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Prospects for growth and poverty reduction i n Zambia, 2001-2015

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  • Lofgren, Hans
  • Thurlow, James
  • Robinson, Sherman

Abstract

"Zambia is one of the poorest countries in Africa. Despite substantial reform during the 1990s, the economy has remained heavily dependent on urban-based mining. Copper's long-standing dominance led to a strong bias against agriculture, which undermined the sector's growth and export potential. Consequently poverty has remained concentrated within marginalized rural areas. Recent volatility in copper exports and growing foreign debt indicate the need for further economic diversification and pro-poor growth. These needs have been clearly identified in the country's Poverty Reduction Strategy Paper (PRSP), which outlines a series of policy objectives aimed at combating HIV/AIDS, reversing the deterioration of education and rural infrastructure, and accelerating agricultural growth. This paper uses a computable general equilibrium (CGE) model to assess the potential impact on inequality and poverty of the key PRSP policies, as well as the effects of foreign debt forgiveness and changes in the copper sector. The findings suggest that, in the absence of very rapid growth, the pro-poor policies outlined in the PRSP will not enable Zambia to reach its Millennium Development Goal (MDG) of halving poverty by 2015. Achieving this goal will require gross domestic product (GDP) to grow at an annual rate of over ten percent. Reduction in poverty can however be achieved by addressing HIV/AIDS, which currently reduces annual GDP growth by one percent. Furthermore, substantial poverty-reduction can occur through the acceleration of agricultural growth, although limited market opportunities necessitates supporting investment in rural infrastructure. Overall, the potential of the agricultural sector depends on the government's commitment to reforms and the continued removal of the antiagricultural bias created by the dominant copper sector." Authors' Abstract

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Bibliographic Info

Paper provided by International Food Policy Research Institute (IFPRI) in its series DSGD discussion papers with number 11.

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Date of creation: 2004
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Handle: RePEc:fpr:dsgddp:11

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Keywords: Copper mines and mining ; Computable general equilibrium (CGE) ; HIV/AIDS Economic aspects ; agricultural sector ;

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References

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  1. Ravallion, Martin, 2004. "Pro-poor growth : A primer," Policy Research Working Paper Series 3242, The World Bank.
  2. Markus Haacker, 2002. "The Economic Consequences of HIV/AIDS in Southern Africa," IMF Working Papers 02/38, International Monetary Fund.
  3. Bigsten, Arne & Levin, Jorgen & Persson, Hakan, 2001. "Debt Relief and Growth: A study of Zambia and Tanzania," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  4. Pillai, Vijayan K. & Sunil, T. S. & Gupta, Rashmi, 2003. "AIDS Prevention in Zambia: Implications for Social Services," World Development, Elsevier, Elsevier, vol. 31(1), pages 149-161, January.
  5. Guy Scott, 2002. "Zambia: Structural adjustment, rural livelihoods and sustainable development," Development Southern Africa, Taylor & Francis Journals, Taylor & Francis Journals, vol. 19(3), pages 405-418.
  6. Jimenez, Emmanuel & DEC, 1994. "Human and physical infrastructure : public investment and pricing policies in developing countries," Policy Research Working Paper Series 1281, The World Bank.
  7. Löfgren, Hans & Robinson, Sherman & Thurlow, James, 2002. "Macro and micro effects of recent and potential shocks to copper mining in Zambia," TMD discussion papers, International Food Policy Research Institute (IFPRI) 99, International Food Policy Research Institute (IFPRI).
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Cited by:
  1. Edward F. Buffie & Manoj Atolia, 2008. "Trade Policy, Poverty, and Development in a Dynamic General Equilibrium Model for Zambia," Working Papers, Department of Economics, Florida State University wp2008_11_04, Department of Economics, Florida State University.
  2. Blasco, Lorea Barron & Devadoss, Stephen & Stodick, Leroy, 2006. "The Doha Round Declaration on Cotton: A Catalyst for Poverty Reduction in Africa?," 2006 Annual meeting, July 23-26, Long Beach, CA, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) 21161, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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