BEST OF BOTH WORLDS

Zambia 2014 | DIPLOMACY | REVIEW: DIPLOMACY

Zambia is embracing its rich past and cosmopolitan foundations to attract international interest and play an important role in the region.

President Michael Sata and Zambia's Ministry of Foreign Affairs racked up the miles in 2014, bolstering the country's diplomatic standing and forging new ties around the world. After 50 years of stability, Zambia has been at the forefront of diplomatic initiatives in the continent. For Zambia, stability implies the kind of continuity that diplomats prize and investors covet. Germany's Ambassador to Zambia, Bernd Finke, stressed this dynamic, pointing out that economic relations between the two countries go back as far as 1966 when a bilateral Investment Protection Treaty was signed. Throughout its history, Zambia has enhanced its ties around the world, such as by inking a strategic partnership with the EU, playing a prominent UN role, and bolstering long-lasting cooperative relationships with countries like Norway and India. Relations with China have also taken a turn for the better.

Closer to home, cooperation with Angola was enhanced in 2014 through new investment and cooperation agreements. Zambia and Angola signed a Memorandum of Understanding (MoU) in 2014, which lays the groundwork for a railway system that will connect the two countries' mining regions. Since Zambia is landlocked and home to only around 15 million people, diplomacy is an essential precursor to enhanced trading. Despite the country's impressive track record, some health and economic indicators are worrying. However, Zambia is still a relatively new country, and if the current growth trajectory holds, economic and healthcare performance will respond to the rapid development.

Diplomatic ties are inextricably linked to history, and shared experiences of colonialism have made India and Zambia close partners, since before the African country gained its independence in 1964, when Dr. Kenneth Kaunda became the country's first president. Confirming British fears that other colonies would seek to emulate the Indian independence movement, Dr. Kaunda and other leaders of the Zambian freedom struggle drew inspiration from India's struggle, in particular from Mahatma Gandhi. After assuming the presidency, Dr. Kaunda went on to visit India more than 10 times, starting in 1967. But even prior to independence, a significant community of expatriates from India established residences and businesses in Zambia under British colonial rule. Over the years, this community has emerged as an integral part of Zambia's business community, civil society, and politics.

This complex mutual history has translated into significant economic and social cooperation between the two countries. In addition to headline-grabbing statistics such as Vedanta's $2.2 billion investment in the Konkola Copper Mines, dozens of other Indian firms are investing millions into Zambian industries that are expected to play a significant role in the country's economic development. By linking itself to the world's 10th largest economy (according to IMF statistics), Zambia is in a position to overcome its current economic and geographic constraints. In 2012-2013, India's exports to Zambia stood at $243 million while imports from Zambia were at $226 million for the same time period. Meanwhile, interest continues to grow among Indian investors. When Zambia held the 48th annual Zambia International Trade Fair in Ndola in 2012, some 30 Indian companies were in attendance, representing industries such as solar power, mining, and cosmetics.

Zambia's diplomatic footprint is also well established in Germany, where the African country has continued to be one of Germany's key co-operation partners with relations that range from development cooperation, culture and politics, to business. Starting with a bilateral trade agreement in 1966, the German private sector has honed in on opportunities in Zambia that include mining, agriculture, infrastructure development, and much more. Amatheon Agri is the first major German investor in the country, and an agribusiness and farming company developing and operating sustainable agri and food projects in Sub-Saharan Africa, which operates on more than 30,000 hectares of land within the region. While critics of global agribusiness operations in Africa warn of a tragedy of the commons, and widespread displacement of traditional farmers, German firms strive to be a constructive presence in the region. Beyond turning a profit, Amatheon Agri focuses on poverty reduction, universal education, combatting HIV/AIDS, and ensuring environmental stability.

For Japan, Zambia plays a central role in its African development strategy. As China's footprint grows—to the tune of 100,000 Chinese nationals and 500 companies—Japan is flexing its diplomatic muscles as well. Currently, Japan has over $32 billion committed to funding development in Africa, and in June 2014, the acting president of Zambia Wynter Kabimba met with a Japanese delegation that included Prince Akishino to discuss Zambia's role. Zambia also participated in the inaugural Japan-Africa Business Forum in June 2014, where the theme was, “Succeeding in Africa: Unlocking Growth & Opportunities." In addition to presentations, the Zambian team showcased investment opportunities in front of Japanese business executives and investors.

China's presence in Zambia has taken on a controversial dynamic of late; however, recent diplomatic overtures and economic success stories have reduced tensions and it seems that the two countries have embarked on a path of mutual growth. In fact, according to country specialists, when Fitch upgraded Zambia's credit rating to B, the decision was predicated on improving relations with the Chinese business community. In 2013, President Sata even visited China, where he participated in the Boao Forum for Asia (BFA). Of the 25 heads of state in attendance, only President Sata and Abdelkader Bensalah of Algeria represented African states, indicating the importance of Zambia for China's African development strategy. By late 2013, Chinese investment in Zambia had already surpassed the $2.5 billion mark. As industrial parks come online in 2015, this level of financing is expected to increase significantly. At the same time, China is helping Zambia tackle electricity shortages with a $2 billion hydroelectric project, part of which will add 750 MW of capacity to the national grid when it comes online in 2017.

Zimbabwe is also an important partner in international organizations, such as the Southern African Development Community (SADC), which aspires socio-economic cooperation as well as political and security cooperation among 15 southern African states. In 2013, Zambia ratified the SADC protocol calling for free movement between member states. Increased travel will be facilitated by SADC transport corridors, such as bridges and enhanced roads that will enable transport and trade, especially with landlocked countries in Africa's interior such as Zambia.

The more economically oriented Common Market for Eastern and Southern Africa (COMESA) aims to, “be a fully integrated, internationally competitive regional economic community with high standards of living for all its people ready to merge into an African Economic Community." With 19 member states, a population of over 389 million, an annual import bill of $32 billion, and an export bill of $82 billion, COMESA forms a major market place for both internal and external trading that allows member states to overcome the hurdles faced by smaller individual markets. Zambia has been an important member of this group since it joined in 1994 as a founding member. Membership has allowed Zambia access to partnerships with Australian mining firms in conjunction with the Democratic Republic of the Congo. An MoU signed by COMESA Secretary General Sindiso Ngwenya and Western Australian Premier Colin Barnett in Lusaka established a framework for cooperation that covered mineral and petroleum resources, agriculture, vocational training, and capacity building. As Zambia interfaces with the international community at a state and institutional level, the country is emerging as a growing economic force in the region. To sustain this progress, Zambia must continue to embrace its transnational perspective and multicultural past, in line with the cosmopolitan objectives of the men and women who established the nation half a century ago.