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Comment by mailarchis | Hacker News Reader

I guess this is the core reason

"It’s easy to paint all of the problems in Zambia with this brush, to talk about kleptocrats wringing their privilege for as much income, as many perks, as they can squeeze. But even if Zambia was run by a coalition of charitable technocrats and Mormon philanthropists, that wouldn’t solve the most fundamental problem of all: There simply isn’t that much money to go around. In 2011, Zambia spent a total of $4.3 billion running itself. Stretch that to cover every man, woman, and child, and it amounts to just $325 per person per year. That amount—less than a dollar per person per day—has to cover education, health care, infrastructure, law enforcement, foreign debt … everything."

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so.... the reason they are poor is that they don't have a lot of money?

I'm not an expert in economics, so maybe someone with a better understanding can weigh in.

But what I think the writer is trying to say here the economy (value of the total goods produced which is reflected in money circulated) is too small to support the population of zambia.

I would say that is not a very interesting answer. When asking why people are poor, the answer, "because the economy is small," makes about as much sense as, "because they are poor." It doesn't add any information.

Why is the economy small? Answers like, "because they are poor," are forbidden.

But it's true. What do the poor typically lack? Financial buffer to afford to take risks, resources to build business and industry, and savvy to trade and compete with wealthier players on a level playing field. It plays out in persistently poor regions of wealthy countries too.

Perhaps the problem is with the question, not the answer. The Zambian economy has been growing fairly nicely recently, according to Google the GDP growth in 2012 was 7.3%.

A more useful question would be: was the growth of Zambian economy slow historically? If yes, why?

Zambia was a relatively wealthy place in Africa around independence, but the economy relied almost exclusively on copper, which is one of the most volatile commodities around. The pseudo-socialist government led by Kaunda helped unify the country but also drove the economy into the ground by providing massive subsidies all around and failing to create institutions to support long-term growth. The economy declined massively through 70s and 80s. Impending bankruptcy and structural adjustment programmes forced the government to pull back support, and then people protested and rioted to bring down the government and introduce multi-party democracy. The rebuilding process has been continuing (the first democratic handover of power happened a few years ago) and copper prices have been great, led by incredible demand from China.

The politics isn't perfect and economic diversification from mining is still only in it's infancy, but the trends are pointing in the right direction.

True.

Maybe, the small amount of money spend per person indicates that the government doesn't have sufficient money to invest in development of the infrastructure and human resources required for creating a developed economy.

If you look at South Africa's public debt, it is 43.3%[1] of their GDP. In contrast, Zambia's is 20%[2]. Maybe, what Zambia needs is to secure more loans from organizations like World Bank and invest

1 - http://en.wikipedia.org/wiki/Economy_of_South_Africa 2 - http://en.wikipedia.org/wiki/Economy_of_Zambia

>Why is the economy small? Answers like, "because they are poor," are forbidden.

Most Western economies grew larger by looting (the crusades, the Americas, Africa, Asia, black slaves, etc). Without this huge boost of stolen or acquired for pennies resources, slave labour, stolen land to build on, etc, they would not have funded their industrial revolutions and their subsequent prosperity.

Zambia, being poor and with little might, had nothing to loot. They got looted themselves, first by third party countries directly and then by their companies (and their pals they placed in power).

More than likely the problem is the same as in other poor African countries, as well as the Caribbean: Corruption.

Corruption saps a country of it's wealth, enabling a small minority to enrich themselves. My wife comes from a country that has never had any sort of war, yet is about on par with most west-African countries who have seen decades of war. When there's systemic corruption, encouraging any sort of investment is impossible, and wealth doesn't stay in the country.

The article itself has a very detailed, non-judgemental account explaining why most of the wealth produced in Zambia ends up in the Swiss bank accounts of foreign mining firms that have little incentive to reinvest it in Zambia.

I think the real reason is simply that corruption by multinationals allows them to get far better deal than they should :

"Many of the mining companies pay just 0.6 percent royalties to Zambia, far below the already-meager industry standard of three percent."

That's why they should NOT try to cover everything. Strategic investments. Infrastructure before law enforcement. Education before health care.

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