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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

Suggested Citation

  • Lofgren, Hans & Thurlow, James & Robinson, Sherman, 2004. "Prospects for growth and poverty reduction i n Zambia, 2001-2015," DSGD discussion papers 11, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:dsgddp:11
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    References listed on IDEAS

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    1. Markus Haacker, 2002. "The Economic Consequences of HIV/AIDS in Southern Africa," IMF Working Papers 02/38, International Monetary Fund.
    2. Bigsten, Arne & Levin, Jorgen & Persson, Hakan, 2001. "Debt Relief and Growth: A study of Zambia and Tanzania," WIDER Working Paper Series 104, World Institute for Development Economic Research (UNU-WIDER).
    3. Ravallion, Martin, 2004. "Pro-poor growth : A primer," Policy Research Working Paper Series 3242, The World Bank.
    4. Guy Scott, 2002. "Zambia: Structural adjustment, rural livelihoods and sustainable development," Development Southern Africa, Taylor & Francis Journals, vol. 19(3), pages 405-418.
    5. Löfgren, Hans & Robinson, Sherman & Thurlow, James, 2002. "Macro and micro effects of recent and potential shocks to copper mining in Zambia," TMD discussion papers 99, International Food Policy Research Institute (IFPRI).
    6. Pillai, Vijayan K. & Sunil, T. S. & Gupta, Rashmi, 2003. "AIDS Prevention in Zambia: Implications for Social Services," World Development, Elsevier, vol. 31(1), pages 149-161, January.
    7. 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.
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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 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 21161, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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    Keywords

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

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