Lusaka. February 19, 2015.
Honorable Minister, Members of the AmCham Board, Ladies and Gentlemen,
Good evening and welcome. I will be brief so we can get quickly to our guest of honor tonight – and so that she can get quickly to the British Chamber of Commerce’s launch tonight. We wouldn’t want to step on their moment right at the outset.
My older son, 13, asked me an interesting question the other day – why is Zambia poor. It shouldn’t be: abundant resources, good soil, one of the world’s great climates. And some may argue that it is not really poor – that it is a middle income country. But 60 percent of the Zambian people live on $1.25 a day according to the World Bank. So there is a lot of poverty. Why? And perhaps more to the point, what is to be done about it?
I would argue that it is largely a question of policy choices. Without rehashing the debates over socialism or capitalism, it seems clear that private sector driven economies do better than those with heavy state involvement. And also that countries that are open and democratic do better than more authoritarian systems where corruption can flourish in the absence of accountability.
Zambia has embraced a private sector economy in recent years. It has also become increasingly democratic. As we so in this last, extremely close election, the Zambian people are committed to democracy – and also to peace, to stability, and to reconciliation. And Zambia has reaped the fruits of that stability and those policy choices – ten plus years of solid economic growth. GDP has doubled once and is in the process of doubling again. And yet there is still widespread poverty. The answer, I think, lies in more of the same: continued adherence to democratic values and even more business-friendly policies.
Zambia should in particular strive to improve its World Bank Ease of Doing Business rating – it is currently 111; 55 seems like a good target. This will attract more investment, both foreign – including American — and domestic, leading to greater growth, which in turn will lead to more investment. A virtuous circle if you will, which – most importantly – will generate jobs for Zambia’s poor.
Better polices will not only lead to greater growth now, in the short run, but will also position Zambia to benefit when Africa becomes, as it will in the not too distant future, THE emerging market and a principal driver of global growth.
Zambia can be an African Tiger but to achieve that bright future it needs to lay the foundations now.
Better economic policies are not, however, just about tax rates, and interest rates and the like. Companies do not simply want “cheap” labor; they want workers who are well-educated and well-motivated. That they can train and that they can trust — to work hard and to work honestly. And who are healthy. So the right education and health policies are also needed to ensure that when Africa becomes the world’s growth leader in coming decades; Zambia is positioned as the best place to do business in Africa.
I have laid out what I think is a bright economic future for Zambia, one that is within reach. I’d like to talk now, for a moment, about your role in helping achieve that bright future. The ACC can and should play a critical role lobbying the government; acting as an advocate for the right policies that we’ve been talking about. And in doing so, you will always have this Embassy’s support.
So in closing, let me tell you how I answered my son: I said simply – Zambia will not be poor for very much longer.