Threats to Global Economic Trade and Stability
The land before Zambia has always held nomadic tribes since the B.C. era and continued until British rule. At about the 1500’s tribes pursued the land as a key territorial point in order to raid other tribes in order to sell slaves to the Portuguese. The nation was to be truly colonized by the British South Africa Company (SAC), for its value of natural resources. Bemba and the Ngoni, the two tribes couldn’t negotiate peace in the land which led the British to have an opportunity to take control and force many Africans living their to be wage laborers around 1914. Throughout the 1920’s and 40’s changes in Zambia occurred from more mining jobs for copper and cobalt, to the development of more schools, committees, and other trade unions for jobs and politics. With all these developments, the natives gained independence with enough protest on October 24th, 1964. During this time of setting up government, unqualified personnel did not create the best government. Inflation tripled, housing life became poor, and their was an uneven balance of distributed wealth in the nation. Within the recent years, the economy has fluctuated at an astounding rate, showing a bright future for the soon to be well developed nation.
Zambia’s past economic issues mostly revolve around copper. One main problem with Zambia throughout history is it’s reliance on copper being its main export, without diversifying other materials to trade, Zambia’s economy is mostly dictated by copper prices. At first industry grew rapidly. But the economy did well in the 1960s and 1970s mostly because of the high price of copper. After 1974 the price of copper dropped. That caused great harm to the Zambian economy which was largely dependent on copper. Another factor was president Kuanda was losing power throughout the 1980’s, resulting in changes in heads of power.In the 1960s and 1970s a bloated bureaucracy was created. It soaked up resources. Worse unqualified people were given important jobs. People were given jobs because of their loyalty rather than their skills. Worse they were frequently changed. Between 1964 and 1986 there were 12 ministers of finance and 9 central bank heads. Such frequent changes of people at the top made it very hard to have consistent policies. Worse the Zambian economy was heavily dependent on copper. From the mid 1970s the price of copper fell with disastrous results for Zambia. The country was forced to borrow money and Zambia got more and more into debt, and In the mid 1980s Zambia was forced to accept IMF adjustment programs, which were painful for the Zambian people, along with the tripled inflation rates change was needed. A new president was finally elected in 1991, president Fredrick Chiluba, in order to fix many of these economic problems. These issues still lasts today, with the main causes from the economic downfall starting in the 1980’s.
Zambia today is still fighting many challenges of economic stability. Over 64% of the population is below the poverty line. Many people who are poor roam the streets committing crimes in order to survive. They have one of the highest literacy rates in Africa 80.6%, but the quality of education is still at an all time low, making it still difficult for many to make money for their families. Droughts, tropical storms and other natural disasters keep development from increasing and still leaving people poor, and government corruption is yet another issue the nation still facing to overcome. Despite all these negative issues Zambia is facing, there is still some positive changes going well for the nation. Zambia is one of the fastest growing economies, earing ⅓ of it’s GDP in copper, which has been the renowned industry for the nation along with other important metals. Mentioned before, it does also have one of the highest literacy rates in Africa, allowing its people to be educated. To conclude, Zambia today is faced with some difficult challenges for the economy, but with a fast economic growth, and a lead in literacy rates, Zambia should not have many problems for the nations as it continues to grow.
It is the belief of Zambia that in order to prevent the collapse of the global economy, the economies of nations must have adequate protection. For example, Zambia has an economy very much dependent on the production of copper (ie they produce a lot of copper), so if the Zambian copper market was to collapse tomorrow, copper prices would spring up: causing widespread economic instabilities. While it is true that other countries more than make up for Zambia’s copper production, it is equally true that many nations have cut their production of copper, and it would likewise take time to increase production. The delay between Zambia’s loss of production and the increased production in other countries could have serious economic ripples. It is therefore in the interest of all nations to prevent such economic crashes. In order to do this, we must work proactively to ensure that all countries do not crash due to the collapse of one industry, major or minor. The best proactive solution would likely be to prevent economic crashes of these “single export” countries, Zambia being an example. These countries pose a unique threat to economic stability because of the often volatile economies that are produced by their only having one export. By investing in these mono-economies, new industries can be created and economic dependency on one “cash crop” done away with. By preventing the economic collapse of major raw mineral exporters, the price of these minerals can be kept relatively constant, preventing erratic and harmful ripple effects that can damage any nation’s economy.
To conclude, Zambia has had dark past in economic growth and stability. The future appears bright however, with one of the fastest growing economies and a wealthy needed export, Zambia is on the verge of being a strong, economically safe nation. In order to maintain this, we hope to improve upon our economic infrastructure, stability, and diversify our exported goods to more than just copper. Zambia looks forward to growing as prosperous nation with a goal set around 2030.