Globalisation, poverty and inequality in Zambia during the 1990s

Type Working Paper
Title Globalisation, poverty and inequality in Zambia during the 1990s
Publication (Day/Month/Year) 2000
Zambia has undergone a dramatic transformation of economic policy during the 1990s. The election in 1991 of the Movement for Multi-party Democracy government saw the introduction of a series of major economic reforms designed to transform the Zambian economy from a relatively inward looking and state dominated economy to an outward oriented economy based upon private enterprise. A sharp stabilisation early in the decade was followed by reforms to open the economy to the rest of the world including exchange rate liberalisation, trade liberalisation and capital account liberalisation. In addition a set of structural and institutional reforms were initiated including reform of agricultural marketing, a large privatisation programme and reforms to the public sector. These policies were intended to stimulate growth. However the combination of major structural reforms with falling copper prices and recurrent drought has resulted in disappointing macroeconomic performance. Between 1996 and 1998, despite economic recovery at the national level, the reduction in urban poverty and inequality has been small. In rural areas, drought devastated rural livelihoods in the early 1990s, while maize marketing reforms principally benefited those near the major urban centres, and hurt more remote rural farmers. Consequently there was little change in the overall poverty headcount for rural areas between 1991 and 1996 although there was a substantial reduction in rural inequality during this period. The rural sector experienced strong growth between 1996 and 1998 and this translated into a substantial reduction in poverty in rural areas between the two years.

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