Theoretical and Practical Implications of I.M.F. Conditionality in Zambia

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Abstract
Zambia has faced an economic crisis since 1975. Living standards for most of the population have deteriorated sharply, with falling real wages and a drop in G.D.P. per capita by about a quarter. At the same time, the gap between the high- and low-income groups has probably widened.Zambia's economic difficulties originated in international factors. In the two decades of independence, and unusually high degree of external dependency, inherited from the colonial era, continued to chatacterise the economy. Imported inputs accounted for at least one-third of all costs in mining and manufacturing, as may be seen from Table I. Meanwhile, the production of copper and relate minerals contributed a steady nine-tenths of export revenues. But in 1975, the terms of trade for copper plummeted by nearly 50 per cent, and merchandise imports promptly contracted by almost one-quarter, seriously affecting production. Since then the price of copper has stagnated.

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