a tripartite report - Unctad

94 VOLUNTARY PEER REVIEW OF CLP: A TRIPARTITE REPORT ON THE UNITED REPUBLIC OF TANZANIA – ZAMBIA – ZIMBABWE
of capital imports. Its dependence on imported manufactured goods was also exposed. Its balance of payments
and Angola. As a consequence, its main trade routes were often interrupted. As a landlocked country, that was a
major barrier to development. In the period between 1975 and 1990, the level of real GDP per capita declined by
almost 30 per cent.
situation by commercial and public borrowing. It was believed that the market for copper would pick up and the
economy would be kick started. The multilateral donors such as the IMF and the World Bank appeared to share this
optimist view, lending sums of money to the country at reduced concessionary rates.
Finally in 1985 due to the worsening economic climate, the donor organizations put pressure on the Zambian Government
to attempt to restructure the economy through the introduction of a structural adjustment programme.
Attempts to follow these reforms were met with internal opposition as the food riots objecting to the cutting back
in food subsidies, and the structural adjustment programme was abandoned in 1987.
Sustained Economic Reform of the 1990s
The 1990s saw a move to a more outward oriented economy centred on a market based system. The newly elected
Government of Mr Frederick Chiluba in 1991 adopted a structural adjustment programme agreed with the IMF and
the World Bank. That included three main goals:
to restore macroeconomic stability;
to facilitate private sector growth through reducing the role of the State from controlling prices, foreign trade
restrictions and foreign currency transactions;
to privatize and deregulate agricultural and industrial output.
The Frederick Chiluba Government was committed to extensive economic reform. The Government privatized
many State industries, and maintained positive and real interest rates. Exchange controls were eliminated and free
market principles endorsed.
Despite attracting praise from the World Bank for the ‘success’ of its privatization programme, privatization had a
very mixed record in Zambia. Although some failing State-run enterprises began to operate more effectively after
privatization, many companies collapsed, jobs were lost and welfare programmes originally performed through a
parastatal were not continued by private companies.
Trade liberalization was also disastrous for manufacturing industries, such as textiles, that used to produce import
substitutes. Paid employment in mining, manufacturing and agriculture fell by nearly 40per cent during the 1990s.
It also had a negative impact on Government revenues which fell by more than 30per cent in real terms. With a
after 1993, real Government expenditure in the domestic economy (excluding interest on debt) fell by almost half
through the 1990s. Consequently, spending on important economic infrastructure, such as transport and communications,
was heavily cut.
Agricultural market reform had a similarly poor record. A 2000 World Bank study acknowledged that the removal of
all subsidies on maize and fertilizer led to ‘stagnation and regression instead of helping Zambia’s agricultural sector’.
Devastating droughts in 1992 and 1994 deepened poverty in rural areas.
In its 2003 Human Development Report, the United Nations Development Programme (UNDP) reported that
Zambia was the fourth worst performing economy in Africa with a ‘growth’ rate of -1.7 per cent per capita per year.
Structural Adjustment in the 2000s
The Elections in 2001 brought in Mr Levy Mwanawasa as the new President of Zambia. Mr Mwanawasa
launched an anti-corruption investigation in 2002 to probe high-level corruption during the previous
administration. In 2006-2007, that task force successfully prosecuted four cases, including a landmark
civil case in the United Kingdom in which former President Chiluba and numerous others were found liable for