The second stage entailed the transformation of economic structures through deregulation, privatisation, reduction of bureaucracies and subsidies, and the encouragement of realistic prices in order to stimulate high productivity. 119. Although the SAP accelerated inflation, hardship and deprivation for the majority of the population in the first years of its implementation, its benefits began to be felt in the subsequent years, with substantial growth in the agricultural and industrial sectors. In order to mitigate the negative effects of the SAP, the government implemented “zero-generation” reforms aimed at the majority of people who had suffered most from the civil war. These reforms included the introduction of social safety net programmes, such as the Demobilisation Fund (for retrenched FRELIMO and RENAMO soldiers), the Food and Subsidy Scheme, the Social Fund for Medicines, the Infant Food Supplement, the School Social Action Fund, the School Lunch Programme, the Civil Servant Wage Supplement and the Emergency Programme. This suggests that the programme has been relatively successful in halting economic stagnation and boosting rapid economic growth in Mozambique, despite criticisms levelled by some scholars against the Bretton Woods institutions. 12 120. Notably, though, while the government accepted the neoliberal policy prescriptions of the IMF and the World Bank in order to secure funding, these policies often led to the wide-scale neglect of social concerns, especially in respect of the poor. They also had severe implications for “uncompetitive” industries and regions, resulting in increased inequalities between rural and urban areas, in particular. 13 121. In 1994, with the former leader of FRELIMO, Joaquim Chissano, being elected as President during the country’s first multiparty democratic elections, a new political scene was set. Attempts at reinvigorating economic reforms within the framework of the liberalistic-enthused Economic and Social Rehabilitation Programme (ESRP) were initiated. 14 These included a sequence of standard stabilisation measures, such as monetary restraint, fiscal adjustment and devaluation of the exchange rate. Based on neoliberal principles, 15 radical economic reform started to take shape in the form of a reduced role of the government in the economy as state expenditure declined, privatisation of state-owned industries increased and protective tariffs were phased out. 12 Kulipossa, F.P. 1987. Draft Report on Mozambique, page 5. 13 Peck, J. & Tickell, A. 1992. Local modes of regulation. Geoforum, 23(3): 347–363. 14 Arndt, C. & Tarp, F. 2000. Agricultural technology, risk and gender: A CGE analysis for Mozambique. World Development, 26: 1307–1326; Arndt, C. & Lewis, J.D. 2000. The macro-implications of the HIV/Aids epi demic: A preliminary assessment. South African Journal of Economics, 68(5): 1–32. 15 The neoliberal ideology has originated from the neoclassical economic theory of free market fundamental- ism and is based on the principles of privatisation, deregulation, fiscal austerity and other forms of market liberalisation, as encapsulated in the Washington Consensus and the second-generation reforms. 69