Announcement of Consultative Group for the Republic of Zambia on June 30, 1978

FOR IMMEDIATE RELEASE •World Bank mm 1-1 Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE June 30, 1978 CONSULTATIVE GROUP FOR THE REPUBLlt OF ZAMBIA The following announcement was issued on Thursday, June 29, 1978 at the World Bank's European office in Paris: A first meeting of the newly formed Consultative Group for Zambia was held in Paris, from June 27 to 29, 1978, under the chairmanship of Mr. Willi A. Wapenhans, Wor1d Bank Regional Vice President. Attending the meeting were delegations representing Canada, Finland, the Federal Republic of Germany, France, l~aly, Japan, The Netherlands, Norway, Sweden, the United Kingdom, the United States, Yugoslavia, the African Develop- ment Bank, the Arab Bank for Economic Development in Africa, the Corrrnission of t'he European Economic Communities, the European Investment Bank, the Interna- tional Monetary Fund, the Saudi Fund For Development, the United Nations Develop- ment Programme. Observers from Austria, Romania and OECD/DAC were present. • The delegation of Zambia was led by the Honorable John M. Mwanakatwe, Minister of Finance, and included the Honorable J.M. Lumina, Minister for Develop- ment Planning. The participants reviewed the current economic situation and development prospects and discussed the Government's resource requirements and ongoing .stabilization program. The meeting received reports from the Government, the International Monetary Fund and the World Bank on Zambia's prolonged economic cr1s1s. The meeting noted that this crisis was caused primarily by Zambia's overwhelming dependence on copper, which continues to suffer from d~pressed price levels. The meeting also noted that the heavy costs to Zambia of the closing of the border with Southern Rhodesia in keeping with the relevant United Nations resolutions, factors outside the Government's control relating to the unsettled conditions in neighboring countries and the disruption in the ~egional transpor- tation network had exacerbated Zambia's d?fficulties. The group reviewed the adverse impact that the current shortages of spare parts and raw materials, owing to the reduced·availability of foreign exchange, have had on the economy's prqductive capacity. It further noted the short-run meas4res taken by the Government to deal with this situation. The group received an outline of the ~overnment's long-term diversificatior prog.·a~ which will be implemented in the forth~eo~tgg Third National Devel0pmen~ Plan. The Consultative Group discussed statements on the agriculture and transport sectors, presented by the Government of Zambia and the World Bank, and a repo~t • given by the UNDP on technical assistance. The meeting noted the central role agriculture will play in Zambia's future development and the associated external resource and technical assistance needed to carry out the proposed programs. In reviewing landlocked Zambia's external transport problems, the group acknowledged the seriousness of the existing situation which threatens the flow of essential exports and imports.  - 2 - The meeting agreed that Zambia needs and deserves the support of the international community in order to help it meet essential short-run require- • ments, and, at the same time, initiat~ a long-term program of economic diversification. The participants.declared .their general Intention to support iambi a 'in its present difficulties as well as In Its efforts to implement a development program designed to dfversify the economy. The participants welcomed the Initiative taken by the Government of Zambia and the World Bank In establishing the e.onsultative Group, especially as it was felt the group could provide for better coordination, planning and deployment of technical assistance and financial resources. The ~onsultative ~roup agreed to consider a second meeting to focus on Zambia's long-term development requirements after the Government's Third National Development plan, presently under preparation, has been finalized. • •