Zambia's first decade as LDC - Third United Nations Conference on Least Developed Countries - Statistical Data Included

UN Chronicle, June-August, 2001 by Nadja Schmeil

In May 2001, the European Union and the United Nations hosted the Third United Nations Conference on Least Developed Countries (LDCs) in Brussels, Belgium. Testimony to the continuously growing number of LDCs was Zambia's first-time participation as one of the 49 poorest countries in the world.

"There are certain benefits and certain expectations when you are regarded as a poor man", said Dr. Herrick Mpuku, Zambia's Permanent Secretary of Budget and Economic Affairs, during an interview before the Conference. Zambia, which became an LDC ten years ago, did not attend the first Conference and held observer status at the second.

Expectations of increased socio-economic benefits fuelled the spirits at the commencement on 14 May of the Third United Nations Conference. At the opening session, Secretary-General Kofi Annan said, "we are here to consider what kind of support would be most useful to the people of the world's 49 least developed countries and to make sure that they get it".

Representatives at the Conference spanned LDCs, non-governmental organizations, Heads of State and multilateral institutions such as the World Bank, the World Trade Organization, Cisco Systems and Oxfam International. This diversity reflected the Conference's objective of including members of civil society, the private sector, as well as Governments, in the global dialogue.

Throughout the week, round-table discussions keyed in on topics which included migration and refugees, the business sector, the digital economy and youth. Thematic sessions highlighted issues such as education, international trade, energy, and human resources development and employment.

The Conference culminated in the production of a new Programme of Action report that aims to rectify the lack of implementation of policies proscribed by the Paris Programme of Action report, adopted at the Second LDC Conference in 1990. Main goals set by the Programme of Action for this new decade have been developed in a collaborative process between LDCs and their development partners, in line with UN goals for the new millennium.

The new report determines that "the overarching goal of the Programme of Action is to make substantial progress toward halving the proportion of people living in extreme poverty and suffering from hunger by 2015 and promote sustainable development of the LDCs". According to the report, LDCs hope to reach a minimum gross domestic product (GDP) growth rate of 7 per cent per year and increase the ratio of investment to GDP to 25 per cent per year. In order to reach this goal, participation from both the private sector and civil society is essential.

"LDCs are being bypassed by the process of globalization", the Progamme of Action points out. Political as well as economic developments have left LDCs at minimal development levels.

Among such persistent economic blockades are minimal financial resources, unsustainable debt burdens, falling commodity prices, complex trade barriers, lack of economic diversification and supply-side constraints. This is despite efforts made to follow economic reform programmes delineated in the 1990 Programme of Action. Reform activities included eliminating or reducing tariffs and similar trade barriers, liberalizing currency regimes, privatizing public enterprises, establishing and strengthening institutional and regulatory frameworks, and adopting liberal investment policies. The inability to reach these objectives, however, has contributed to the failure of the Action Programme of the past decade.

According to Dr. Mpuku, the Zambian Government, since becoming an LDC, has tried to keep its policies consistent in terms of macroeconomic structural reform, while its economic and social system has undergone tremendous change. "We had a very significant percentage of our business interests being run by State-owned companies", he said.

In 1991, 280 companies were State-owned and today there are only 30. Even in the context of sub-Saharan Africa's economic performance, Zambia's economic decline has been extreme. Real GDP per capita is estimated to have decreased more than 50 per cent since 1970. Zambia was a relatively rich country in the 1960s and 1970s, and it was during the 1970s that its "fortune started going wrong". Declining prices in copper--Zambia's main export--and reduced mineral exports pushed economic collapse. Import cost problems compounded the situation, destroying that country's fiscal position and plunging the economy into a crisis. "By the 1980s our problems became quite serious and we had to engage international financial institutions, such as the World Bank and the International Monetary Fund (IMF),to resolve those problems", Dr. Mpuku affirmed.

The situation improved during the early 1990s as a result of several policy shifts. In 1991, a new multiparty democratic government introduced a series of major economic reforms designed to transform the Zambian economy. A set of structural and institutional reforms was initiated, including reforms of agricultural marketing, a large privatization programme and reforms to the public sector. These policies were intended to stimulate growth, but Zambia's economic performance in the 1990s was disappointing, with GDP growth decreasing, driven by substantial declines in the mining, quarrying and manufacturing sectors. More troubling was the decline in certain social indicators. School enrolment dropped and the number of malnourished children and the under-five mortality rate rose substantially.