In the precolonial era, economic activity in most communities in what is now the Democratic Republic of the Congo was largely subsistence in nature, characterized by a varying combination of shifting cultivation, hunting, fishing, and gathering.
This pattern was consistent with the division of labour: at best, men played a small part in cultivating, usually cutting and burning forests or bushes before planting.
And both the Kazembe Kingdom and, later, the Luba Empire prospered due to their control of the ivory trade..[1] After the 1884-85 Conference of Berlin gave sovereignty of the region of the modern Democratic Republic of the Congo to King Leopold II of Belgium, he restructured the area's economy to suit his needs.
The colonial state concerned itself very little with such basic social needs as health care or education, which were provided by Christian missions, and to some extent by large concessionaire companies.
BCK was given mineral rights to 2 1 [clarification needed] million hectares in the area along the two main rail lines, from Matadi to Léopoldville (now Kinshasa) and from Port Francqui (now Ilebo) to the mining centers in Katanga.
[1] After World War II, government recognition of growing social discontent among the African population led to support for wage increases and to promoting the development of a Congolese middle class.
These reforms, however, were largely unsuccessful; at independence the economy was still primarily export-led, that is, geared toward the export of primary raw materials, and expatriates held most of the managerial and technical positions.
After political and civil order were restored following the rise to power of President Mobutu in 1965, the government of the Congo soon launched a comprehensive and ambitious attempt to achieve economic independence through nationalization.
After much wrangling with Belgian industrialists and the government, the Democratic Republic of the Congo and Gécamines agreed to a reimbursement plan, which included paying a percentage of its revenues to the former owners.
Justified by the doctrine of economic nationalism, the government undertook grandiose and ill-conceived projects based on copper and energy development, financed on terms unfavorable to the Democratic Republic of the Congo.
Zairianization, the expropriation plan announced in November 1973, represented both a combination of the nationalistic impulse for economic independence and personal aggrandizement for President Mobutu, who practiced a form of patrimonialism.
Zairianization created a vast pool of goods and money for distribution to loyal family members and to the political class, government and army officials.
[1] Expropriated property consisted of commercial buildings, light industry, and agricultural holdings, including a vast network of plantations, much it acquired by the president and held in partnership with Belgian interests.
Mobutu and the unproductive political elite sought debt relief from the eleven members of the Paris Club, the World Bank, and the IMF, as arrears mounted rapidly.
However, the changes and reforms required by the World Bank, the IMF, and other Western donors threatened the very basis of the elite's power — access to and free use of the nation's resources.
[1] Members of the Paris Club fitfully coordinated efforts to persuade Zaire to service its debts, control its expenditures, diminish corruption, and implement hard economic decisions.
Significant economic and financial imbalances including high inflation and a decline in per capita income gripped the country and turned Zaire into a beggar in the international marketplace.
Nonetheless, restrictive monetary and fiscal policies made it difficult for many firms to muster the deposit in local currency that the commercial banks required to open a letter of credit.
The trade regime was liberalized,[clarification needed] customs duties (a significant source of government income) revised, and external debt payments regularized.
Interest rates were deregulated, and controls on producer and retail prices were largely dismantled, though firms remained subject to a subsequent review by Zairian authorities to ensure compliance with legal profit margin limits.
Their actual opposition to the 1983 reform may have stemmed less from national pride than from the fact that the previously untouchable political elite was being made to pay taxes and duties and was being denied the economic privileges and access to resources for personal enrichment to which members had grown accustomed.
A structural adjustment program, including the commitment to contain budget deficits, narrowed the gap between the official and black-market exchange rate to 10 percent by April 1989.
As part of the 1989 reform, the government announced that it was taking steps to reduce the role of the public sector in the economy and to increase the efficiency of parastatals, and it produced a list of seventeen companies intended for partial or full privatization.
[1] The adoption in 1989 of a liberalized pricing policy and the removal of foreign-exchange restrictions eased conditions for importers and entrepreneurs, which in turn led to an increase in the range and availability of a variety of consumer goods in the Kinshasa market.
The country's currency continued to depreciate to new lows against the dollar (Z110 million = US$1 by December 1993), causing a demonetization of the economy and a breakdown of the banking system, as well as severe damage to Zaire's international competitiveness.
[1] Poor infrastructure, an uncertain legal framework, corruption, and lack of openness in government economic policy and financial operations remain a brake on investment and growth.
A number of International Monetary Fund (IMF) and World Bank missions have met with the new government to help it develop a coherent economic plan, but associated reforms are on hold.
Faced with continued currency depreciation, the government resorted to more drastic measures and in January 1999 banned the widespread use of American dollars for domestic commercial transactions, a position it later adjusted.
A number of IMF and World Bank missions have met with the government to help it develop a coherent economic plan, and President Joseph Kabila has begun implementing reforms.
Stage one of Phase II involved submitting laws for the Special Economic Zone, finding good sites for businesses, and currently there is an effort to help the government attract foreign investment.