Development Challenge Other Donors Activity & Budget Information Summary Tables Program Summary Strategic Objective Summary USAID Search: Zambia Previous Years' Activities 2001, 2000, 1999, 1998, 1997 Wednesday, 29-May-2002 18:52:51 EDT

Introduction

Zambia is a peaceful country that has never experienced civil conflict, war or a military coup. Power has been transferred through democratic elections. Zambia provided courageous leadership in championing majority rule in the region. More recently, it has taken a leading role in mediating regional conflicts in both Angola and the Democratic Republic of Congo.

In 1991, Zambia began a transition from a socialist regime to a market-oriented democracy, with impressive results. An ambitious program of economic liberalization has removed all price controls, subsidies, and restrictions on private-sector participation in the economy. A complementary privatization program, a model for other countries in the region, has helped to transform the economic landscape, generating new foreign exchange and enabling major new investments and employment. The privatization process is not yet complete, although the long-awaited sale of the state-owned copper mines has finally been achieved. Continued compliance with an enhanced structural adjustment program enabled Zambia to access the World Bank's Heavily Indebted Poor Country initiative in 2000. Zambia has also made positive strides toward democracy since 1991; multi-party politics now is the accepted norm.

Despite these positive developments, much remains to be done. Per capita income deteriorated from $320 in 1999 to $273 in 2000 due to slow economic growth. Seven out of ten Zambians live on less than a dollar a day, and one in five adults is infected with HIV/AIDS. Spreading the benefits of the economic reform program throughout society will be a challenge. Rightly, these challenges are the first priority of both the Government of the Republic of Zambia (GRZ) and USAID.

Finally, although landlocked, Zambia's location is pivotal for the long-term growth and stability of the region. Key regional transport corridors cut across the country. A rich endowment of natural resources offers great potential for exploitation and regional economic integration. Zambia is also a key player in the Southern African Development Community and the Common Market for East and Southern Africa. If Zambia stays on its reform program, the country could resume robust growth during 2001 and 2002. The benefits of Zambia's economic success will be felt throughout the southern Africa region.

The Development Challenge

Zambia is a large country with good soil, water, rich natural resources and hard-working citizens. Unfortunately, Zambia still is trying to overcome the legacy of socialism, which left the country with inadequate infrastructure, poorly developed human resources, and a debt of almost $8 billion. Cyclical droughts, low productivity of rain-fed agriculture, and a high human disease burden, especially the HIV/AIDS pandemic, add further challenges.

The GRZ has policies in place to address key issues. A national road sector reform program has made progress in rehabilitating infrastructure. The privatization of the mining sector has led to new investments in ancillary industries in the copper-producing region. Reorientation within the health and education sectors is placing more responsibility for these services at the community level. Proposals contained in Zambia's Poverty Reduction Strategy Paper are addressing the needs of the poorest Zambians. Agriculture activities are encouraging local farmers to cope more effectively with bad weather years and to benefit from export opportunities. Similarly, the opening of the political process and other democratic governance issues have advanced significantly since 1991. These and other positive changes have been supported by the international donor community.

Regrettably, much of the positive impact of these changes is offset by the devastating impact of the HIV/AIDS pandemic. With one in five adults infected, the ravages of the disease on all elements of society are increasingly apparent. There are some signs of success in the response to the crisis, particularly in the adolescent and young adult age groups, but the overwhelming and long-term nature of this threat continues to require priority attention.

Zambia possesses the ingredients for success. There are both domestic and external markets for Zambian products, and the country is on a path toward sustainable development, as demonstrated by the strong successes of non-traditional agricultural exports and the privatized assets of the large parastatal copper mining company. Sound policies are essential for Zambia to reach its potential, and USAID has encouraged and supported Zambia's reforms.

Other Donors

Although international donors have been satisfied with Zambia's progress in technical fields, they have also been concerned with governance issues associated with the flawed 1996 elections, with events in the wake of a failed coup attempt in late 1997, and the slow pace of the privatization of the economically important copper mines. Donors resumed much of the balance of payments assistance after the mine sale was concluded in 2000. Overall, development assistance to Zambia increased by 4.6% in 2000. The World Bank continues to be the principal multilateral donor, followed by the United Nations agencies and the African Development Bank. In 2000, USAID was the third largest bilateral donor, after the United Kingdom and the Netherlands. Other key donors include the Nordic countries, the European Union, Germany and Japan. Donors meet frequently to discuss concerns, set priorities and coordinate approaches.

FY 2002 Program

USAID programs will increase participation among rural farmers and entrepreneurs in the economy, leading to improved living standards. Activities in the rural sector will have a direct impact on incomes. In the education and health sectors, USAID focuses on increasing earning capacity and quality of life through improved basic education and better health. In the democracy/governance area, USAID programs increase citizen involvement in the decision-making process, giving Zambian citizens more influence on the economic and political climate affecting their lives.

USAID focuses on the highly important role that rural farm and non-farm enterprises and groups of agricultural producers play in increasing rural incomes. USAID supports activities such as helping rural groups identify new business opportunities, more effectively manage their natural resources, including promoting drought-resistant foods, and improve access to new technologies and markets as well as to rural finance. USAID also provides advocacy training and entrepreneurial skill development for small- and medium-sized rural enterprises. As an integral element of these efforts, USAID seeks to lessen Zambia's internal and external barriers to private trade and investment.

Dramatically shrinking domestic resources and increasing numbers of school-age children have led to a serious deterioration of the quality of basic education in Zambia. USAID supports more equitable access to quality education and learning for Zambian children, especially children at-risk, including orphans. Improvements in basic education have broad benefits for the nation. Investments in better gender-balanced educational policy planning, management information systems, and student health and nutrition have been developed in close coordination with the GRZ and other donors. The government is beginning to implement new solutions to the problem of how to provide high-quality basic education at a reasonable cost.

The slow but steady deterioration of Zambia's health care system over the past two decades has been particularly striking. The HIV/AIDS infection rate is estimated at 20 percent of the adult population, with serious implications for the labor force and productivity. Due to the AIDS pandemic, life expectancy dropped from 50.1 years in 1980 to 37 years in 1999, according to the U.S. Bureau of the Census, and continues to drop further. In order to improve the health status of the population, USAID assists the GRZ's innovative health care decentralization process. Working within that system, USAID focuses on an integrated approach to improving infant and child health (including AIDS orphans), reducing maternal and child mortality, helping with family planning for those who request it, and controlling the spread of AIDS.

The multiparty elections in 1991 were a turning point for reform in Zambia, as a liberalized political environment became the stimulus for economic reform. Political developments in recent years have revealed some of the difficulties in effecting a sustained socio-political transition. The national and presidential elections scheduled for late 2001 will present another challenge to breaking with autocratic rule and overcoming the lack of transparency and accountability in governance. USAID's strategy for democratic governance is primarily directed toward supporting more opportunities for broader popular participation in the political process, including increased public debate, accountable governance, improved functioning of the rule of law and more effective operation of the judicial system.

Activity Data Sheets

• 611-001, Increased Rural Incomes of Selected Groups
• 611-002, Improved Quality of Basic Education for More School-Age Children
• 611-003, Increased Use of Integrated Child and Reproductive Health and HIV/AIDS Interventions
• 611-004, Expanded Opportunity for Effective Participation in Democratic Governance

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