Nationalization and the Displacement of Development Policy in Zambia

Abstract

In this article it shall be argued that the Zambian government's decision to nationalize its only major industry—large international copper companies—undermined the government's major development objectives toward the mining industry. By taking majority ownership of the copper corporations, the government inadvertently modified its original policy objectives and shifted toward the policy objectives of the copper companies. The force behind the government's impetus for change in its policy orientation did not come from Zambian administrators who supposedly became bourgeois, nor did it develop as a result of an increase in the power of the mining companies. Rather the government's participation in the companies institutionally linked governmental policy criteria with the criteria in use by the mining corporations, measured more by profit margins and less by the social criteria of development and public welfare. Political leaders apparently thought that they could achieve their developmental goals through their control of the copper companies and could thus avoid making major public investments to achieve those goals. Leaders appeared to see the government's ownership of the copper companies as being a relatively cost free way to develop the country. Not only did this prove impossible, however, but when the copper industry experienced a financial crisis after 1975, the government as the major owner had to bear the financial burden of supporting the multinational corporations. One consequence of Zambia's nationalization of the copper industry, therefore, was to place the country deeply into debt simply to sustain the operations of a financially troubled international industry. This had the effect of forcing the government to suspend all major new development projects and to postpone its development plans for the country.