The IMF: Dr. Death?

It would all be rosy were it not for the 15 million to 18 million people--more than half the population--living in dire poverty, with 12.5 million of them unable to afford the most basic needs. These men and women, almost all subsistence or small-plot cash-crop farmers, have been structurally adjusted half to death. Though Adams points to progress--51% of Tanzanians now survive on $1 a day or less, down from 65% in the mid-1980s--his statistic makes Tanzanian analysts laugh bitterly, because it misses the fact that everything in a farmer's life costs more today. Currency devaluation and the elimination of agricultural subsidies doubled and quadrupled fertilizer prices, according to a study by the Evangelical Lutheran Church. Farmers couldn't borrow, because short-term interest rates in rural areas hit 100%. Yields fell, but thanks to global oversupply and greedy middlemen, farmers were often paid less for what they could grow. Famine remains a persistent threat for 40% of the country.

With Tanzania's debt from IMF, World Bank and other loans now at $6.4 billion, the government has been spending 40% of its annual revenue on interest payments--more than it spends on health and education combined. Even the poorest families are subjected to "cost sharing"--paying fees for basic health care and even elementary school. In response, 70% of the people consult faith healers (this in a country with an HIV epidemic), and school enrollment has fallen from 93% in 1993 to 66% today. "The data are very clear," says I.F. Shao, director of the Institute of Development Studies at the University of Dar es Salaam. "A small number of people are doing very well indeed, but the vast majority are suffering more than ever. There are wonderful things in the shops now, but who can buy them?" Adams agrees that "we need to get the income gains into the rural areas," but defends the reforms. "The transition could have been made more gently, but it had to happen. The old system was unsustainable. But now, finally, we're at the starting gate--Tanzania is ready to build on its progress." The World Bank and IMF announced a $2 billion debt-forgiveness package for Tanzania last week, but Mkapa moved quickly to make sure his people didn't get their hopes up. He announced that the benefits of debt relief won't be felt until late 2001 and added, "We have to continue tightening the belt."