When the price goes down....

Copper mining in Zambia

The Good Days:
when copper prices were high

In 1964, when Zambia became independent from Britain, it was one of the richest countries in sub-Saharan Africa. It had good farmland and a lot of natural resources, especially copper. 66% of Zambia's income from exports came from copper mining.

At that time, Zambia had a socialist government, which used this money to improve living conditions. It nationalised industries; it built schools, roads and hospitals; it subsidised health care, higher education and food. There were plenty of jobs, so it was easy for people to get work.

BECAME INDEPENDENT: when a country becomes independent, it stops belonging to, or being part of, another country

NATURAL RESOURCES: natural things, like minerals or trees, that people can use.

NATIONALISE (verb) when the government takes possession of an industry, so that it belongs to the country not private owners.

The Bad Days:
low copper prices and debt

Then, in 1975, the price of copper went down very fast. The government borrowed a lot of money from other countries: it hoped the price of copper would soon rise again and Zambia would be able to repay its debts.

However, the price of copper stayed low and Zambia's debts have grown larger and larger. In 1980, Zambia's external debt was $3.2 billion; in 1992 the debt had risen to $7.2 billion. Zambia had one of the largest external debts in the world.

Since 1992, the government of President Chiluba has been trying to reduce Zambia's debt through "restructuring" This means following an economic plan that: cuts public spending; takes away government subsidies; privatizes (sells) state-owned industries; opens up trade and financial markets. (Organisations like the World Bank and the IMF often demand that countries do this when they cannot repay their debts.) As a result, life for the people of Zambia has become harder and harder.

EXTERNAL DEBT: the amount of money that one country owes to other countries.

WORLD BANK has 178 member countries. It makes loans to countries for things like development projects. All member countries must also be members of the IMF.

IMF: International Monetary Fund, an agency of the United Nations

What happens to the people?
The life of Lefkata Jere

Lefkata Jere is 58 years old. He used to work as an electrician in a state-owned company, but the state sold the company to a private owner and Lefkata lost his job.

Now, like many other people in the area, Lefkata breaks limestone rocks into small pieces to make gravel that can be used by building contractors. It is hard physical work, and it pays very little. After working for a week, he may have enough gravel to sell for about $8.

Most people in the area sell anything they can, to try to make a living. Lefkata's wife sells a kind of fried food called fritters; his son goes from house to house recharging batteries. Only Lefkata's daughter has a steady job, as a pre-school teacher.

"We worry about hunger.
We're suffering a lot here," Lefkata says.

LIMESTONE: (noun) a kind of rock

GRAVEL:(noun) very small pieces of stone or rock

BUILDING CONTRACTORS: (noun) companies that are hired to make roads, buildings & so on.

RECHARGE: (verb) if you recharge a battery, you put new power in it

A few men control the price of copper

The price of 90% of the world's copper is decided by a group of men in London, thousands of miles away from Lefkata Jere and the people of Zambia.

The dealers on the London Metal Exchange don't use computers. They meet together. When a bell rings, they all start to trade, waving their hands and shouting. They can bargain for exactly five minutes. Then they must stop. The price they have agreed to, at that moment, is the price of copper around the world.

That price will affect the lives of thousands of people who live in poor copper-producing countries. And if the price goes down again, that's just too bad for people like Lefkata Jere.

DEALER: (noun) a person who trades on the world financial markets

BARGAIN (verb) to make deals about the price of something

Caught in a trap?

As one of the copper traders in London explains, poor countries like Zambia are in a trap and he sees no way out for them:

"Zambia doesn't have any alternative. If they want to survive, they have to export copper. They need the revenue. The tragedy is, the more [copper] they produce, the lower prices fall and the deeper they sink [into poverty and debt]. But if they don't produce at all, death comes much faster."

ALTERNATIVE: (noun) another choice, another option.

REVENUE (noun) income/money

Cancel the debt!

However, some activists see the situation very differently. People like Mulima Kufekisa Akapelwa, of the Catholic Church's poverty monitoring project, believe that there is an alternative for countries like Zambia - if the rich and powerful countries of the North are willing to cancel the debts of the poor countries.

"For six years Zambians have been asked to do without... But what sort of economic justice is it when those who can afford the least are expected to give to those who have the most?"

ACTIVIST: (noun) a person who takes action about a social or political problem

MONITOR: (verb) to watch something closely, and record changes & information about it