The role of planning on development of state sector

Abstract

Introduction provided by author:

Due to the fact that mining contribute huge sum to the country's foreign incomes, the state has put a lot of emphasis on this sector and controls about 61 percent in this sector while the remaining 39 percent is in the hands of local and trans-national corporations. With regard to other sectors, the state has established various parastatals which carry on economic activities on behalf of the state. The major state parastatals in Zambia is the Zambian Industrial and Mining Corporations (ZIMCO). The state has also established cooperative farms and marketing boards for Agricultural produces, Transport and Communications as well as major financial institutions. Health and education is provided free by the state. In the whole, the state controls about 80 percent of the economic activities through its parastal ZIMCO

All indications of development, particularly mining based industries, nanufacturing and agriculture based on state farms, social overheads and services are mostly found along the riverine areas, towns and along the railway line from Livingstone to the Copperbelt. As a result of that, there is a heavy immigration flow from other parts of the country to these areas resulting in high population density, housing and social problems in urban areas. Moreover, there is lapside and uneven development since these areas are develoned at the expense of the other areas

The main aim of this work is to show the importance of economic planning on the development of state sector in the national economy of the Republic of Zambia. Economic planning is essential for a country like Zambia which is one of the groundworks for economic and social evelopment. To effect development and realize national economic, social and cultural goals, planning and state sector are necessary. State sector can play a very important role in overcoming economic underdevelopment, provision of even development, just distribution of the national income, full control of national economy and provide efficient services to the people

Zambia recognizes the importance of economic planning and also the need for an expanded state sector. Right after independence in 1964, a transitional plan was introduced. In the following years the National Commission for Development Planning (NCDP) was established under the office of the President of the Republic and from 1968 a large state parastatals which later became to be known as ZIMCO was established to implement state economic policies

This work will therefore review the progress made through all the Zambian National Plans i. e. from the transitional plan 1964-1965, the First National Development Plan 1966-1970, the Second National Development Plan 1972-1976, the Third National Development Plan 1979-1983, and the Fourth National Development Plan just about to be introduced but abandoned and replaced by the Interim National Development Plan of July 1987 to December 1988 as a result of worsened economic crises

The work will be highly selective because its purpose is mainly to show how much the new independent government of Zambia was able to influence decisions affecting economic policies aiming at expansion and growth of state sector through development planning as a main weapon for socio-economic development and prosperity of the country. The work will also examine the underlying forces which in some cases hinder the execution and full implementation of development plans. This implies giving proper weight to geo-political consideration and to the difficulties in long distance to ports in neighboring states which sometime force a moral and political choice rather than economic for Zambia

During the pre-independence era, the mode of production was predominantly capitalistic. And a country being a crown colony whereby development plans were made in London, state sector was little in scope and catered mainly for the interest of colonial powers, regional and international multinational corporations. Industries were not existing with the exception of raw materials extracting ones, roads and railways were designed to transport raw materials for export rather than processing them inside the country. The whole economy was designed to depend mainly on the minority ruled countries of South Africa, former Rhodesia and Portugal ruled Mozambique. This was a plan of imperialists dream of creating a lasting domination of the Zambian economy thereby undermining its national independence and sovereignty

I have divided this work into three chapters. In Chapter I, I will deal with population distribution, natural resources, distribution of national income and the main sectors. Those factors will lead to understanding the characteristics of the Zambian economy. We would be able to know how many people live in that coutnry, where they live, their main economic activities and the resources available as well as how the national cake is shared

In Chapter II, I will present various development theories and plans, definitions and identification of the type of development theory and plans used in Zambia. There will be a brief presentation of state sector and its role in the socio-economic development of the country. Due to financial difficulties facing most developing countries including Zambia, some plans are realized with outside financial and capital assistance. It becomes relevant, therefore, to briefly look at the roIe of foreign capital in Zambian economy. Zambia produce mostly what she herself does not consume. It is for this reason that I have decided to pay attention to international trade and how import-export policies are influenced by financial planning as well as foreign trade planning. It is vital for any nation willing to advance economically to have a national plan which ensure proper control of financial and foreign trade. Hence, Zambia could not be an exception in this regard

In Chapter III which is the last one, I will present an evaluation the Zambian Development Plan. I will try to examine if these plans were realized fully, how much the state sector was expanded and the way the state has gained control of the national economy

The obstacles facing the economic development will be dealt with, giving special attention to the political changes in the neighbouring states which has always been violent and has been affecting in no small way the economic development of the country, especially in the areas such as destabilization, economic sanctions and transport expenses

The ruling party in Zambia, the United National Independence Party (UNIP), advocates a socialist economic system for Zambia. I will therefore examine the developments and economic policies of the party and see if development plans have been in accordance with the party policies. I will end this Chapter with a brief look at the international economic crises and its effect on Zambia, especially the problems of debt, high interest rates on loans and hard conditions forced on countries willing to obtain loans from the International Monetary Fund (IMF). Zambia experimented the IMF conditions of economic recovery for three years, and decided to do away with the IMF early 1987 because of the state of economic affairs which has continued to deteriorate as a result of IMF advices

In Chaoter III which is the last one, I will present an evaluation the Zambian Development Plan. I will try to examine if these plans were realized fully, how much the state sector was expanded and the way the state has gained control of the national economy