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Zaire Postindependence
The political turmoil that followed independence from
Belgium
in 1960 resulted in the collapse of civil administration
and severe
economic dislocations
(see The
Crisis of Decolonization
, ch. 1).
The rapid departure of Belgian administrators and
technicians left
government and industry in the hands of low-level cadres.
Vital
transportation facilities and trade services were
disrupted. Export
earnings declined. After political and civil order were
restored
following the rise to power of President Mobutu in 1965,
the
government of the Congo (as the country was then known)
soon
launched a comprehensive and ambitious attempt to achieve
economic
independence through nationalization. The largest
expropriation was
that of the Belgian-owned mining company, UMHK, and its
transformation into General Quarries and Mines (Générale
des
Carrières et des Mines--Gécamines). After much wrangling
with
Belgian industrialists and the government, Zaire and
Gécamines
agreed to a reimbursement plan, which included a
percentage of
revenues of the new company to be paid to the former
owners.
The government also promoted a series of development
programs
designed to transform a primarily agrarian economy into a
regional
industrial power. Zaire's enormous mineral wealth of
copper,
cobalt, gold, and diamonds was intended to serve as the
engine for
this transformation. The ultimate goal was ostensibly to
move the
economy to a stage of development comparable with that of
the
Western industrial powers. The new Congolese government
thus
expected to realize the early colonial aspirations for the
country
to be the breadbasket and principal industrial power of
Africa.
This strategy of industrialization was to be financed
through
external lending and was based on projections of increases
in
mineral prices, production, and sales. Justified by the
doctrine of
economic nationalism, grandiose and ill-conceived projects
based on
copper and energy development and financed on terms
unfavorable to
Zaire were undertaken. In 1967 the IMF concluded an
agreement with
the Congo for monetary and economic reform. The currency
was
devalued to control inflation, and the Congolese franc was
replaced
by the zaire (for the value of the
zaire--see
Glossary).
Within two
years, the reform program, combined with political
tranquility, a
rise in the price of copper, and increased exports, had
led to a
stable currency and an increase in foreign-exchange
reserves. Zaire
(as the nation was called from 1971) rode high on the
commodity
price boom of the early 1970s along with other primary
commodityproducing countries.
In retrospect, it appears that the economic and
financial
policies of this period were the result of both a desire
to
transform Zaire into an industrial power and to maintain
in power,
as well as enrich, what was to become the country's ruling
political and economic elite. As several observers have
noted,
Mobutu's authoritarian paternalism gave rise to rampant
corruption
incompatible with economic diversification and
development.
Regardless of the motives for the economic decisions of
the late
1960s and early 1970s, economic decline set in as grace
periods
expired on the enormous debt that the government had
incurred from
foreign governments, as well as international lending
agencies, to
finance its ambitious industrial development projects and
as the
neglect of transport and agriculture began to take its
toll.
The cost of living rose rapidly, while new foreign
borrowing
raised the nation's external debt from US$763 million at
the end of
1972 to US$3 billion by 1974. In November 1973, Mobutu
announced
measures to place all businesses in the hands of Zairians.
Data as of December 1993
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