The Zambia European Community Country Strategy Paper 2001-2007
Prepared and presented by Gideon Mudenda

Introduction
In this paper, I will summarise the main elements of the EC-Zambia Country Strategy Paper and the Indicative Programme of Cooperation. From there, I will make a few observations on this co-operation programme from the civil society and practitioner's perspectives. I argue that the co-operation programme addresses some pertinent issues affecting Zambia's development but falls short of the needs for meaningful poverty reduction. I promise to show that the process of negotiations was itself inadequate and therefore missed the opportunity for strengthening poverty reduction outcomes. I will suggest a few propositions on how the civil society and government could be overcome this policy inadequacy and redirect efforts to lasting poverty reduction measures.

The Zambia-EC Country Strategy Paper

The Zambia-EC Country Strategy Paper has six elements. These describe the EC co-operation objectives, the national policy agenda, and an analysis of the political, economic and social situation, an assessment of past and ongoing co-operation, the response strategy and the Indicative programme, in addition to 12 annexes.

1. EC Co-operation Objectives
   The overall objective for the community development objectives is to foster the campaign against poverty and to promote sustainable economic and social development in developing countries. In addition to this, EC pursues fulfilment of other objectives related to consolidation of democracy and the rule of law, and to that of respect for human rights and fundamental freedoms.
   EC Co-operation objectives and principles stated in the ACP-EU Partnership Agreement provide for support framework for the development strategies of each ACP state. The Zambia-EC Country Strategy Paper is therefore a statement of EC support for Zambia's development strategies. The ACP-EU Partnership Agreement offers support in the following areas;
   
   a. Economic growth and private sector development
   b. Respect for the rights of the individual and social development
   c. Co-operation and regional integration
   d. Capacity building and institutional support for democracy and market      economy;
   e. Gender equality and sustainable environmental management
   
   All these and other measures intend to promotion of economic and trade co-operation to enable Zambia to participate actively in multilateral trade negotiations. Thus, the EC co-operation policy remains committed to preferential, non-reciprocal treatment of products from least developed and landlocked countries such as Zambia and encourages them to take advantage of the "Everything But Arms" (EBA) initiative and facilitate Zambia's economic integration in the world economy.
   
   
2. The National Policy Agenda
   The National Policy Agenda is a statement of government policies and simply restates government commitment reducing poverty from 70% to 50% of people living in poverty by 2015. The strategy to achieve this objective will be through 'broad-based growth in agriculture and rural development, the provision of physical infrastructure, increased incomes for the urban poor through economic reforms (e.g. deregulation) aimed at improvement of productivity in the informal and micro-enterprise sectors and development of human resources through capacity building'.
   A complete set of government policy agenda includes the following issues.
   a. Democracy, Human Rights and Good Governance.
   This refers to Government White Paper - The National Capacity Building Programme for Good Governance (1999), which sets an agenda for enhancing economic management and democracy, decentralisation and local government accountability and transparency; constitutionalism and human rights. A notable exception is concern for the national treatment of prisoners and detained persons.
   b. Macroeconomics Policies
   The policy is to continue with external support (53% of Budget) for government to improve welfare of Zambians in return for completion of the structural and social adjustment reforms, restructuring and reforming public administration, as well as, undertaking measures to improve performance of agriculture, mining and tourism.
   c. Sectoral policies
   In this respect, transport sector and road transport in particular is the priority focus of poverty reduction policy. The relationship between availability of transport and poverty reduction may be more tenuous than its importance to facilitating regional integration.
   The government admitted its lack of a private sector development policy, but hopes that investments in infrastructure, such as, improving the road network, would somehow encourage private sector activities in gemstone and industrial minerals, hotels, restaurants and lodges.
   The national policy agenda recognised the role of agriculture in international economic integration and stated the sector objectives. However, it does not offer any strategies for 'bringing the subsistence producers in the cash economy' or promoting output growth, food security and exports. It was however recognised that provision of infrastructure would have a critical role in easing transportation of agricultural outputs and inputs.
   The CSP noted the need for diversification and growth of manufacturing. It noted the precarious nature of manufacturing sector performance, its lack of both comparative and competitive advantage within the region and low levels of productivity and unsatisfactory degree of installed capacity utilisation. It was however, silent on how this came about, whether external trade liberalisation had worsened domestic manufacturing. The CSP offers tourism as a viable option for meeting the objectives of CSP. It suggests that success of tourism development would in turn require preservation and management of wildlife resources. It remains to be decided how tourism sector would contribute to poverty alleviation at the scale of Zambia's poverty reduction needs. A glance at the social situation in Zambia's tourist capital can show the social effect of tourism development on poverty .
   d. Cross Cutting Issues
   The government pursues sector wide assistance programmes in health and education because of the critical needs of external assistance in these sectors to meet humanitarian sectoral needs caused by declining government expenditures. Both sectors have undergone a process of institutional reforms to raise private, household participation in cost of delivering health and educational services. The pursuit of co-financing arrangements where 73 percent of the people spend less than $2 a day has dubious poverty reduction benefits.
   While recognising the critical HIV/AIDS situation in the country and the spread of diseases associated with poverty, it mistakenly reported life expectancy figures and ignored the emergency situation related to child malnutrition - involving at least a quarter of children and in places over 40% of them.
   The national policy agenda considers poverty reduction and institutional and structural reforms as the key policy challenges facing Zambia. It offers transport sector reforms and rehabilitation as the pivot for poverty reduction.
   
   
3. The Response Strategy
   The response strategy adopted private sector development in agriculture, mining and tourism to be the prime actor of the economy and through its development generate employment and additional tax resources for the government and therefore EC assistance would focus on:
   
   
   o Government improvement of business environment;
   o Improvement of road infrastructure
   o Provision of loans and capital through the European Development Bank;
   The suggested strategy for addressing these requirements is through:
   o Government and private sector institutional and capacity building
   o Focussing on tansport infrastructure
   o Continuation of loan facilities under the EIB.
   
   As seen from above, the government of Zambia was unable to present a clear set of sectoral policies for agriculture and tourism, the EC was unable to accommodate the needs of country in this area. Lack of a coherent agriculture sector, which provides livelihood to a large majority of Zambians, makes government statements of commitment to poverty reduction very questionable. This omission not only reduces the scope for anti-poverty orientation of EC-Zambia Co-operation, but also demonstrates the serious absence of policy making and negotiation skills on the Zambian government side.
   
   a. Focal sectors
   Transport sector interventions are the main area of concentration of co-operation because of the crucial role of roads in easing access within and outside the country. Access to well maintained road was considered to be a prerequisite for poverty reduction, for the development of domestic markets and regional integration. The nature of assistance is preventive maintenance of trunk, main and district roads to bring them to an acceptable standard. Focus is on elimination of backlog of rehabilitation needs and enhanced control of axle loads. Additional support is given to maintenance and rehabilitation of feeder roads and funding of the transport mode study and studies for rail track upgrading.
   The Institutional development and capacity building is the second focus area by improving organisational performance and capacity of public, quasi-public and private institutions through upgrading of manpower conditions in the public sector and incentives for private sector growth. In this respect, the EU noted losses of efficiency and effectiveness of public administration due to HIV/AIDS, poor remuneration and sheer lack of skills. The EC therefore, offered support for building financial, economic management capacity, and public-private dialogue and co-operation with a wide range of non-state actors
   b. Bon focal Sectors
   EC support will go towards provision of better Health and Education services, including HIV/AIDS through basket funding mechanism as well as SWAP approach.
   c. Other Elements of the Support Strategy
   These refer to the activities of the European Investment Bank by providing 111 million euros towards balance of payments support (economic vulnerability due to export losses), awards for HIPIC and other debt forgiveness initiatives, natural disaster preparedness.
   
   
4. The Indicative Programme
   
   The Indicative programme was given as follows:
   Envelop A €240 million
   Envelop B €111 million
   Total €351 million plus, funds from the, budget lines and all ACP programmes. This represented a 35%reduction from funds disbursed between January 1998 and December 2000.
   
   
5. Some Observations
   It seems evident from the foregoing presentation that the government service (civil servants in particular), the private sector and civil society are the major beneficiary of the Zambia-EC Co-operation Programme. It is not clear how the smallholder farmers and workers will benefit from this programme. Undeniably, better roads will assist them with greater opportunities for overcoming transportation difficulties and improving access to transportation facilities and the development of markets for their products and inputs. However, lack of capacity to formulate adequate pro-poor national policy positions, particularly for agricultural development greatly undermines prospects for enhanced contribution of the Zambia EC co-operation programme to poverty reduction.
   Some of the reasons for this are continued reliance on received neo-liberal economic frameworks, even in the absence of tangible benefits as regards manufacturing and agriculture for instance, the inadequate domestication of received policy prescriptions and reduced public participation in the formulation of the programme itself. Other factors for inadequate anti-poverty orientation of the co-operation programme are the inability of national authorities to articulate the relationship between trade and poverty and inadequate institutional mechanisms for addressing trade related issues.
   a. Policy Formulation Capacity
   The articulation of the national policy agenda of the CSP and the selection of focal areas of co-operation shows the pre-eminence of the EC in the negotiation process. The ability of the EC side to drive the process Zambia's inability to identify her trade and development objectives and therefore articulate policy positions and influences the outcome of the negotiation process. It is clear that Zambia does not have a coherent trade policy framework that addresses the poverty reduction requirements. It does not advance Zambia's interests. For instance,
   o The CSP for instance did not articulate the argument that continuous fall in prices of exports is responsible for income and foreign exchange losses and the major reason for increased poverty among Zambians.
   o It failed to acknowledge the costs associated with import liberalisation and privatisation as insisted upon Zambia by Bretton Woods institutions' loan conditions and WTO trade rules as being responsible for urban unemployment and threats to rural livelihoods.
   o The CSP could not show that HIPIC focus on debt sustainability rather than poverty reduction focus does not help us to overcome the negative social impacts that the structural adjustment programme and therefore that the PRSP and the PRGF are contradictory. The CSP is quiet on the need for outright debt cancellation.
   o It could not even argue that Zambia was already too integrated with the world economy and that efforts to improve trade would improve her debt service capacity and not necessarily result in poverty reduction in the absence of debt cancellation.
   The OECD Guidelines (2001) for instance insist that a country should possess the following attributes to have better economic co-operation programmes:
   i. A coherent trade strategy that is closely integrated with the country's overall development strategy.
   ii. Effective mechanism for consultation with a broad range of actors, the private sector institutions, civil society, trade networks, Universities and other think tanks.
   iii. A strategy to enhance collection, analysis and dissemination of trade related information.
   iv. Existence of trade policy networks supported by local research institutions;
   v. Political commitment to regional efforts.
   It is clear that all the above prescriptions / attributes are missing from Zambia's profile as shown by the CSP and the Indicative Programme. The trade policy framework does not reflect overall trade and poverty development objectives. Moreover, statements of objectives alone without clear options for negotiation cannot lead to an identified agenda for action that spells roles for the private sector, civil society and the government. The CSP does not reflect a demonstrated attempt to promote national interests, does not reflect to legal framework or an attempt to enhance compliance with national standards and obligations. A review of the CSP consultation schedule (Annex10) shows that the process suffered form inadequate preparations.
   b. Leadership
   A strong and well-informed political leadership is a prerequisite for effective country co-operation programmes. Absence of political leadership in the CSP is evident form the domination of the Ministry of Finance officials in this process. There is no indication of a cabinet level involvement in the process leading to the development of the CSP. Ultimately, bureaucrats led the CSP process. It is therefore not surprising that the bulk of proceeds of the CSP went to institutional support and better roads for new government vehicles purchased in the name of capacity building. The private sector is the next in line of beneficiaries. For a co-operation programme based on campaign against poverty, it is interesting that private sector in agriculture, (read horticultural exports) mining (copper and gemstones) and tourism (wildlife) probably because the sectors ultimately produce for European consumption. It is not clear how the smallholder farmers would access EIB loans and capital. In fact, the poverty orientation of such a support is highly debatable.
   c. Participation
   From annex 10, it is obvious that Government officials dominated the process. Appendix 10, which lists CSP consultations, shows that Zambian government officials met six times, EC member states met four times, the private sector and civil society were both consulted twice. In this process, the civil society side did not include Zambia Farmers' Union and Trade Union representatives. Representatives of European civil society in Zambia did not participate. No member of parliament participated. Would it be surprising therefore that the CSP did not adequately address the needs of the smallholder farmers and the workers.
   
   
6. Recommendations
   i. The format for negotiations provided by the CSP, between EC and Zambia, provides EC countries with an opportunity for coordinating their assistance to Zambia and therefore the advantage to impose policy conditionality for aid. For instance, the need to improve economic governance and better accounting of EC counterpart funds is a condition for continued disbursement of budgetary support. Unquestionably, this reduces policy ownership of initiatives of the Government of Zambia.
   ii. Future CSP should be more inclusive and should benefit from a trade and development approach to account for Zambia's interests during negotiations.
   iii. Negotiating teams should be broad based and include representatives of farmers' associations, civil society, private sector and unions. The domination of the Ministry of Finance, in its present form, is not consistent with capacity and skill to negotiate and articulate Zambia's interests.
   iv. The civil society organisations should improve their capacity to research and discuss national positions in order to help government to articulate national interests that lead to meaningful development programmes.
   v. The citizen's right to development should be at the centre of co-operation programmes and policies encouraging liberalisation and globalisation should be go with social and economic policies directed at minimising social exclusion. Only then will globalisation policies contribute meaningfully towards poverty alleviation and sustainable development.
   
   
7. Funding for Non-state actors.
   The scope for non-state actors in the ACP-EU partnership agreement can only be enhanced with the availability of funds. In this regard we see that the Cotonou agreement recognizes the need for non-state actors to be funded. This will be done in three ways. The first is directly through the European Development fund resources. For capacity building , the non-state actors can have direct access to funds via the EC delegation. The National Authorizing Officer is key in this case.

   The second channel is through the National Indicative Programmes and thirdly through the NGO co-financing budget line, through which European NGOs can support the activities of their southern partners. However, it is important to note that all these three funding modes have their own advantages and disadvantages. We are yet to see which of the modes will be more effective for Zambian non-state actors.

   Finally, while the non-state actors strive to participate fully in the partnership agreement, there is the issue of capacity. Most non-state actors lack the capacity to engage in issues of trade. This is not surprising because, the non-state actors were left out in the LOME agreements, a chance which would have enabled them develop capacity over time. It is incumbent upon the EU and our government to assist in the development of the capacity of non-state actors to engage and participate in the negotiations and implementation of the partnership agreements. .

   
   
8. Conclusion
   
   In conclusion, I would say that it clear from the presentation that opportunities are there and the scope is wide for non-state actor participation in the ACP-EU partnership agreement. However the framwork of participation needs to be clearly defined so that non-state actors take their rightful role. Non-state actors need to develop their capacity to effectively participate in the implementation of programme under the Cotonou agreement.

References

ACTSA, ENIASA, MWENGO, ( 2002) The Cotonou Trade Negotiations: Building European Solidarity for Southern Africa, Report of a conference held at ACP House, Brussel.

ACP-EU Partnership Agreement, signed in Cotonou , June 2000.

Trade and Development Studies Centre-Trust, Non -state actors and the new ACP-EU partnership Agreement, 2000,

Lungu A ( 2003) Will trade benefit the poor. Economic Justice Bulletin, CCJP, No 33

www.euforic.org/res