The contagion effect of global recessions generally spread very fast with deeper negative economic impacts experienced in developing economies like Zambia. However, the reverse or fortunes of a turn-around take several years to positively affect poor economies. The Asian financial crisis of 1997/98 is one case where stock markets crashed simultaneously and investment inflows plummeted within nine months but full recovery took more than five years. And this recovery was aided by the huge capital support by multilateral financial institutions and the US government. In this case, the economies that are supposed to offer Zambia some financial bail out are looking inwardly because they are the worst affected.

The seeming glimmer of hope of recovery in the US is too minimal to translate into global economic recovery; and this is only seen in some price rises for certain stocks. The supply side is still struggling with unaffordable bank finance despite the interest rates flatting at zero percent. The demand side is still very weak making it very difficult for manufacturers to appreciate the impact of stimulus packages.

The recovery of the Zambian economy will largely depend on the performance of the motor industry that considerably consumes our copper products. Most of these companies such as General Motors are under-going intensive restructuring programmes owing to challenges of bankruptcy. I do not see them recovering in the next twenty four months. Worse still, even when these industries recover, the price of copper on the global market is still dampened by speculators, believed to be from China. It is this speculation that has made economists forecast continuing instability and weakening of the price of copper.

Given this background, it is important for Zambia to focus on its internally generated recovery efforts. The local manufacturers for example can exploit the current Kwacha depreciation to compete against foreign imports while the exporters should be able to increase their exports; targeted at regional markets whose demand is still reasonably high. One example is Zambian Breweries where we have lately increased our investments owing to the high prices of imported soft drinks and beer beverages.

Iam aware of many other manufacturing companies that have in the past few months, since the depreciation of the Kwacha, increased their investment outlay as Zambian consumers now find locally produced goods a little cheaper. The diversification efforts currently underway should be implemented speedily by way of committing huge budgetary and private sector resources in identified areas. In other words, recovery should be stimulated from within and the fiscal policy of the government can act as the catalyst.