Economic Development
- Zambia is a country in central southern Africa that was once a British colony
- The country gained independence in 1964
- It is classified as an LIDC – the HDI is 0.43 and the GNI/capita is $3070, almost half the country’s population live in poverty
- Zambia is a land-locked country, bordering the Democratic Republic of Congo to the NW, Tanzania to the NE, Malawi to the E, Mozambique is to the ESE, Zimbabwe is to the SE, Namibia is to the SW and Angola is to the W
- When Zambia first became independent, it was seen as an African success story and was expected to head towards development, obstacles occurred – preventing this from happening
- 1964 – Zambia gains independence, however the citizens and officials were unprepared
- 1970 – the global price of copper falls, Zambia must borrow money to develop
- 1975 – the Kariba Dam begins to generate hydro-electric power (which is important for the copper industry)
- 1980 – HIV/AIDS spreads across Africa, the death rate increases, and life-expectancy falls
- 1990 – Zambia is in deep debt and food prices soar, riots break out
- 2000 – the global price of copper starts to rise, Zambia can earn more
- 2006 – the IMF cancels Zambia’s debt, the government can spend more on development
- 2010 – Zambia develops tourism, farming and hydro-electric power to reduce its reliance on copper
Development Stages and Goals
- In 1960, economist Walt Rostow devised a model of economic development, identifying five stages that countries must go through as they develop
- Traditional Society – the economy is based on farming and low-level technology
- Pre-Conditions for Take-Off – farming improves with modern technology, industry begins to extract natural resources, trade and communications improve
- Take-Off – investment industry increases, a couple of manufacturing industries grow, infrastructure improves, rapid growth
- Zambia is approximately here on Rostow’s model (heading forward)
- Drive to Maturity – investment remains high, technology and mechanisation develop, international trade becomes more important
- Mass Consumption – consumer industries grow, increase in personal wealth and ownership, education levels are high, trade continues to grow
- The Millennium Development Goals (MDGs) were set out by the United Nations (UN) in 2000 which aimed to improve life in LIDCs by 2015
- Halve extreme poverty and hunger
- Achieve primary education everywhere
- Increase gender equality in education and in paid employment
- Reduce death rates in under-5s by two-thirds
- Reduce death rates from pregnancy / childbirth in women by three-quarters
- Combat major diseases such as HIV/AIDS
- Ensure environmental sustainability, whilst improving quality of life
- Develop a global aid for development of LIDCs
- Zambia achieved some of the MDGs development goals
- Most children attend primary school (2)
- There is gender equality in primary education (3)
- The number of people infected with HIV/AIDS had fallen (6)
- The country obtained debt relief (8)
- However, others they did not achieve, although they may have improved slightly
- Child mortality is still high (4)
- Maternal mortality is still high (5)
- The amount of forest land has fallen (7)
- Many people still lack proper sanitation (7)
- The UN set out Sustainable Development Goals (SDGs) in 2015 to achieve by 2030
International Trade
- Ever since Zambia was a British colony, its economy has been based on the copper mining industry
- Copper is a good conductor of electricity and today it is vital in the production of wire and cable
- Zambia has come to rely on its international trade of copper for 70% of its exports
- This is not a problem when the global price of copper is high, but it is when the price falls
- The prices fell between 1970 and 2000, causing economic decline in the country
- Development slowed down, and the country fell into debt
- Since 2000, the global price of copper has risen, copper production in Zambia has increased and this had helped the economy to grow
- The Zambian government wants to diversify the economy so that, in future, the country does not rely so much on copper
- China has become the world’s largest consumer of copper
- This makes Zambia an attractive place for Chinese investment
- In 1998, China Non-Ferrous Metals Corporation bought Chambishi mine, one of the largest copper mines in Zambia
- Over 500 Chinese companies now invest in Zambia in business ranging from mining to manufacturing, farming to tourism
- Chinese investment in Zambia has dated back to the 1970s when the Tanzanian Zambian Railway Authority (TAZARA) railway was funded by the Chinese government
- The railway is 1850km long from the Copperbelt region of Zambia to the port of Sar es Salaam in Tanzania
- It makes importation and exportation of goods easier
Trans-National Companies
- TNCs are companies that are in (produce / sell products in) more than one country
- Associated British Foods (ABF) is a TNC that is the UK’s largest food and drink manufacturers
- It operates in 46 countries, including Zambia
- The company’s total annual revenue is only slightly less than Zambia’s GDP
- In 2001, ABF bought Zambia Sugar, the company that produces most of the sugar consumed in Zambia and Zambia’s main sugar exporter
- TNCs can benefit the country by enabling it to improve development
- They provide jobs and income to individual workers
- Mazabuka is the ‘sweetest town in Zambia’
- Zambia Sugar (ABF) is the main employer in the town
- The workers’ income is more reliable
- The companies and workers pay taxes, which provide income for the government
- Investment helps to exploit natural resources
- They produce goods more efficiently and cheaply, reducing the cost to consumers
- They may educate the people, improve infrastructure and technology or set up facilities
- ABF provides free healthcare and schools for its workers in Mazabuka
- They create the multiplier effect
- TNCs set up factories
- Factory workers get income and spend money locally
- Local services receive more trade
- The government receives more tax which it invests in infrastructure
- They provide jobs and income to individual workers
- However, TNCs can bring some problems to the country
- They put their own profit before the interests of the workers, consumers and country
- The workers’ income may be unreliable as the TNC could relocate
- Large companies try to avoid paying tax or send profit abroad (economic leakage)
- The charity, Action Aid investigated ABF’s operation in Zambia in 2013
- It discovered that from 2008-13, Zambia Sugar (ABF) paid almost no tax to Zambia
- It did this by the government’s new tax incentives to reduce tax on a company’s new investment and by transferring profit made in Zambia to other ABF companies in countries with lower tax rates
- They dominate industries and make it more difficult for local companies to compete
- They pay low wages by international standards and conditions can be harsh
- Some pollute and damage the environment
- Some don’t give natives best jobs
International Aid and Debt Relief
- In Zambia, a British charity is WaterAid
- Zambia needs the aid
- 5.2million people don’t have access to clean water
- 8million people in Zambia don’t have access to adequate sanitation
- 5000 children in Zambia die every year from diarrhoea caused by unsafe water or poor sanitation
- The charity works with locals and organisations to install simple, low-cost water pumps and toilets that communities can easily maintain
- In one year, WaterAid changed lots of lives
- It provides 54 000 people with safe water
- It provides 42 000 people with improved sanitation
- Zambia needs the aid
- Aid has numerous advantages
- Aid is an attempt to rebalance global inequality
- It is repayment for the benefits ACs got for colonialism
- Everyone, whoever and wherever, should have the right to life’s essentials
- Large scale projects solve common problems and help lots of people
- Small scale projects often employ locals who earn money and learn new skills
- May help to build trade links between the donor and recipient countries
- However, aid can be damaging for countries
- Aid discourages countries and their people from looking after themselves and increases dependency
- Donors may decide what aid to give and it may not be the most necessary type
- It may be given to a corrupt government or used to pay for a country’s war
- Tied aid can cause problems
- Some types of aid may benefit the donor more than the receiver, or limit local businesses
- LIDCs often have international debt which is greater than the aid that they receive
- This happened for Zambia up until 2006 when they qualified for debt relief
- Until then, it was one of 39 highly indebted poor countries (HIPCs) – 33 of them are in sub-Saharan Africa
- In 2006, Zambia received $6.5 billion of debt relief from the IMF
- As a result, it has been able to spend more money on health and education by reducing primary school fees and buying drugs to keep the AIDs epidemic under control
Top-down Strategy
- Top-down development strategies are funded and carried out by a government or a large international organisation
- The Kariba Dam on the Zambezi River is a top-down development project in Zambia
- It was built in the 1950s and is one of the earliest large dams in the world
- It was a joint project between the governments of Zambia and Zimbabwe (the Northern and Sothern Rhodesia)
- It was built to produce hydroelectric power for both countries, particularly for major industries like Zambia’s copper mines
- The Kariba Dam is still one of the largest in the world and the Kariba Lake lies behind it
- It has various advantages that it brought to Zambia
- The dam generates large amounts of hydroelectric power, which helps the country to develop
- The power is vital for Zambia’s copper industry and has helped Lusaka to develop
- Environmentally, hydro-electric power is a renewable form of energy that does not produce carbon emissions and is a lot cleaner than energy from a coal power station
- New industries have developed around Lake Kariba, particularly fishing and tourism
- However, whilst it was being built and still today, it has been disadvantageous in some ways
- 57 000 Tonga people, mostly farming families, were moved from the Zambezi valley and were forced to resettle far from their land
- The land they moved to was less fertile than the Zambezi valley, causing hunger and famine
- Natural flooding no longer occurs in the Zambezi valley downstream from the dam, leading to the loss of natural ecosystems and farmland
- Communities north and south of Lake Kariba are cut off from each other
- Some of the communities don’t have any electricity
- 57 000 Tonga people, mostly farming families, were moved from the Zambezi valley and were forced to resettle far from their land
- There are many concerns about the safety of the Kariba Dam as time goes on
- Torrents of water from six floodgates in the dam are eroding the bedrock on the riverbed; this is creating a plunge pool and undermining the foundations of the dam; it is possible that the dam would collapse
- If the Kariba Dam collapsed, consequences would be devastating
- A tsunami of water would pour down the Zambezi to reach Mozambique in hours
- The water would overwhelm the Cahora Bassa Dam and 40% of southern Africa’s hydro-electric power would be lost
- Ecosystems and wildlife along the Zambezi River as far as the Indian Ocean would be lost
- 3.5 million people’s lives are at risk from flooding, including in Lusaka
Bottom-up Strategy
- Bottom-up development strategies are funded and carried out by NGOs in co-operation with local communities
- Room to Read is an NGO that works to improve literacy and gender equality in education across Asia and Africa
- In Zambia, Room to Read are running a bottom-up project – Girls Education Programme; the aim is to promote gender equality in education, with the focus on secondary education
- Traditionally in Zambia there is a much higher drop-out rate from schools among girls than boys
- Girls are expected to take on domestic responsibilities and to earn money to support the family at a young age
- Parents do not value education for girls in the same way they do for boys
- The drop-out ratio for girls to boys is 2:1
- Girls are often pushed to get married and become pregnant prematurely and so leave school
- Even in school, class sizes between 40-50 mean that students do not achieve as well as they could
- Zambia’s educational performance is poor compared to other African countries
- Bottom-up development has various advantages
- Local people have a say in how the schools should be improved
- It is an investment for the future generation, as they will be more educated and can get to high-income jobs
- The local people are the ones being trained up to teach
- However, the advantages also come with some disadvantages
- There is not enough funding to improve all schools, so not everyone can benefit
- Some families need children to earn a living, so they can’t afford for them to go to school
- Volunteers are a necessity and funding could be withdrawn