Zambia, Malawi, Mozambique, Madagascar, Seychelles, Comoros, Mauritius, Angola, Namibia, South Africa, Swaziland, Zimbabwe, Lesotho, and Botswana
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geography and statistics for the region.
of the Region
Southern Africa was populated in early times by numerous tribes that did little trade among themselves as they were self-sustaining, cattle herding being the most significant resource. By the 600¡¯s A.D., there were several centralized kingdoms, and some trade was established across the Indian Ocean to India and the Middle East. By the mid 1600¡¯s, the Dutch had established a trading post at the Cape of Good Hope and begun to move inward, and some trade with Europe was established. The native kingdoms were able to hold off the Dutch advance for two centuries, but when the British seized control of the area from the Dutch in the early 1800¡¯s, the picture changed dramatically. The natives were able to maintain control for some time, but with the discovery of diamonds and the world¡¯s largest gold deposits, the British were quick to take control of the area. Because of the strain the two World Wars put on the British economy, Britain was forced to abandon her holdings in Southern Africa, and the nations became independent again. Unlike other regions of Africa, the country known as South Africa had a large white population due to the gold and diamond rushes, and this country was industrialized, leading to a prosperity and economic stability greater than the surrounding nations. Countries in this region are not industrialized with the exception of South Africa, and are therefore not very globalized in that they export much more than they import, but remain poor due to heavy borrowing and debts. The main exports from the area are gold, minerals, and agricultural products to nations around the world including the U.S., Germany, Japan, and other European nations.
Many of the countries in the southern part of Africa remain poor no matter even after reform. Zambia is one; even after privatization and budgetary reform, Zambia¡¯s economy remains below the 5 to 7% needed to get rid of poverty. A lot of the money Zambia gets (Gross Domestic Profit) comes from copper mining exports. Through privatization of that, there has been a spur of economic growth. Nonetheless, low mineral prices have slowed the benefits of privatizing mines and have reduced incentives for further private investment in the sector. Malawi, nearby country, ranks among the world¡¯s least developed countries. It has been approved by the World Bank and by the International Monetary Fund for the Heavily Indebted Poor Countries (HIPC) program. In 2002, the World Bank also approved a $50 million drought recovery package which is to be used for famine relief. The government¡¯s current platform is to develop and diversify its economy. One of the biggest problems the country faces is eradicating disease such as HIV/AIDS.
Mozambique, another southern country, is also one of the poorest and least developed countries in the world. Most of the country employs people in the agriculture industry, and recent reforms have boosted the economy significantly. Most of the debt that needed to be repaid has been reduced mainly though forgiveness and rescheduling under the IMF's Heavily Indebted Poor Countries (HIPC) and Enhanced HIPC initiatives, and is now at a manageable level. The IMF and the World Bank have also helped in Madagascar, where they are leading reforms for liberalization and privatization of industry. Still, agriculture remains a quarter of the national Gross Domestic Product. Recently, in 2002 there was a separatist political crisis that undermined macroeconomic stability.
Growth in Seychelles, an Indian archipelago, has been led by the tourist sector which employs 30% of the population. Thus, it has been affected many times by wars, causes downturns in the local economy. Other issues facing the government are the budget deficit, including welfare costs, and further privatization of enterprises. Another adjacent island is Comoros. Comoros is one of the world¡¯s poorest countries. Agriculture, fishing, hunting, and forestry contribute about 40% to the Gross Domestic Profit. The biggest internal conflict is the political disputes: the government is struggling to upgrade education and technical training, struggling to privatize industry, and struggling to diversify exports and promote tourism.
Mauritius, unlike some other African nations, has been able to maintain and increase its economic strength by a lot. It¡¯s main economic policy has been foreign investment. Mauritius had attracted over 9,000 offshore entities, many aimed at commerce in India and South America. Mauritius, has also taken advantage of the Africa Growth and Opportunity Act (AGOA). The current strategy by the government is to encourage information technology investment. Unlike Mauritius, Angola has an economy that is in disarray (mainly because of the continuous warfare the country had been in). Agriculture provides for about 85% of the workforce. Even still, much of the countries food must still be imported. Inflation in the country still remains in the 100 to 200% range. The International Monetary Fund has gotten involved and suggested a modest move of increasing foreign exchange reserves and promoting greater transparency in government spending.
Namibia is heavily dependent on the exportation of natural resources. Mining accounts for about 20% of the Gross Domestic Profit. Namibia is the fourth largest exporter of non-fuel minerals in Africa and the fifth largest producer of uranium (plus it produces lead, zinc, tin, silver, and tungsten). Nonetheless, more than half the population depends on subsistence farming. Much of the industries in Namibia are highly dependent on the South African markets. Of the nations in Africa, South Africa ranks among the most developed with financial, legal, communications, energy, and transport sectors that act to influence many other African nations. Growth, though, has not led to a decrease in the unemployment rate. Some of the problems associated with the South African market: the government is having control dealing with are high amounts of crime and a huge density of people infected with HIV/AIDS.
Swaziland, like many of the other African nations has about 80% of its population working in subsistence farming. Swaziland is highly dependent on South Africa to where it sends about nine tenths of its exports and receive two thirds of its imports. HIV/AIDS and drought are the most frequent problems besides a need for diversification of industry that Swaziland needs. Zimbabwe has huge economic problems including: deficit, overvalued exchange rate, soaring inflation, and lack of products (too little supply for too much demand). They have also wrongly invested their time in the war in the Congo which drained millions of dollars. They also have not been able to get money from the IMF because they couldn¡¯t meet budgetary requirements placed by the IMF. Recent reforms, such as the land reform program, have also crippled the economy (the land reform program made 400,000 people lose jobs).
Lesotho, as a mountainous region, relies primarily on the remittances from miners and on customs duties from the South Africa Customs Union for the majority of government revenue. The government has made recent moves to strengthen its tax system, though. Two sectors that the government is looking to replace the customs fees with are the agriculture and manufacturing sectors. The majority of the economy is primarily based on subsistence agriculture and the distribution of income remains a major drawback. Lesotho has signed an Interim Poverty Reduction and Growth Facility with the IMF. Botswana, on the other hand, has maintained one of the largest growth rates in the world since its independence. Diamond mining and tourism are the two leading sectors. Nine tenths of the export earnings is earned through diamond mining. Nonetheless, unemployment is high (around 40% unofficially and 21% officially). Two major worries of the government are HIV/AIDS and the leveling off of diamond mining production.
Future and Beyond
A good majority of Southern Africa has experienced improvements in their economy. Zambia has impressive urbanization and efforts to privatize have been somewhat successful. There is still room for growth, such as advancements in telecommunications and transportation, agriculture and tourism. They believe that diversifying their exports and putting and end to corruption will pave their way to success. Mozambique is classified as one of the poorest nations, but they have shown signs of growth in the last ten years, making them qualified for debt relief. The government predicts significant growth in the next five years, depending on the success of reviving the agricultural sector and continual economic reform. After a period of stagnation from 1991-1996, in 1997-2002 Madagascar displayed years of economic growth through foreign investment and a program of privatization from 1988-1993. As the IMF and World Bank predict about 8% growth in the next several years, Madagascar is also qualified for debt relief. They also seek more foreign investment, more education in more effective business strategies and an end to corruption. Seychelles¡¯s economy since its independence has been satisfactory with tourism and fishing. They are finding industrial fishing vital to their future, as well as an increase in agriculture to dissolve a dependency on imports. On the other hand, their tourism and agriculture is very sensitive to external factors, such as weather. Mauritius is deemed as one of the strongest economies in Africa with a steady growth of about 6% for the last twenty years in three main stages: sugar, textiles and finally tourism and financial services. They do realize that relying on these sources cannot guarantee them continual success, so they are experimenting with information and communication technologies in addition to expanding their current sources of income. South Africa is in good standing with an established division of mining, agriculture and services. Trade liberalization and a greater tolerance to free markets has played a role in their development, but as they strive to increase privatization, unemployment is somewhat high and uneven incomes are distributed based on race. They have also shifted to platinum as an export opposed to gold. Swaziland is also one of the more thriving countries in Africa as small entrepreneurs are filling up the middle economic group. Mining in coal and diamonds, as well as tourism are playing key roles in their prosperity, but with an increasing population, they face the challenge to provide enough jobs for everyone. Lesotho, while practicing economy on the basis of agriculture and manufacturing, they also utilize their only notable natural resource: water. With the Lesotho Highlands Water Project (LHWP) in place since 1986 and funded by organizations such as the World Bank, African Development Bank and European Investment Bank, they store and deliver water primarily to South Africa and also are self-sufficient on hydroelectric power. They have shown an effective and beneficial practice of making the most of available resources. Botswana is a bright example of a successful country in Africa, with one of the fastest rates of growth in per capita income in the world (growth averaged about 9% during 1966-1999 per year), budget surpluses for most of the past thirteen years, no domestic debt and very little foreign debt. As the diamond and mining industry has brought much growth, tourism is becoming increasingly important. Transparency International 1999-2000 even ranked Botswana as the least corrupted country in Africa. With solid control over their industries, they are a promising example of advancing countries.
In the midst of the prosperity of Southern Africa, unfortunate nations still exist. Malawi¡¯s practice of agriculture and dominant subsistence farming is weak to world trade patterns and drought. In addition, poor infrastructure and telecommunications, corruption, and government restrictions on trade hold back Malawi from further progress. As a result, the government is doing its best to improve the infrastructure and install more private divisions in Malawi, but education and management of health are also hurdles they must overcome. Comoros, as one of the most destitute and least developed in the world, also relies on agriculture (subsistence farming) and somewhat in tourism and fishing. They too face infrastructure as a limitation. Angola¡¯s economy has recently grown quickly chiefly due to an oil boom and the diamond industry, but societal conditions are under fire. Angola¡¯s 27 years of civil conflict, widespread corruption and deficient economic supervision are their greatest cons. Other mineral sources besides diamonds are not even being developed with the overshadowing diamond business. Currently they are engaged in new IMF reform plans to make their use of the budget more efficiently. Namibia¡¯s economic integration into South Africa is essential to their way of life as 90% of imports are from South Africa and most of the exports are to South Africa. With subsistence farming and a small modern market area, they seek to diversify their economy beyond South Africa, perhaps toward Europe. Despite the overall impression of Southern Africa¡¯s economic progress, these countries have yet to reach the caliber of progress as their neighbors.
Southern Africa presents striking observations in patterns that may aid the struggling countries of the region. A general trend in the more successful countries is the management of the economy and the efficient use of available resources, as well as a willingness to explore more sources of wealth, but potent corruption is seemingly the largest adversary in economic success. This implies that the strength of the ruling institutions that govern the economic practices of the area plays a key role in the nation¡¯s success, as suggested by the Development Centre of the Organization for Economic Cooperation and Development (OECD). The policies installed by global corporations do not always prove to be the best, but the confrontation of the global market is inevitable. The OECD deems globalization as a form of economic reality in this day and age, but distinguish that countries respond differently to its presence, whether they choose to become involved or become spectators. It is suggested to strengthen the domestic front, namely infrastructure, economic policies and governing bodies, before attempting to engage into the global forum.
Did you know?
Zambia is about one-tenth larger than Texas
Malawi has two official languages, English and Chichewa
Madagascar is the world's fourth-largest island
Mozambique is almost twice the size of California
Seychelles consist of an archipelago of about 100 islands in the Indian Ocean
In 2002, a 30-year civil war ended in Angola, ensuring peace
South Africa has a judicial capital, but no official seat of government
Most of the nation of Botswana is covered by the Kalahari desert