Posted on 13-5-2002
The
Poverty Free Market
During the 60s Zambia embarked upon a successful programme of
keynesian
welfarism and centralised import subsidizing industrialisation.
This
involved the state's heavy development of copper and textile
industries.
Literacy rates, life expectancy and employment had reached levels
far above
those achieved in most African nations by the mid seventies.
At the end of the seventies copper prices crashed. IMF economists
proposed
a loan to Zambia with which it could adapt its industries to
changing
global needs. The sceptical government was assured that copper
prices
would, in the long term, increase, allowing the easy repayment
of debt. The
increase in copper prices never came, leaving Zambia more reliant
than ever
on its heavily protected textile industry and struggling under
a burden of
debt. The IMF used the high level of debt to institute a structural
adjustment programme, forcing the Zambian government to slash
welfare
spending and remove trade barriers. The same trade barriers
that had been
protecting the textile industry.
First World poor are reativelty picky with the clothes that
they accept
from charities. Charities always have far more clothes than
they can
distribute. So when you or I put a sack of retired clothing
out for the
Salvation Army or a similar organisation, only a small proportion
of what
is given can be used by the group. Want to guess what happens
to the rest?
Its bought up at extrememly cheap prices by private traders
who sell it on
the lucrative third world market. These traders can expect mark
ups on the
clothes of up to 500%. Even then, the price at which the clothes
are sold
at is far cheaper than local produce.
Since the IMF forced the removal of protectionist trade barriers
in Zambia,
the textile industry has collapsed as the market is flooded
with cheap
clothes originating from first world charities. An estimated
30,000 jobs
have been lost and a vital industry worth $US60 million (about
4%of the
GNP) has literally disappeared. This is in a country where the
external
debt is now more than twice the GNP.
Go the free market.
Sources:
'Zambia reduced to a flea-market economy' the The Guardian Weekly
May 9-15
'Zambia' in New Internationist World Guide, New Internationalist
Publications, London 2001
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