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Zambia and the IMF

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Zambia's Economic Promise
A Letter to the Editor
By Abdoulaye Bio-Tchané
Director, African Department
International Monetary Fund
The Washington Post
May 7, 2002

The April 22 front-page story on the effect of used clothing imports in Zambia distorted that country's recent history. As Zambia's minister of finance said at a press conference in Washington recently, "The world is a better place with IMF and World Bank than without." Yet the article gives no indication why a Zambian would say that.

Much of Zambia's economic troubles from the 1970s through the '90s reflected not liberalization but poor economic policies and inept management of the dominant state-owned mining company. Zambia almost invariably flouted, rather than followed, International Monetary Fund advice. The result: near hyperinflation and economic stagnation, along with trade protection that discouraged exports. This is really what was behind the demise of the Zambian textile industry.

Zambia's vastly improved economic prospects come not from a new protectionism but from economic policies designed to encourage production and investment. New exports such as floriculture and horticulture are growing, and tourism is accelerating. For the first time in recent history, per capita incomes have risen for two consecutive years and inflation has fallen substantially. The current government's "New Deal," with its increased attention to social concerns, is taking place with the advice and financial support of the IMF.




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