^{Page 601 note 1} See Ministry of Development Planning and National Guidance, Second National Development Plan, January 1972–December 1976 (Lusaka, 1971), p. 93;Google Scholar and, for example, Sutcliffe, R. B., Industry and Underdevelopment (London, 1971), p. 103.Google Scholar

^{Page 601 note 2} Kreye, O., ‘The Myth of Development Decades’, in Die Dritte Welt (Meisenheim), II, 3, 1973.Google Scholar

^{Page 601 note 3} The ‘line-of-rail’ is the term commonly used in Zambia to refer to the agricultural and industrial developments, established in the colonial era, that stretch along the railway from the Copper Belt in the North to Livingstone in the South. Africans were removed from about 20 miles on both sides of the railway to make way for settler farmers. Cf. Barber, W. J., The Economy of British Central Africa: a case study of economic development in a dualistic society (Stanford, 1961).Google Scholar

^{Page 602 note 1} Source: calculated from Monthly Digest of Statistics (Lusaka), LX, 7, 07 1973,Google Scholar Table 54. There was some change in the system of national accounts in 1970 so the 1965 figures are not entirely comparable.

^{Page 602 note 2} A number of recent studies substantiate this point in considerable detail, notably L. van Horn, ‘The Agricultural History of Barotseland’, History Seminar No. 14, and Luchembe, C. P., ‘Rural Stagnation: a case study of the Lamba-Lima of Ndola Rural District’, History Seminar No. 17 University of Zambia, Lusaka, 1974.Google Scholar

^{Page 602 note 3} All statistics relating to the Zambian economy – unless otherwise cited – are in, or calculated from, the Monthly Digest of Statistics, July 1973.

^{Page 602 note 4} Chenery, H. B., ‘Patterns of Industrial Growth’, in American Economic Review (Providence, R. I.), 09 1960, p. 646.Google Scholar

^{Page 602 note 5} Value-added here refers to the gross value of the output of domestic manufacturers, minus the value of imported inputs, and the data in this section are from the Census of Industrial Production (Lusaka, 1966 and 1970).Google Scholar The beverages and tobacco industries produced about a third of the value-added in Ghana, where total manufacturing value was about the same proportion of G.D.P. as in Zambia, and about 15 per cent of value-added in Kenya, where manufacturing produced about 13 per cent of the G.D.P. Cf. Seidman, Ann, Comparative Development Strategies in East Africa (Nairobi, 1972), p. 23.Google Scholar

^{Page 603 note 1} These are discussed in more detail by Faber, Michael, ‘The Development of the Manufacturing Sector’, in Elliott, Charles (ed.), Constraints on the Economic Development of Zambia (Nairobi, 1971), pp. 301–7.Google Scholar

^{Page 603 note 2} The actual increase in real terms was probably considerably less, for official data indicate that prices of manufactured goods had risen about 40 per cent between 1966 and December 1972.

^{Page 603 note 3} The evidence to be found supporting this analysis appears in the Census of Production (Lusaka, 1965 and 1970); Monthly Digest of Statistics, July 1973, pp. 20 and 54; External Trade Statistics (Lusaka), 1970;Google Scholar and Second National Development Plan, especially p. 172.

^{Page 605 note 1} Extensive evidence has been gathered in Latin America, where the import substitution process was initiated in the Great Depression of the 1930s. Cf. U.N.E.C.L.A., The Process of Industrial Development in Latin America (Santiago), p. 29;Google ScholarKatz, J. M. and Gallo, E., ‘The Industrialization of Argentina’, in Veliz, C. (ed.), Latin America and the Caribbean. A Handbook(New York, 1968), p. 602;Google ScholarFrank, A. G., ‘Economic Dependence, Social Structure and Underdevelopment in Latin America’, 1969 typescript;Google ScholarMarario, S., ‘Protectionism and Industrialization in Latin America, in Economic Bulletin for Latin America (New York), 03 1964;Google ScholarLeff, N. H. and Netto, A. D., ‘Import Substitution, Foreign Investment and International Disequilibrium in Brazil’, in Journal of Development Studies (London), 04 1966;Google ScholarHirschman, A. O., ‘The Political Economy of Import Substituting Industrialization in Latin America’, in Qyarterly Journal of Economics (Cambridge, Mass.), 02 1968;Google Scholar and Furtado, C., ‘Industrialization and Inflation’, in International Economic Papers (London and New York), 12, 1967.Google Scholar This experience has also been repeated in other countries. Cf. Seidman, Comparative Development Strategies in East Africa, especially ch. VI; Soligo, R. and Stern, J. J., ‘Tariff Protection, Import Substitution and Investment Efficiency’, in Pakistan Development Review (Dacca), Summer 1965;Google ScholarDiaz-Alejandro, C. F., ‘On the Import Intensity of Import Substitution’, in Kykios (Basel), 1965;Google ScholarJohnson, H. G., ‘Tariffs and Economic Development: some theoretical issues’, in Journal of Development Studies, 10 1954;Google Scholar and Power, J. H., ‘Import Substitution as an Industrialization Strategy’, in Philippine Economic Journal (Manila), Spring 1967.Google Scholar The effect of the distorted distribution of income on import-substitution has been explicitly discussed by Lacroix, J. L., ‘Le Concept d'import substitution dans la théorie du développement économique’, in Cahiers économiques et sociaux (Kinshasa), 06 1965, p. 174;Google Scholar and by Sutcliffe, , Industry and Underdevelopment, pp. 267–8.Google Scholar

^{Page 606 note 1} The distribution of income in Zambia has been analysed by Seidman, Ann, ‘The “Have-Have Not” Gap in Zambia – or, What Happens to the Investible Surpluses Produced in Zambia?’, University of Zambia, Lusaka, 1973.Google Scholar

^{Page 606 note 2} See Consumer Price Index – Low Income Group. New Series, 1969 base (Lusaka), for a budget survey by the Central Statistical Office of 2,600 low-income households in the main line of-rail cities in Zambia which shows that the families of workers earning the average wage that year could not expect to get through the month without borrowing. The average rise in wages since that period has essentially been cancelled out by rising prices.

^{Page 607 note 1} An international business research publication, Prospects for Business in Developing Africa (Geneva, 1970), emphasises in discussing market strategies on p. 39Google Scholar that ‘many companies that want a piece of the long-term action are now establishing African “beachheads”. This danger is aggravated to the extent that foreign managers of importing firms seek to maintain the Zambian market for their overseas affiliates’ produce.

^{Page 608 note 1} See Sutdiffe, , Industry and Underdevelopment, p. 227,Google Scholar for the worst horror story of the import-substitution automobile ‘manufacturing’ industry is probably that of Chile where, by 1967, 19 firms had been established to assemble parts and materials to ‘produce’ annually 16,400 vehicles, although the economies of scale of integrated production dictated a minimum output of at least 1 00,000 vehicles! None of the firms could operate at capacity, the possibilities of backward linkages were thwarted, and the impact of the ‘industry’ in restructuring the economy to reduce its dependence on copper exports was nil.

^{Page 609 note 1} S. Geza and third-year Economics Students: oral report of research into causes of the decline of cotton output in Eastern Provinces, University of Zambia, Lusaka, 1972.

^{Page 610 note 1} A recent study of the 80 most successful businessmen in Lusaka showed that most were in retail trade and real estate. Almost none were engaged in manufacturing activities, other than simple repair shops, because of their lack of technical background as well as the larger amounts of capital necessary to establish modern industries. Beveridge, A. A., ‘Converts to Capitalism: the emergence of African entrepreneurs in Lusaka, Zambia’, Ph.D. dissertation, New Haven, 1973.Google Scholar

^{Page 611 note 1} Seidman, , ‘The “Have-Have Not” Gap in Zambia’, p. 11.Google Scholar

^{Page 612 note 1} Seidman, , Comparative Development Strategies in East Africa, p. 263.Google Scholar

^{Page 612 note 2} This would constitute about 21 per cent of all private investment, while about 52 per cent was expected to be in the mines. Second National Development Plan, p. 43.

^{Page 612 note 3} Ibid. pp. 197–304.

^{Page 613 note 1} Green, Reginald H., ‘Four African Development Plans: Ghana, Kenya, Nigeria, and Tanzania’, in The Journal of Modern African Studies (Cambridge), III, 2, 08 1965, pp. 249–79.CrossRefGoogle Scholar

^{Page 613 note 2} Cf. Seidman, Ann, ‘Alternative Development Strategies in Zambia’, Department of Economics, University of Zambia, Lusaka, 1973.Google Scholar

^{Page 614 note 1} Cf. Schaffer, Bernard B., ‘The Deadlock in Development Administration’, in Leys, Colin (ed.), Politics and Change in Developing Countries: studies in the theory and practice of development (Cambridge, 1969), passim.Google Scholar

^{Page 614 note 2} The information relating to Indeco, unless otherwise cited, is from its Annual Report, 1973 (Ndola, 1973).Google Scholar Zimco's holdings include: Mindeco, which until recently held the Government's shares in the copper mines, although these are now the direct task of the Ministry of Mines, apparently leaving Mindeco responsible only for the development of small mines; Findeco, responsible for the Government's financial holdings; the National Hotels Corporation, which looks after most of the Government's tourist facilities; and the National Transport Corporation, which handles the Government's transport interests.

^{Page 614 note 3} E.g. see Seidman, Ann, Planning for Development: problems and possibilities in sub-Saharan Africa (New York, forthcoming);Google Scholar also Kyesimira, Y., ‘The Public Sector and Development in East Africa’, Makerere Institute of Social Research Papers, 01 1968;Google ScholarCoast, Gold, Government Proposals in Regard to Future Constitution and Control of Statutory Boards and Corporations in the Gold Coast, Part 1 (Accra, 1956), especially p. 5;Google Scholar and Arthur D. Little, Inc., Tanganyika Industrial Development. A Preliminary Study of Bases for the Expansion of Industrial Processing Activities (Washington, U.S. Agency for International Development, 1961).Google Scholar

^{Page 615 note 1} Indeco, , Annual Report, 1973, p. 10.Google Scholar

^{Page 615 note 2} It might be noted that, even before the reforms, Indeco's assets were as large as those of Tanzania's National Development Corporation after the implementation of the Arusha Declaration; Kahama, George, ‘The National Development Corporation and the Industrialization Process in Tanzania’, Public Lecture, U.N.I.D.O. Seminar, 26 01 1969.Google Scholar By 1973, the assets of Indeco were about six times the size of those held by Tanzania's N.D.C.

^{Page 615 note 3} Second National Development Plan, p. 194.

^{Page 615 note 4} Ibid. p. 195.

^{Page 615 note 5} Indeco, , Annual Report, 1973, p. 4.Google Scholar

^{Page 616 note 1} Prospects for Business in Developing Africa, p. 55.

^{Page 617 note 1} Source: Indeco, , Annual Report, 1973, p. 40.Google Scholar The figures in parentheses indicate loss.

^{Page 619 note 1} To enable the People's Republic of China to aquire the necessary Zambian currency to finance the local costs of building the Tazara Railway, the Government agreed to facilitate the sale of Chinese goods. From Zambia's point of view, this merely meant the replacement of certain imports from another source, thereby enabling China to make a long-term loan for the railway which included the local costs of labour and materials.

^{Page 619 note 2} Most of the imports from Rhodesia in 1972 were in the form of hydro-electric power from the Kariba project, which had deliberately been constructed, before independence, on the Rhodesian side of the border.

^{Page 620 note 1} Data relating to composition of imports, unless otherwise indicated, are from the Central Statistical Office, External Trade Statistics (Lusaka), 1966–1970 series.Google Scholar

^{Page 620 note 2} Bank of Zambia. Report and Statement of Accounts for the Year Ended December 31st, 1972 (Lusaka, 1972), p. 39.Google Scholar

^{Page 621 note 1} Cf. Seidman, Planning for Development, ch. 18; see also Newlyn, W. T. and Rowan, D. C., Money and Banking in British Colonial Africa (Oxford, 1954).Google Scholar

^{Page 621 note 2} It was announced that the Government would acquire 51 per cent of the shares of the banks as part of the 1968–9 economic reforms, but apparently the negotiations for implementation broke down, and they remain entirely foreign privately owned.

^{Page 621 note 3} Zambia Daily Mail (Lusaka), 23 10 1973.Google Scholar

^{Page 622 note 1} Cf. C. R. M. Harvey, ‘Financial Constraints on Zambian Development’, in Elliott, op. cit. pp. 136ff.

^{Page 622 note 2} Ibid. pp. 125 and 133–5.

^{Page 622 note 3} Cf. Bostock, Mark and Harvey, Charles (eds.), Economic Independence and Zambian Copper– a Case Study of Foreign Investment (New York, 1971).Google Scholar

^{Page 622 note 4} Bank of Zambia, Report… Year ended December 31st, 1972, p. 36.Google Scholar

^{Page 623 note 1} One issue that requires further research is the extent to which the new Zambian top civil servants and parastatal managers, who receive salaries 27 to 50 times that of the minimum wage earners, consciously or unconsciously identify their own interests with those of the narrow high-income group which receives the bulk of the national income in Zambia itself, as well as the multi-national corporations which seek to capture the existing market for manufactured goods.

^{Page 624 note 1} This explanation might well be strengthened by a thorough examination of the evidence concerning the extent to which the emergent class of Zambians - who have since independence assumed control of the civil service and the parastatals - may in fact be pursuing policies of the type outlined above in its own perceived self-interest. This hypothesis is well formulated by van Arkadie, Brian, ‘Development of the State Sector and Economic Independence, in Ghai, Dharam P. (ed.), Economic Independence in Africa (Nairobi, 1973), especially pp. 108–12.Google Scholar Some of the theoretical aspects are further analysed in the same book by Saul, John S., ‘The Political Aspects of Economic Independence’, pp. 123–50.Google Scholar

^{Page 624 note 2} The possibilities of such an approach are discussed more fully by Seidman, Planning for Development, chs. 6 and 7.

^{Page 626 note 1} Summary data relating to two textile mills in Tanzania with the same output, but very different labour-capital ratios, are provided by the National Development Corporation, Third Annual Report, 1968 (Dar es Salaam, 1968), p. 55.Google Scholar

^{Page 627 note 1} It goes without saying that such possibilities would be greatly enhanced by co-ordinated planning and implementation of industrial development with neighbouring countries, but there is inadequate space here to discuss these. Cf. Green, Reginald H. and Seidman, Ann, Unity or Poverty? The Economics of Pan-Africanism (Harmondsworth, 1968),Google Scholar passim. Green also discusses the necessity for further research to realise these possibilities in ‘Economic Independence and Economic Co-operation’, in Ghai, op. cit. pp. 45–87.

^{Page 629 note 1} This argument is more fully developed by Seidman, , Planning for Development, chs. 3 and 4,Google Scholar and is increasingly emphasised by other academics: e.g. Holmquist, F., ‘Implementing Rural Development Projects’, in Hydén, Göran et al. , Development Administration: the Kenyan experience (Nairobi, 1970), p. 228,Google Scholar as well as in T.A.N.U. Guidelines, 1971 (Dar en Salaam, 1971), p. 9.Google Scholar In Zambia, participation is considered a fundamental tenet of Humanism; cf. Kaunda, Kenneth, Times of Zambia (Lusaka), 13 11 1973.Google Scholar The problem is to create the necessary institutional machinery and working rules so that the broad masses of the working people, the peasantry, and the unemployed, are increasingly involved in decision-making to ensure that the Zambian economy is, in fact, restructured in their interests.