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Strategy for more self-dependent development
2006-09-02 09:32:24
By Dr. Sadikiel N. Kimaro
Socio-economic developments under the first nine months of the Fourth-Phase Government reveal two broad patterns of dependence.
The first pattern entailing substantial self-dependence and resourceful reliance on internally available resources has delivered stunning successes.
Specifically, the Government has achieved commendable containment of armed robberies and indiscipline in the police force.
This has been achieved through innovative use of law enforcement capability within our country and through unprecedented determination.
The Government was able to stave off famine because of its conscientiousness and iron resolve to mobilize all concerned local officials to identify vulnerable persons and deliver needed relief food on time.
Of course, donations of assistance from local and external sources also played a role.
The Government is starting to post impressive results in the renegotiation of mining contracts. Despite warnings that tempering with the contracts could paralyze investment inflows, we are in fact witnessing increased investments into existing and new mines.
The second pattern of dependence is implicit in the Government’s plans to modernize agriculture and the city of Dar Es Salaam, stem power outages, improve the transport system, extend education, health and telecommunication services, promote rural electrification, cleanup our urban areas, contain corruption, foster accountability within the civil service, roll out special economic zones, create jobs, and deliver on the 2005 CCM election manifesto and other electoral promises.
The realization of these plans will require that Tanzanians use part of the accumulated government deposits and foreign exchange reserves.
They should continue to pay their taxes dutifully and support the budget.
The Government is also hoping that Tanzania will remain on the good side of donors, multilateral institutions and philanthropists, thanks to the ”space” that was opened up through arduous economic reform under the Third-Phase Government.
Most of the financial support will hopefully be in the form of grants and soft loans, and will be utilized prudently to expand and match the debt servicing capacity of our economy.
Until now this hope seems well founded. Our key donors have announced multi-year plans to support MKUKUTA.
Following the additional debt relief that our country obtained from the multilateral institutions earlier this year, Tanzania’s debt servicing capacity looks reasonable.
Other things being equal, we can now absorb a large amount of soft loans without falling into debt servicing problems.
Private lenders are eyeing the possibility of resuming lending to our Government to finance the three official planes or, perhaps, ships, radars and insolvent gold mining ventures. For them, the good times are apparently back.
Private investors might also start to put pressure on our Government to provide direct or indirect guarantees for their loans and risky equity investments.
For IPTL and SONGAS the guarantees were if fact the agreed capacity charges, and the attendant subsidies, which the Government has been plowing into TANESCO, to keep it afloat.
Recently the Government provided a US$14 million guarantee to the private firm that is developing the Mnazi Bay gas-to-power project.
Future private investments in thermal turbines, coal-to-power ventures and other pressing areas will probably follow suit.
In short, we may be sliding into a situation in which the door to external dependence is opening wide and the seeds for external debt problems are starting to germinate.
We seem to be saying that we will buy tractors and government planes, build good cross-country roads, mechanize agriculture, get rid of slums and modernize our cities, construct many special economic zones, and implement election promises everywhere, provided we get grants, soft loans, and, if necessary, hard loans.
We seem to believe that foreign private investment and philanthropic support are crucial for our success.
A more restrained situation would obviously be required if our development partners were to decide, for whatever reason, to reduce substantially their support to Tanzania.
In such a situation, a national strategy of enhanced self-reliance—not unlike the national survival strategy of Mwalimu in the early 1980s—would be needed.
Such a strategy would call for enhanced self-reliance through efforts to (a) increase savings in the public and private sectors; (b) promote the consumption of locally produced (rather than imported) goods and services; (c) raise the share of industrial, commercial and other income accruing to the nation; and (d) support local investment and entrepreneurship.
We would also need to review, in line with this strategy, our objectives under MKUKUTA, together with the supporting actions.
We could, for example, decide not to relax our struggle against income poverty by continuing to support income generating activities and employment in the pro-poor sectors.
Because of their importance, we might also decide to maintain the momentum in expanding education and ICT opportunities.
Even so, our pursuit of these objectives as well as that of the other plans of the Government would need to be re-oriented or trimmed back in keeping with the reduced amount of resources from our development partners.
In order to avoid a serious setback to our country’s development, our motto would be to do more with the same or reduced amount of money.
Thus, in regard to the objective of expanding pro-poor incomes and employment, we could focus on getting our people to work ”smarter” and for longer hours on their farms and businesses.
Using the same ”pangas”, ”jembes”, and technology, thousands, or perhaps millions, of Tanzanians could increase their production and incomes simply by working longer.
With a little ”harambee” we could enable many of our poor citizens to acquire simple but much-need working tools.
We could, with little effort, enable our farmers to improve yields by using sorted traditional seeds and by timing more carefully the periods for planting, weeding and harvesting.
With a little effort we could enable many people to move to areas with better arable land.
Working smarter and longer is one way of creating, inexpensively, productive employment among the poor.
Another way is to protect and strengthen existing sources of employment.
The policy of ”bomoa-bomoa”, to make way for good highways and roads through settled areas in the countryside and urban areas is self-defeating.
The recently announced aspiration to tear down urban slums in order to make way for planned settlements could be just as troublesome.
Does it make sense for us to insist on building a road through heavily settled places simply because some time back, when the places were presumably empty, somebody decided that roads could pass there? ”Bomoa-bomoa”—sometimes because of imagined roads—is a result of inadequate appreciation of the accumulated savings and capital of our own citizens.
Excessive external dependence and ineptitude in developing up-to-date laws and regulations suitable for our country also contribute to this insensitivity.
”Bomoa-bomoa” undermines the relative position of Tanzanians in their own country and sets back the clock of empowerment.
There is a danger that clearance of the overly crowded slums in Dar Es Salaam will spawn new slums in outlying areas.
In the event, we could be involved in a spiral of slum clearance and continued destruction of capital accumulated by poor Tanzanians.
Perhaps a more promising approach to our slums would be to embark on proper survey and development of planned settlements in the outlying areas.
This, coupled with methodical provision of social and economic infrastructure in the heavily settled areas, would create space for the so-called slums to be transformed into pleasant historic cores of our city, such as those in Casablanca or Marrakech.
Bomoa-Bomoa and slum clearance tend to minimize benefits from MKURABITA, a project that is primarily aimed at helping millions of informal sector businesses in the slum areas and small towns such as those bordering our highways.
Why should we bother to register legally informal sector businesses located mostly in slums that are going to be razed down?
What bank is going to lend to a temporarily registered enterprise?
Even with substantially reduced levels of development assistance we could still make progress on the other plans of the Fourth-Phase Government.
We could, for example, make substantial headway, with minimal resources, in disease prevention by unclogging the drainage systems in urban areas, by attending to the problem of garbage disposal, and (through simple harambees ) by providing mosquito nets to everyone.
In other areas, we could try to reorient rural electrification even more toward established group settlements and newly developed ones in areas with good arable land.
We could use our special economic zones more creatively to support businesses that empower Tanzanians by providing substantial wage and non-wage incomes.
We could re-orient our efforts in the transport sector toward construction of improved pathways for rickshaws, cyclists, animal-drawn carts, and home-to-farm roads.
This would lend momentum to the anti-poverty struggles of millions of Tanzanians.
We could emulate the resolve of the Fourth-Phase Government in dealing with armed crimes and lawlessness in the police and get rid of rid of corruption, laziness, arrogance, and the lack of sense of duty among the civil servants.
The picture outlined above—of national response to potential drastic reduction in foreign assistance—is rather extreme.
It contrasts somewhat with the Government’s ambitious plans and aspirations, which are premised on the assumption that Tanzania will remain a darling of development partners, philanthropists and foreign private investors.
A more realistic and cautious path should perhaps lie somewhere in-between.
Such a path should be backed by clearly formulated economic and financial plans that indicate where we are and where we are going.
The plans should help us to avoid excessive external dependence, which could compromise our national sovereignty and, indeed, the prospects of our country’s long-term development.
(snkimaro@yahoo.com)
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