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Comment by jamesaguilar | Hacker News Reader

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.

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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).

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