Answer to Question #166048 in Economics for Manyela

Question

Globalisation is a phenomenon which has penetrated different countries in the world with several countries subscribing to trade and cross border investments drive. With the advent of globalisation, trade and cross border investments have been rolled out to the various countries in different disciplines. At the sametime, the investors have emerged from different countries of the world to appropriate locations in which they aim at providing goods and services. Globalization has been advanced by a number of global institutions such as the World Bank, IMF, 

International businesses or multinational businesses have taken advantage of using various modes of serving different markets in several respective countries where they operate in. Companies feel that it is not enough for them to trade in their own domestic or local markets and this is one motivation driving modern businesses to striving to production and export of products (and or services) into foreign or international markets in various countries.

Explain how Zambia has either benefited or not from being members of the World Trade Organization (WTO) which is one of the global institution. [40 Marks]

Answer 1

Over the past decade, Zambia continues to demonstrate high rates of economic growth, against a relatively moderate overall background of other states on the African continent. During this period, the country showed that such a negative impact on the global recession.

The main driver of growth is sustained impact on industries such as construction, energy, and transportation.

Zambia continues a steady course towards improving governance, democratization, and de-bureaucratization in the economy, strengthening and developing government institutions, improving policy, and increasing transparency in the banking and financial sector.

At the same time, a high level of poverty is maintained (up to 60% of the country's population lives below the poverty line) and unemployment. One of the most pressing challenges is providing youth work.

The most important factor in economic growth is the sustainable development of industry, mining, transport, and communications. And copper production continues to retain its traditional role as the main pillar of the economy, providing up to 70% of export earnings, in recent years, the observed growth in indicators of "non-traditional" exports. In the medium term, the main macroeconomic indicators are at a high level.

Investments in infrastructure development, primarily in the mining industry, energy and road construction, and in particular, large-scale investments within the framework of the five-year road infrastructure development, providing for the construction of 1,500 kilometers of roadway, will support the sustainable growth of the economy as a whole. An increase in government spending in infrastructure development, with over $ 5 billion in road construction projects, guarantees stable growth in the construction industry.

In socio-economic policy, the state will have to focus on the implementation of programs for ensuring employment of the population (primarily the government), improving the system of control and monitoring of the state, and the fight against corruption.

Among the first tasks of improving economic policy should be the development and implementation of measures to strengthen the competitiveness of the private sector, which are traditionally associated with expectations of higher wages and the demand for highly qualified forces, the supply in the country is still very limited.

Manufacturing provides the creation of only one-tenth of the GDP. Transport costs at the level of the final product (40% on average).

The food processing (Food and Beverage) sector provides more than two-thirds of the value-added in the manufacturing industry.

In general, the progressive growth in the industry over the past decade is associated with the relatively dynamic development of agribusiness, and, in particular, its industry - food (food and beverage) and tobacco industry, as well as with the growing demand of the construction sector in the sector of raw materials and materials. ...

Agriculture, from a socio-economic point of view, remains the most important sector of the economy, providing jobs for 60% of the total number of the informally employed population of about 4.9 million people in Zambia, and for 8% of all officially employed (total number of formally employed is 625 thousand people).

Zambia has vast mineral resources - metallurgical raw materials, primarily copper and cobalt, as well as zinc, lead, silver, and gold, precious stones, energy raw materials - coal, uranium. The country has a significant potential for hydropower resources, allowing not only to meet the energy needs of the economy but also to export electricity to the neighboring countries of the South African region (the current volume of generated energy is estimated at 2,200 MW, while the volume of domestic demand does not exceed 1,900 MW. Half of the total consumed in the country, energy comes from the country's extractive sector.