eun Mie Lim, Professor Jeniffer S. Oh and Professor Kim Jiyoung for their encouragement and contributions. Their advice and suggestions benefited me greatly. I thank them for offering their time to answering my questions and advising me. Many thanks also go to all the Professors of GSIS.

To my husband and the love of my life Takaindisa, I deeply appreciate his support and genuine motivation during the period of my study at Ewha Woman’s University. In addition, I thank my friends Nujahan Khanom and Ebtesam Ali Garallah for helping me to edit and correct grammatical and spelling errors. This work is dedicated to my loving parents Enock and Maud Muvunzi. I thank them for their support and for inspiring me.

ABSTRACT

Structural Adjustment Programmes of the IMF (IMF) and World Bank (WB) were implemented as part of aid conditionality in Africa and Latin America since the 1980s. There is a wide range of literature critical of SAPs. Several debates have focused on whether the failure of SAPs was a result of the inherent weaknesses of the IMF/ WB sponsored structural adjustment or whether it was caused by structural failures of policy implementation within the African continent. The author uses the Zimbabwean case to analyze the impact of SAPs on social service sectors, particularly the public health sector.

This paper provides a case where the Zimbabwean health sector demonstrated significant progress in public health delivery, and showed prospects of further improvements before the implementation of structural adjustment between 1990 and 2000. In this thesis I show that cost recovery systems and reduced public expenditure on health led to rising costs of health services and increased inequalities in health service provision. It also resulted in the abandonment of critical public health programmes and consequently contributed to poor funding for health infrastructure, maintenance, drugs and equipments. Furthermore, retrenchments in the public health sector robbed it of critical and well qualified staff and exacerbated brain drain. SAPs were implemented amid public protests and demonstrations by the general public and organized interest groupsThis is not only because they brought negative impacts on livelihoods but also because there were little consultations between the government and civil society prior to their implementation.

This paper also illustrates that, to a larger extend SAPs increased women’s care burden and worsened their health situation. Household food consumption and family health needs are responsibilities bestowed upon women in Zimbabwe’s patriarchal society. Therefore, user fees and reduction of public health expenditure increased pressure on women to take care of the sick who could not afford medical fees. Furthermore, rising costs of maternal health, reduction of funds for preventive programmes and declines in public health staff had negative economic, psychological and health impacts on women.

I. INTRODUCTION

Structural Adjustment Programmes (SAPs) were implemented in over forty countries in Africa for two decades (1980 to 2000) (World Bank 2006). SAPs were designed by the Bretton Woods Institutions as a form of aid conditionality (Rono 2002). SAPs generally required countries to adopt policies such as reduction in government spending, monetary tightening, elimination of government subsidies, privatization of state enterprises and reductions in the barriers to trade and foreign investment (Jaunch 1999). Structural adjustment was therefore comprised of a set of policies designed to replace state led economic interventionism with market-based mechanisms whilst simultaneously seeking to correct the imbalances between national income and spending (Olukoshi 2000).

SAPs were born out of the need by the Northern governments to aid developing countries out of a debt crisis that hit mostly Africa since 1980, following increases in oil prices in the 1970s (World Bank 2006). Thus, most African countries were in economic crises when they adopted SAPs. A study of SAPs in Mozambique by Hanlon (1994), Lugalla’s (1996) research on the implementation of SAPs in Tanzania, Jaunch’s (1999) analysis of SAPs in Uganda and Namibia to mention a few, all attest to the fact that these countries were in economic crises exhibited by high external debt burden, negative GDP growth rates, increasing poverty and declining exports.

This paper analyzes the case of Zimbabwe which implemented SAPs from 1990 to 2000. Zimbabwe was not in a state of economic crises when SAPs were adopted (World Bank 2004:30; Dashwood, 1996:3). Rather, the economy was growing at an average GDP growth rate of 3.3% in the first decade of independence, incidences of absolute poverty had declined from 75% in 1985 to 40.4% in 1989 and incidences of extreme poverty also declined from 31.3% to 16.7% during the same period (Zimbabwe Statistical Office 1999). The implementation of SAPs was pushed therefore, by the need to accelerate the process of economic development (for instance, to achieve a higher GDP growth rate) and to meet the social needs of a growing population (World Bank 2004:30; Dashwood 1996:3).

Though SAPs were adopted partly as a requirement for receiving external financial aid, the government of Zimbabwe willingly, consistently and persistently implemented them (according to T. Davies of World bank in an interview; Jenkins and Night 2001). This paper focuses on the impact of SAPs on Zimbabwe’s public health sector by answering two questions. Firstly, the major question is: what explains the failures of SAPs in Zimbabwe’s public health sector? Thus, the paper endeavors to compare the situation in Zimbabwe’s public health sector before, during and in some cases after the implementation of structural adjustment measures. Secondly, what was the impact of the implementation of SAPs in the public health sector on Zimbabwean women?

A profile of Zimbabwe’s health sector shows that before the implementation of SAPs (1980 to 1990), Zimbabwe’s public health sector performance was reasonable. Based on its socialist driven ideology at independence (1980), the government embarked on designing programmes and policies targeting at expanding health care to the majority of the black population. Examples include the free health for all policy, rehabilitating and expanding rural health centers (which increased by 58% from 1980 to 1985 according to Dashwood 1996:36), Zimbabwe Expanded Programme on Immunization (1981), declaration of diarrheal disease control as a national priority in 1982, Children’s Supplementary Feeding Programme, National Village Health Worker Programme (1981), Traditional Midwives Programme (1981) and the Zimbabwe National Family Planning Programme (1981) among other programmes and policies. Reasonable progress was thus achieved in major health indicators as shown below:

TABLE 1: HEALTH INDICATORS IN ZIMBABWE’S FIRST DECADE

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Source: World Bank Statistics

The adoption of SAPs in 1990 presented a change in public health policies. Streamlining of public sector employees, privatization, user fees and reduction of the public health grant were rolled in as driving forces of SAPs. This paper shows that each of these four components of SAPs impacted negatively on the public health sector as illustrated by the diagram below.

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FIGURE 1: Effects of SAPs on Zimbabwe’s Public Health Sector

This paper therefore articulates how cuts in public health grant led to a reduction of subsidies, decline in drug budget, reduced maintenance, reduction of salaries and incentives for health personnel as well as cuts in expenditure for public health programmes. It also shows how cost recovery led to lack of affordability and accessibility of health by the poor, high medical costs, increased circulation of unprescribed drugs and brain drain. Furthermore, the reduction of public sector employees led to increased migration, lack of health staff, increased number of unregistered practitioners and loss of qualified personnel. This paper also demonstrates how privatization was associated with lack of incentives for private hospitals to operate in remote areas, how it resulted in inequalities caused by the majority poor continuously relying on public health while the rich could access affluent private clinics and how it led to abandonment of crucial public health programmes.

Consequently, significant declines were made in major indicators of health and Zimbabwe failed to maintain the progress it had made in the first decade of independence. Maternal Mortality increased from 238 per 100 000 deaths in 1994 to 1068 in 2002, infant mortality increased from 54 per 1,000 live births in 1990 to 62.25 in 2000 while child mortality rose from 23 per 1,000 live births in 1990 to 36 in 2000 just to mention a few health indicators.

This paper further illustrates the gender dimensions of the implementation of SAPs in Zimbabwe’s public health sector by assessing their effects on women. The prevailing gender divisions of labor in Zimbabwe’s patriarchal society gives women responsibilities over child care and household management, particularly food provision and bestows upon them major responsibilities in health care at household level. Reductions of public health personnel, cuts in public expenditure and institutionalization of cost recovery which resulted as part of the implementation of SAPs tended to increase the care roles of women as they were expected to take care of the sick family and community members. Women’s health situation was also affected given the lack of preventive programmes to educate them on critical health issues like breast and cervical cancer as well as inaccessibility of maternal care caused by increased costs among other issues.

In this paper I also elaborate how the public reacted to the adoption of SAPs, particularly in the health sector. I try to explain that though the government was eager to implement SAPs, the general population, organized interest groups and civil society showed their bitterness against their implementation through public protests and demonstrations.

The effects of SAPs on Zimbabwe’s public health sector shall be analyzed using mainly secondary data and relies heavily on qualitative research. The available archival secondary data are collected from the databases of authoritative government departments, published academic journals, media articles, World Bank, World Health Organization and Zimbabwe Central Statistical Office. Interviews were also held with a world bank expert based in Zimbabwe (Mr. T. Davies) and the former Zimbabwean Deputy Minister for Health and Child Welfare (1985-1992). However, the views of the World Bank and IMF regarding the implementation of SAPs in Zimbabwe’s public health sector were not explored due to lack of detailed publications. This might be an area that needs further research in future studies.

The paper has been systematically divided into chapters and corresponding sections. In the following chapter relevant literature on SAPs is analyzed. The third chapter provides background information of Zimbabwe. In the fourth chapter, the health situation during the pre-SAPs era is provided, articulating the major policy framework that existed as well as describing the trends in health indicators. The fifth chapter looks at the introduction of SAPs and the resultant impact on the public health sector. It also provides an assessment of poverty trends in recognition of the fact that good health is not only a function of good health care facilities, but poverty levels are also vital in influencing health conditions. An assessment of the reaction of the people towards the implementation of SAPs in the health sector is also made. The sixth chapter analyses the gender dimensions of the implementation of SAPs in the health sector. The final chapter summarizes the main central points of the thesis and provides policy recommendations for the health sector.

II. LITERATURE REVIEW

Structural Adjustment Programmes were originally developed from the ‘Washington Consensus’, a term Williamson initially coined in 1989 to refer to specific economic policy prescriptions that constituted the standard reform package promoted for crises hit developing countries by International Monetary Fund (IMF), World Bank (WB) and the United States Treasury Department (Williamson 2004).

These policies, as indicated by Williamson (2004), included fiscal discipline, a redirection of public expenditure priorities, tax reform, interest rate liberalization, competitive exchange rates, trade liberalization, liberalization of inflows of foreign direct investment, privatization, deregulation and securing property rights. The IMF and WB adopted these policies as conditions for providing aid to developing countries under the assumption that this would lead to development as had been witnessed in Europe. Hence, most countries followed these conditions across Africa and Latin America.

Walle et al. (2003) indicates the major reasons why structural adjustment was implemented in Africa. Highlighted is the fact that the Bretton Woods Institutions took the view that the Post Colonial African state had failed in its developmental mission because of its excessive and counterproductive intervention in domestic economic processes, its over-bureaucratic and excessive size, the domination of its apparatus by clientelist networks and an urban coalition that orients it against the rural sector, its monopolization of the main economic levers of society with the resultant proliferation of rent seeking activities and its over-centralization which discouraged local initiative. It is in light of these factors that SAPs aimed at rolling back the frontiers of the state, trimming its size and encouraging the emergence of economic rationality.

According to Walle et al. (2003) it was assumed that through the unfettered rule of the impersonal market forces, and promoting the growth of the private sector, there would be sustainable democracy and a better system of governance, which would replace the neo-patrimonial structure that pervaded the African continent and underlie public policy.

Since their inception, the major controversies surrounding Structural Adjustment Programmes relate to the procedural framework hence the discordant tunes about what SAPs were capable of doing or incapable of doing, and where they failed, whether the blame lies with the donor or the recipient governments. Answers to such conceptual issues continue to be a characteristic feature of today’s development studies. Only a few scholars highlight successes of SAPs while the majority agrees that they were a total failure in Africa and Latin America. However, the reasons given for their dismal performances differ as shall be elaborated below.

The often cited cases of successful implementation of SAPs in Africa include Ghana’s economic miracle under the Provisional National Defense Council as revealed by Kwame (1999:2), and Uganda which is cited by Ronald (1999:83). However, Jaunch (1999:83) argues that despite some statistical economic growth in these countries, SAPs exposed the poor by pressing severe hardships on them and it became increasingly difficult for economic progress to be sustained over time.

Olukoshi (1998) explains how the bank carried out comparison exercises aimed at comparing countries with adjustment programmes to those without, reaching the conclusion that the former did better on the whole than the later. However, the major concern with this argument is that, entirely, no country was able to sustain the seemingly short progress that occurred soon after the implementation of SAPs.

One view concerning Structural Adjustment Programmes supports their implementation as a form of aid conditionality. Morrisey (2004:162) indicates that in general the results of aid and adjustment has been associated with declining levels of economic growth and that success stories are the exception rather than the rule. He, however, explains these unpleasant results in terms of the moral hazards that led recipient governments to treat aid as a substitute for actions viewed by the donor as developmental, rather than a means for facilitating such actions. Dollar and Stevenson (1998:3) share the same view and further argue that the deficiencies associated with SAPs concern the fact that the donors poured in funds with little consideration of whether the recipient governments were committed or not. They argue that policy based aid works and to ensure its success, donors have to be more selective focusing only on identified reformers and not try to create new reformers. Hence, these scholars blame the failures of SAPs on the domestic political economic factors of recipient governments.

In support of SAPs as aid conditionality, Muuka (1998:2) argues that it is highly legitimate for those who provide assistance and loans to take an active interest in the design of the recipient countries’ policies. Birdsall, Torre and Caicedo (2010), draw attention to the argument that, the Washington Consensus was fundamentally right in its principles, content and overall design. They allude to the fact that the problems associated with the failure of reforms is that reformers were too impatient, unreasonably expecting results to materialize sooner than warranted and were quick to abandon them, while structural reforms typically required long implementation and gestation periods.

Collier (2007:109-111) brought another dimension to this argument by indicating that, the strength of the SAPs project was hindered by the fact that they generated resistance, recipient governments lacked accountability and evaded responsibility by blaming the donors if the reforms failed to yield results. Moreover, he argues that no incentives for inducing both the donor and recipient countries to produce results were put in place. Aid was based on promises to implement reforms yet follow ups and incentives that would ensure the implementation of such policies lacked.

The former president of the World Bank, Conable (1995:5) argues that the failure of the magical market forces to stem Africa’s economic crisis was rooted in the African governance problems. Further noted is the assumption that, the African situation bad as it was, would have been worse had structural adjustment not been implemented. Taking the same line of reasoning, Olukoshi (1998:7) incriminates the persistence of African economic crisis on widespread slippage and lack of commitment to the reform package by the local political elites, and describes this as the ‘stop- go- stop approach to adjustment’.

Contrary to the views cited above, some scholars are highly critical of SAPs both in its content and philosophy, but however approached their views from different angles. Some scholars believe that the Washington consensus, upon which the basis of structural adjustment laid, was profoundly flawed. Some attacked the whole essence of aid conditionality and others focused on the visible impacts of the SAPs.

Bhagwati (1998:5) and Stiglitz (2006:27) both argue that the sequencing of reforms is very essential. They believe that wrong sequencing of reforms can rapidly wipe out gains achieved over several years. The Washington consensus provided a set of policy prescriptions, but was silent on the sequencing. Stiglitz (2006:28) indicates that effective reform agendas have to be carefully tailored to individual country circumstances, both in the design and implementation sequence.

Magumhe (2007:26) highlights the fact that SAPs were based on traditional western economies that were not appropriate in African contexts with their limited production possibilities and shortages of essential factors of the means of production, skills, capital and foreign exchange. Therefore, these scholars attacked the fact that reforms that were considered to have led to successful cases in Europe established the basis of the policy prescriptions upon which Structural Adjustment Programmes were based.

SAPs were also condemned as a form of aid conditionality. Killick (1997:493), argues that SAPs as conditionality are not an effective means of improving economic policies in recipient countries. Morrissey (2004:160) presents this fact and further intricate that the general failure of SAPs indicates that conditional lending is an ineffective mechanism to induce reform from unwilling governments and an inappropriate mechanism if governments are enthusiastic to reform. Hence, these scholars highlight that SAPs evidently failed because they reflect high levels of aid conditionality.

Closely related to these arguments, Easterly (2006:5) focuses on the perils of externally driven policies, describing development as a microeconomic phenomenon that is supposed to be generated from bottom up rather than from the planners who perceive to know everything about the recipient countries. Furthermore, Easterly shares the same argument with Ohler et al. (2010) who argue that recipients do not implement many of the conditions specified in the lending agreements with international financial institutions because of the lack of motivation and absence of monitoring mechanisms. They make reference to a study carried out by Dreher’s (2009) measuring compliance with IMF conditionality, which found out that compliance rates were roughly 50%.

The other set of critics of SAPs refer to the devastating results that they produced contrary to the perceived assumption that they were going to induce growth and increased production. As indicated by Jauch (1999), SAPs meant that most countries had to cut their budget expenditures, thereby reducing social service provisions. He alludes to the fact that this was associated with the privatization of social services, cuts in education and health services and elimination of food subsidies among other things, leading to the poor and vulnerable members of society being unable to access these services from the private sector. Ronald (1999:4), studied the African case and concludes that SAPs produced devastating results citing among other things external debt burdens, heightened inequality gaps, intensification of brain drain, deepening capital flight, weakening of balance of payments, deteriorating infrastructure, escalating unemployment, declining agricultural productivity and worsening political and civil strife.

Reimers (2002) articulates the issue of education expenditures during the SAPs era in Latin America and Sub-Saharan Africa. He concludes that adjusting countries reduced public education expenditures leading to deep cuts in teaching materials and deterioration of the salaries of teachers. The relative number of children enrolling for school declined and this affected girls more than boys. Central to the argument of Reimers (2002) is the fact that the failure of adjustment stems from the inability to include education and human resources development at the centre of the restructuring process. Kanji and Jadowska (1993) specifically give attention to the education sector in Zambia and conclude that increased school fees, reduction of subsidies on education and limited poor household’s ability to educate their children among other factors immensely affected Zambia’s education sector.

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