I’m an economist and my day job involves
figuring out how societies develop and
that’s an important question as you can
imagine because with development comes
lots of interesting outcomes or outcomes
that we care about with development when
development occurs it means people can
live longer when development occurs it
means less infants die before the age of
one with development it means less
mothers died during childbirth so
development is something worth thinking
about and we’re spending one’s life’s
work doing so what I’m going to try to
do today is try to talk about
development in the context of Zambia so
how does Zambia sort of match up when it
comes the conversation of development so
where does ambien feature in this
conversation of development and it will
turn out that the razorblade that I have
you have up there on the screen it’s
going to be an important part of the
story the story about development
particularly with reference to Zambia ok
so what do economists know about
development it turns out that for
development to occur the structure of
the economy has to change there has to
be some structural transformation so the
economy has to move from relying less on
agriculture or primary commodities to
relying more on manufacturing and it
turns out that this is what drives
development so let me give you some
examples of countries within the last
hundred years that have developed or in
the process of developing and let’s look
at what has happened to the structure of
their economies so let’s look at this
thing called structural transformation
remember structural transformation is
what drives development so let’s start
with Japan a country that most of us are
familiar with we use their gadgets most
of the time so the slide on the screen
there shows the percentage of Japan’s
economy that is contributed by
manufacturing so the share of
manufacturing in Japan’s economy from
1955 all the way up to 2005 what you can
see is that manufacturing has been a
steady about 30 percent of the economy
30 percent of the gross domestic product
and we all know that Japan developed at
least as a chip developed state
within the last hundred years now let’s
add Korea to the story another country
so this is the Republic of Korea of
South Korea’s sometimes referred to a
country that we’re all familiar with we
all have some songs Daewoo’s Sundays and
all that South Korea has phenomenally
transformed its economy of the last 60
years right so look at the pattern of
structural transformation in South Korea
in 1955 10% of South Korea’s economy was
manufacturing but look at how
phenomenally South Korea’s increased the
importance of manufacturing in his
economy by the Year 2005 manufacturing
was about 30% of South Korea’s gross
domestic product South Korea’s economy
and it’s not surprised at South Korea
today is in the League of the most most
developed countries let’s look at China
another country that’s developing with
before our eyes within our lifetime so
within the last 30 years China has
become a force to reckon with what’s
happened to manufacturing in China so in
1955 about 15 percent of China’s economy
was manufacturing and this rose up
steadily and it’s now at about 40
percent so 40 percent of China’s economy
is manufacturing again it’s not
surprised that China is in the Lee is
almost joining if it hasn’t joined
already the League of the most developed
countries let’s look at India right so
another country that’s sort of
developing is sort of a force to reckon
with it’s part of what’s called the
BRICS Brazil Russia India and China so
what has happened to structure
transformation in India not as
impressive as the other countries so
it’s 10% in 1955 and that ends up at
about 20% in 2005 right so structural
transformation seems to be very
important driver of development what
about where we are right now in Zambia
the Green Line is Zambia story well it’s
sort of a bittersweet story right
in 1955 we’ll almost have no
manufacturing as one can imagine and
then we get independence and
manufacturing shoots up quite
impressively so in nineteen nineteen
fifty-five manufacturing is almost
nothing in Zambia when it shoots up
right after independence it rises
impressively reaches about 70 percent in
the 70s and 80s then
begins to go down again suddenly and
ends up a 10% of gross domestic product
right so it ends up a 10% of gross
domestic product ends up right at the
part that with South Korea began in 1955
so we had some structural transformation
it wasn’t sustained and then it went
away and this partly explains why we our
incomes are low remember you need
structural transformation to drive
incomes so let’s look a little bit more
at Zambia so that’s really the the graph
that you had on manufacturing so it just
shows you the trends in manufacturing so
what has happened in Zambia what has
happened in zombies that sadly whoa
in a way suddenly Agriculture’s become
much more important what should happen
is that a structural transformation
takes place agriculture should become
less important and manufacturing must
become more important so agriculture is
the orange line so agriculture has
become much more important and then
manufacturing has become less important
services which is the gray line has also
become super important what should
happen in a process of development is
that you first of all start with
agriculture agriculture shrinks
manufacturing becomes big manufacturing
shrinks and then services takes over but
what we have done is seems we have
jumped the gun we’ve gone all the way
straight to services and that’s not good
for development what this means is that
the country really needs to engage in
structural transformation what this
means that time there really needs to
industrialize way to rise right that’s
the important key point but the question
is how do we do that what’s the most
sensible way of industrializing so the
point I’m going to argue is that our
strategy for industrialization for
industrializing should depend on our
people right it should depend depend on
our most important resource which is our
people but we need to figure out what
our people’s capabilities are right so
let’s look at schooling right let’s take
the let’s look at schooling what does
schooling look like in Zambia what’s the
profile of schooling looks like in Japan
from 1960 up to – to 2010 so in 1960 the
average Japanese had about 7 years of
schooling and then by 2010 20 to 12
years of schooling so phenomenal
increase in schooling outcomes Korea
it’s the same story schooling steadily
rising from 3 years of schooling in 1960
to about twelve years of schooling in
2010 so the average Korean had has about
had about 12 years of schooling in 2010
what about China similar trade stories
training upwards India similar story
training upwards but not so impressive
what about Zambia where do we lie so
remember the important thing is that our
human resource is what’s going to drive
industrialization this is what the
profile of schooling looks like in
Zambia so in 1960 they average Zambian
at about two years of schooling then in
2010 most of you in this audience will
be shocked
they average Zambian had only completed
seven years of schooling right so the
folks in this room are the exception
very educated most people have not
completed primary school so most people
have just completed primary school seven
or seven years of schooling and this is
just counting the raw number so this is
counting you finished grade 1 grade 2
grade 3 grade 4 grade 5 and so on
but we know that finishing grade 7 at
for instance at Lake Road it’s not quite
the same thing as finishing grade 7 at a
government school right so if you adjust
for the quality of schooling it’s most
likely that the average Zambian has
finished much less than 7 years of
schooling so let’s look at schooling in
Zambia and much more detail so we know
that the average Zambian has completed 7
years of schooling what does it look
like for women so women have completed
that they’ve been training upwards quite
impressive but it’s still not where it’s
supposed to be so the average woman has
completed about somewhere between 5 or 6
years of schooling and the average man
has completed about more than just just
slightly more than 7 years of schooling
of course this is not great for equity
purposes we need to narrow this school
attainment gender gap what does it look
like in terms of location so in in urban
Zambia the average Zambian has completed
about 10 years of schooling so it looks
slightly better in urban Zambia in rural
Zambia it’s slightly a little bit worse
so it’s about 6 years of schooling again
I’m just counting the raw numbers of
schooling
given that our most important resource
in driving industrialization is going to
be our people and we know that our
people are still in the process of
acquiring skills they’re not where
they’re supposed to be so we have to
work with
we have right so what are the
implications in terms of a
industrialization strategy of the
figures I’ve just given you does this
mean we can do pharmaceuticals certainly
not right so we can’t have an
industrialization strategy that’s based
on manufacturing pharmaceutical drugs
for instance dummy to manufacture
pharmaceutical drugs you need super
educated people well still no way to
getting educated so we have to work with
what we have
does it mean we can assemble cars
certainly not right so seven years of
schooling is not great to assemble cars
which sort of tried it we had a car
assembly plant in Livingstone in the
counter era and it didn’t sort of
sustain itself and I perhaps the
argument I would make is that part of
that was the fact that we have low human
capital attainment in in the country
does that mean we can make microchips
certainly not if we can’t make from a
surgical drugs we can make cars selling
we can make microchips right so what can
we do right so now it turns out that
this is the government’s strategy on
industrialization it’s really a strategy
that assumes a highly educated
population so if you read for instance
the strategy paper on industrialization
and job creation
they have in there things like
pharmaceuticals right we’re going to
develop a strategy around for masu to go
so can I develop a strategy around
complex engineering projects but I argue
that whereas that is desirable it’s not
attainable given the constraints we have
to work with so what can we do hence the
razorblade
let’s start simple why don’t we think
about making razor blades right let’s
try to make sure that every razor blade
that’s used in a Zambian household is
manufactured locally that is simple
enough right so if somebody has got
seven years of schooling it is possible
to sort of have them work in an inner in
an industrial setup where you can make
razor blades you can make pencils you
can make matchsticks right and certainly
something that were very good at work
with furniture and make chairs and try
to export those so this is a strategy
that I refer to as a trade Kings
inspired strategy right everybody
remembers ever knows who trade Kings is
today but in the mid-1990s straight King
started very simply right they said with
making boom a very simple
boom detergent paste very simple product
does
require lots of human capital inputs
into it and over time they have learned
and experimented and now they make
washing powder and I was pleased to
learn the other day that they actually
make washing powder that you can use in
washing machines so this is a very neat
strategy a strategy that’s modest humble
you start simply with given what you
have and you work your way up towards
complexity so let’s start simple
let’s make razor blades and then over
time we’ll make cars thank you so much [Applause]
figuring out how societies develop and
that’s an important question as you can
imagine because with development comes
lots of interesting outcomes or outcomes
that we care about with development when
development occurs it means people can
live longer when development occurs it
means less infants die before the age of
one with development it means less
mothers died during childbirth so
development is something worth thinking
about and we’re spending one’s life’s
work doing so what I’m going to try to
do today is try to talk about
development in the context of Zambia so
how does Zambia sort of match up when it
comes the conversation of development so
where does ambien feature in this
conversation of development and it will
turn out that the razorblade that I have
you have up there on the screen it’s
going to be an important part of the
story the story about development
particularly with reference to Zambia ok
so what do economists know about
development it turns out that for
development to occur the structure of
the economy has to change there has to
be some structural transformation so the
economy has to move from relying less on
agriculture or primary commodities to
relying more on manufacturing and it
turns out that this is what drives
development so let me give you some
examples of countries within the last
hundred years that have developed or in
the process of developing and let’s look
at what has happened to the structure of
their economies so let’s look at this
thing called structural transformation
remember structural transformation is
what drives development so let’s start
with Japan a country that most of us are
familiar with we use their gadgets most
of the time so the slide on the screen
there shows the percentage of Japan’s
economy that is contributed by
manufacturing so the share of
manufacturing in Japan’s economy from
1955 all the way up to 2005 what you can
see is that manufacturing has been a
steady about 30 percent of the economy
30 percent of the gross domestic product
and we all know that Japan developed at
least as a chip developed state
within the last hundred years now let’s
add Korea to the story another country
so this is the Republic of Korea of
South Korea’s sometimes referred to a
country that we’re all familiar with we
all have some songs Daewoo’s Sundays and
all that South Korea has phenomenally
transformed its economy of the last 60
years right so look at the pattern of
structural transformation in South Korea
in 1955 10% of South Korea’s economy was
manufacturing but look at how
phenomenally South Korea’s increased the
importance of manufacturing in his
economy by the Year 2005 manufacturing
was about 30% of South Korea’s gross
domestic product South Korea’s economy
and it’s not surprised at South Korea
today is in the League of the most most
developed countries let’s look at China
another country that’s developing with
before our eyes within our lifetime so
within the last 30 years China has
become a force to reckon with what’s
happened to manufacturing in China so in
1955 about 15 percent of China’s economy
was manufacturing and this rose up
steadily and it’s now at about 40
percent so 40 percent of China’s economy
is manufacturing again it’s not
surprised that China is in the Lee is
almost joining if it hasn’t joined
already the League of the most developed
countries let’s look at India right so
another country that’s sort of
developing is sort of a force to reckon
with it’s part of what’s called the
BRICS Brazil Russia India and China so
what has happened to structure
transformation in India not as
impressive as the other countries so
it’s 10% in 1955 and that ends up at
about 20% in 2005 right so structural
transformation seems to be very
important driver of development what
about where we are right now in Zambia
the Green Line is Zambia story well it’s
sort of a bittersweet story right
in 1955 we’ll almost have no
manufacturing as one can imagine and
then we get independence and
manufacturing shoots up quite
impressively so in nineteen nineteen
fifty-five manufacturing is almost
nothing in Zambia when it shoots up
right after independence it rises
impressively reaches about 70 percent in
the 70s and 80s then
begins to go down again suddenly and
ends up a 10% of gross domestic product
right so it ends up a 10% of gross
domestic product ends up right at the
part that with South Korea began in 1955
so we had some structural transformation
it wasn’t sustained and then it went
away and this partly explains why we our
incomes are low remember you need
structural transformation to drive
incomes so let’s look a little bit more
at Zambia so that’s really the the graph
that you had on manufacturing so it just
shows you the trends in manufacturing so
what has happened in Zambia what has
happened in zombies that sadly whoa
in a way suddenly Agriculture’s become
much more important what should happen
is that a structural transformation
takes place agriculture should become
less important and manufacturing must
become more important so agriculture is
the orange line so agriculture has
become much more important and then
manufacturing has become less important
services which is the gray line has also
become super important what should
happen in a process of development is
that you first of all start with
agriculture agriculture shrinks
manufacturing becomes big manufacturing
shrinks and then services takes over but
what we have done is seems we have
jumped the gun we’ve gone all the way
straight to services and that’s not good
for development what this means is that
the country really needs to engage in
structural transformation what this
means that time there really needs to
industrialize way to rise right that’s
the important key point but the question
is how do we do that what’s the most
sensible way of industrializing so the
point I’m going to argue is that our
strategy for industrialization for
industrializing should depend on our
people right it should depend depend on
our most important resource which is our
people but we need to figure out what
our people’s capabilities are right so
let’s look at schooling right let’s take
the let’s look at schooling what does
schooling look like in Zambia what’s the
profile of schooling looks like in Japan
from 1960 up to – to 2010 so in 1960 the
average Japanese had about 7 years of
schooling and then by 2010 20 to 12
years of schooling so phenomenal
increase in schooling outcomes Korea
it’s the same story schooling steadily
rising from 3 years of schooling in 1960
to about twelve years of schooling in
2010 so the average Korean had has about
had about 12 years of schooling in 2010
what about China similar trade stories
training upwards India similar story
training upwards but not so impressive
what about Zambia where do we lie so
remember the important thing is that our
human resource is what’s going to drive
industrialization this is what the
profile of schooling looks like in
Zambia so in 1960 they average Zambian
at about two years of schooling then in
2010 most of you in this audience will
be shocked
they average Zambian had only completed
seven years of schooling right so the
folks in this room are the exception
very educated most people have not
completed primary school so most people
have just completed primary school seven
or seven years of schooling and this is
just counting the raw number so this is
counting you finished grade 1 grade 2
grade 3 grade 4 grade 5 and so on
but we know that finishing grade 7 at
for instance at Lake Road it’s not quite
the same thing as finishing grade 7 at a
government school right so if you adjust
for the quality of schooling it’s most
likely that the average Zambian has
finished much less than 7 years of
schooling so let’s look at schooling in
Zambia and much more detail so we know
that the average Zambian has completed 7
years of schooling what does it look
like for women so women have completed
that they’ve been training upwards quite
impressive but it’s still not where it’s
supposed to be so the average woman has
completed about somewhere between 5 or 6
years of schooling and the average man
has completed about more than just just
slightly more than 7 years of schooling
of course this is not great for equity
purposes we need to narrow this school
attainment gender gap what does it look
like in terms of location so in in urban
Zambia the average Zambian has completed
about 10 years of schooling so it looks
slightly better in urban Zambia in rural
Zambia it’s slightly a little bit worse
so it’s about 6 years of schooling again
I’m just counting the raw numbers of
schooling
given that our most important resource
in driving industrialization is going to
be our people and we know that our
people are still in the process of
acquiring skills they’re not where
they’re supposed to be so we have to
work with
we have right so what are the
implications in terms of a
industrialization strategy of the
figures I’ve just given you does this
mean we can do pharmaceuticals certainly
not right so we can’t have an
industrialization strategy that’s based
on manufacturing pharmaceutical drugs
for instance dummy to manufacture
pharmaceutical drugs you need super
educated people well still no way to
getting educated so we have to work with
what we have
does it mean we can assemble cars
certainly not right so seven years of
schooling is not great to assemble cars
which sort of tried it we had a car
assembly plant in Livingstone in the
counter era and it didn’t sort of
sustain itself and I perhaps the
argument I would make is that part of
that was the fact that we have low human
capital attainment in in the country
does that mean we can make microchips
certainly not if we can’t make from a
surgical drugs we can make cars selling
we can make microchips right so what can
we do right so now it turns out that
this is the government’s strategy on
industrialization it’s really a strategy
that assumes a highly educated
population so if you read for instance
the strategy paper on industrialization
and job creation
they have in there things like
pharmaceuticals right we’re going to
develop a strategy around for masu to go
so can I develop a strategy around
complex engineering projects but I argue
that whereas that is desirable it’s not
attainable given the constraints we have
to work with so what can we do hence the
razorblade
let’s start simple why don’t we think
about making razor blades right let’s
try to make sure that every razor blade
that’s used in a Zambian household is
manufactured locally that is simple
enough right so if somebody has got
seven years of schooling it is possible
to sort of have them work in an inner in
an industrial setup where you can make
razor blades you can make pencils you
can make matchsticks right and certainly
something that were very good at work
with furniture and make chairs and try
to export those so this is a strategy
that I refer to as a trade Kings
inspired strategy right everybody
remembers ever knows who trade Kings is
today but in the mid-1990s straight King
started very simply right they said with
making boom a very simple
boom detergent paste very simple product
does
require lots of human capital inputs
into it and over time they have learned
and experimented and now they make
washing powder and I was pleased to
learn the other day that they actually
make washing powder that you can use in
washing machines so this is a very neat
strategy a strategy that’s modest humble
you start simply with given what you
have and you work your way up towards
complexity so let’s start simple
let’s make razor blades and then over
time we’ll make cars thank you so much [Applause]
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