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Year of truth beckons as JK battles anti-EAC suspicions

22nd January 2012
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It has been obvious that Tanzania’s position in the East African Community and especially its commitment to the common market project will be sorted out either soon enough or at least in the course of this year, on the basis of what is being noticed at the turn of the year.

President Jakaya Kikwete has found himself responding to queries from foreign diplomats as to his commitment to the project, while the Ministry of East African Community Affairs hasn’t always been as persuasive on commitment as most diplomats and regional watchers would have wished it to be, seemingly playing to a local gallery rather than regional stakeholders.

That is why diplomats had to approach JK to make some precisions on the subject, so that strategic clarity is gained and companies as well as sovereign states may know what to expect.

Talking to foreign envoys in the customary sherry party at the start of the year, the president was reported to be upbeat on regional integration and especially on prospects of a much wider free trade area grouping 27 countries, specifically the East African Community, the Southern Africa Development Community and the Common Market for Eastern and Southern Africa (EAC, SADC and COMESA respectively

This emphasis on being upbeat about the wider integration scheme did not remove the doubts as sections of the local media may appear to have comprehended but reinforced them, since it lays emphasis on a free trade area, which largely exists within the EAC zone. What this emphasis means is that Tanzania is ready to extend the ‘free trade area’ (implying customs union being extended) beyond the EAC zone, a non-issue.

In the first place this matter looks important to Tanzania because it refused to rejoin COMESA, where it withdrew from membership in order to protect a few manufacturing industries whose output would be eroded due to the wider market, and since then industrial growth in the country has faltered.

Tanzania’s industrial sector has remained more or less stable at eight per cent of the Gross Domestic Product, and the wider EAC zone has helped improve trade in plenty of things, like Tanzania selling grain across the border given the more intensive drought situation in Kenya as compared to Tanzania, while the northern part of the country (or a portion of it) has also faced acute repetitive droughts.

When it comes to manufactured goods, it is the Kenyan market that has significantly extended, while Uganda is a bit invisible.

On that note alone it is evident that the president was being evasive on the big issues, though both in his wider remarks as well as in precisions that the responsible minister, influential ex-Speaker Samuel Sitta has been  sought to wrap up Tanzania’s position in EAC integration agenda as similar to the other partner states.

The effort is to show that there is continuing discussion with some issues still being debated or on the table for completion of negotiation, instead of accepting that partner states are distraught at Tanzania’s immovable positions owing to a profound distrust for integration based on free movement of people, goods and capital, preferring free movement of goods alone. That is why Tanzania seems satisfied with the customs union, and next seeks infrastructure projects, which irritates the others.

On the basis of what is known as comparative advantage, each country would bring something into the common market that the others would presumably make glad use of – on condition that they all accept the Ricardian model of comparative advantage.

That means Kenya has more of the capital, Tanzania has more of land than all the others, while other qualities are divided on a much less specific character as compared to the two other factors, for instance Kenya and Tanzania are more influential in the tourism sector than the others, while Kenya has a more developed hospitality industry, airline connections, etc.

But potentially it is Tanzania that has the sort of mineral wealth, expanse of territory and geographical position that gives it advantage for industrial location, before Uganda inches in with vast discoveries of oil.

The problem is that Tanzania is totally anti-Ricardian in its intellectual orientation, with its old socialist outlook of import substitution the keen preoccupation especially in Parliament, of refinancing to revive old industries liquidated at the time of liberalization in the late 1980s and early 1990s.

The other partner states, more in tune with modernity on industry, realize that industry is a result of enterprise, and that this requires easy acquisition of land on long leasehold basis at least, so that it can be used as collateral. Tanzania just won’t pay attention.

In that case Tanzania has toppled the applecart of East African integration because it has refused to bring its key asset to regional integration, its vast land expanse, to the table as among the principal assets of feasible integration.

Rwanda and Burundi for instance have acute pressures of population as well as Kenya in its central regions in particular. Regional integration and ability to purchase land on a long leasehold basis would see significant bank credit to entrepreneurs from these areas coming over to set up this or that activity, while for a start, it is industrial activity with its more open location possibility that would see heightened interest in land. Agricultural relocation would however start making a difference in pressures in particular countries and foster the population mix needed for subsequent political union.

All this is far away from what Tanzanian intellectual persuasion at the moment requires, as it has an insular mentality on the rest of East Africa the way Zanzibar has an insular mentality in relation to people coming from the Mainland, subjected to passport checks, controls and outright discrimination when doing anything in Zanzibar.

It used to be known in the mid 1990s when young women would go to Zanzibar to purchase quality women fabrics from India and elsewhere which were more highly priced on the Mainland, that they would usually have to adopt a Muslim name and put on the right attire in mixing with people, not go about as Florah and avoiding a hijab.

With the right name and dress a woman would come back with the goods she went to seek, and the right contacts and smiles for her to come back yet again...

What Tanzania doesn’t realize, and it doesn’t appear that JK or any government official, whatever he hears from World Bank or European Union experts and diplomats about the matter, is to venture to tell Tanzanians what they are missing in refusing physical integration with the rest of East Africa, apart from easing the sale of goods.

In part there is also government interest in the current state of affairs, which is evidenced in pivotal interest in investors on the land who want to set up vast agribusiness ventures, often associated with biofuels as in the case of Brazil, but also tied to dwindling arable land in various countries, or trying to avoid costly irrigation as in the case of Saudi Arabia.

Land seekers of this type don’t raise overall prices of land as they don’t purchase individually, precisely what the bureaucrats wish to keep.

The usual dream of a bureaucrat in Dar es Salaam is to seek significant tracts of land at the time of retirement, in which case the lower the price of land at that time the better, which means that the land should remain public or state owned, and investors should just be ‘allocated’ land by investment agencies and local authorities.

If bureaucrats accept the East African common market on the basis of free movement of goods, people and capital, land will start being traded at individual level, most likely the law on land and village land being abrogated so that villages are desisted from the land; each individual is parceled out his (father of a family) portion of clan land, and some arrangements being made for it to be freed, by paying a specific sum of money to local authorities. Then village land could be traded, too.

What Tanzania doesn’t realize that it is missing, and JK hasn’t as yet realized as well, is that as he starts his seventh year since he took office, his model of ‘empowerment’ has all but collapsed, leaving the population rudderless and left wondering what to do next – torn between prayers of religious revivalism stretching all over the country, and primitive rituals making Tanzania the Mecca of skinning and use of body parts.

The most substantive answer to Tanzania’s problems at the moment are twin-pronged policies of returning to the privatization effort of the second phase government which Tanzania’s intellectuals buoyed by Mwalimu Nyerere though a bit discreetly condemned in an unreserved manner, the moment it started touching the coveted ‘commanding heights of the economy.’ That would beef up the Budget, first.

The second dimension is to make land personally owned, such that even at the local level land should be more easily accepted as collateral for starting this or that investment, assuming a bank can seize land without fuss or boycott in case it tries to sell a village plot or farm, as it would have no takers with hostile clansmen sharpening machetes on any eventual buyer.

Second, substantial amounts of capital would stream from outside, starting with EAC neighbours and further afield, to kick-start a vast infusion of capital and credit, as peasants sell land and start projects and employ people, and those who purchase land start projects and employ people.

It is a virtuous cycle that cannot be comprehended by Tanzanian intellectuals because of 50 years of training in Mwalimu’s thinking, principally the line that ‘ubepari ni unyama.

SOURCE: GUARDIAN ON SUNDAY
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