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Crusade for economic nationalism
2006-04-05 08:39:15
By Editor
The two decade long Tanzania’s experimentation with economic liberalism has inherently wrought its own ups and downs.
The new style of managing the commanding heights of the economy, away from state-control, has been further complicated by the unstoppable forces behind the globalization process.
It seems, however, that, in terms of national economic interests, we are even more vulnerable to the vultures of international capital because of our weak domestic institutional set-up, non-adherence to the rule of law and most probably the official tradition of elevating private interests at the expense of national gains.
The consistent violation of the Shipping Agency Act (2002) is the tip of the iceberg. This law was enacted just after the collapse of the National Shipping Agency Corporation (NASACO).
It clearly provides that shipping, clearing and forwarding operations should be undertaken by different companies as a way of ensuring safety and fair play in this lucrative business.
Over the last four years, the Tanzania Freight Forwarders Association (TAFFA) has been up in arms over the blatant laxity of the implementing state agencies in enforcing the law.
To-date, TAFFA claims that 80 percent of international shipping lines have been operating clearing and forwarding companies alongside their shipping business contrary to the said law.
Although different responsible authorities, including the Tanzania Revenue Authority (TRA) which issues clearing and forwarding licences, have routinely denied such illegal operations, public attention was drawn last week by the Surface and Marine Transport Regulatory Authority’s (SUMATRA) decision to suspend Maersk Tanzania Ltd. for having flouted shipping business regulations.
And, by extension, TRA has equally suspended Quick Serve Clearing and Forwarding Company for allegedly collaborating with Maersk Tanzania Ltd to contravene the country’s shipping laws.
SUMATRA claims that its investigations have established that the said company has been combining clearing and forwarding business as well as that of a shipping agency contrary to the laws of the land.
TAFFA alleges that there are other foreign shipping agencies operating illegally, and at times by co-opting puppets in their firms’ directorates as a cover-up to their underground business operations.
The question of sloppiness in enforcing the law is now exceptionally vivid and further denial attempts are out of place.
Tanzania is a net importing economy, and so about half of government revenue comes from imported merchandise.
When even clearing and forwarding business is handled by foreign shippers, proceeds are repatriated to the countries of origin, hence denying home companies business, as well as additional revenue to state coffers.
At a much more sensitive level, there are signs that economic patriotism is waning fast, at the expense of home-grown jobs, skills and the enhancement of public revenue sources.
The ’first my-nation approach’ is a worldwide practice. Last week, for instance, the French government intervened against what it seemed as a hostile takeover bid, when French waste and water company, Veolia Environment SA, invited Italian Enel SpA to jointly take over the energy company Suez.
Instead, the government forced Suez to merge with state-owned Gas de France to create an all-French global energy giant.
This approach will, in the long run, help to confine the benefits of economic growth at home, and make everyone, at different levels enjoy the benefits. We stand to gain more from this approach.
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