Economy and Globalization in Zambia

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Economy and Globalization in Zambia

At the time of independence, Zambia was expected to become of the wealthiest nations in Africa. With access to raw materials such as copper and land, Zambia seemed to have all it needed to succeed in the global economy. However, it is now one of the world’s poorest nations. So how did this dramatic change take place in less than 30 years? Much of Africa has experienced economic decline in the past decades. How does Zambia’s situation compare to other countries in sub-Saharan Africa, and how is it affected by the geographic context in which it exists? Examining the economic situation and Zambia’s place in the global economy will help these questions to be understood.

Lusaka, Zambia

Zambia is a land-locked country located in central Africa. About the size of Texas, it is home to 11 million people. The population is made up of a variety of ethnic groups, most of whom speak Bantu. Zambia is currently one of the poorest countries in Africa, and is identified by the United Nations Development Program as a HIPC – Highly Indebted Poor Country.

“Lusaka is the product of a country battling to find its way in a new world, caught between colonial beginnings, years of socialist independence and now democracy.” -Zambian National Tourist Board

Lusaka became the capital of Zambia in 1930 but growth really took place in the 1960’s. The Lusaka City Council describes the city as a metropolis home to 2.5 million people.

Lusaka is constantly changing. New shops are being built, and a multi-million dollar shopping mall is being constructed. However, the Zambian National Tourist Board warns that many travelers may not see any reason to stay and that over 60% of the population of Lusaka is unemployed. Of those that do have work, much of it is in farming, textiles and manufacturing.

Economic History

Before it was colonized, Zambia was inhabited by a large number of different tribes, organized into chieftaincies and monarchies. There was an active trading network in copper, ivory, rhino horn and slaves.

However, when colonization of Africa began, Zambia was taken over by the British government, which was particularly interested in the copper located in the northern part of the country. Because this occurred during the industrial revolution, copper was in high demand and made up 90% of Zambia’s exports. Mining was run primarily by the British South African Mining Company, with indigenous people as forced laborers. Zambia itself did not benefit from the significant amount of money coming in from the sale of copper, as this was realized large labor groups organized encouraging nationalist movements.

In 1964, Zambia won independence from Britain, and Kenneth Kaunda became the first leader of the country. He organized Zambia on a socialist economic model. The copper mines were owned by the state. In the first ten years following independence, the level of

real GDP grew at 2.3% a year. Copper prices were increasing and it seemed that Zambia would be a very prosperous nation.

However, by the mid-1970’s that dream began to fade. Copper prices fell in the world market. The price of oil and energy fueled global inflation and increased the price of imports. Zambia’s reliance on the copper trade was evident, and it was forced to begin borrowing heavily from international institutions. It seems that Zambia, the World Bank, and the IMF all agreed that copper prices would increase again, jump-starting Zambia’s economy. However, as time went on, this did not prove true. Further, neighboring countries fighting for independence were supported by Zambia, and trade routes were disrupted. From 1975-1990 the GDP per capital fell by almost 30%.

When it became clear that the Zambian economy was not going to just pull out of the situation, global donors were no longer happy to continue the way things were going. They insisted on economic reforms within the country. These included cut backs in...
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