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46 years down the line: Jk has a lot of issues to address
2007-12-10 08:50:39
By Ani Jozen
For a few months in the second part of the year, as the parliamentary session on the annual Budget was drawing to a close, it seemed that Tanzania was never going to be the same again.
Much of that pressure has now diminished, though it is possible cabinet ministers are taking some precautions as to what meetings they are invited to address, avoiding public rallies where possible.
The reason was that they took the brunt of popular anger on perceived mishandling of mining contracts.
In actual fact it was President Jakaya Kikwete who led the way into facing hostile crowds, by personally visiting the controversial Buzwagi gold mining site, and duly met with placards, etc.
Then the president went on a three week long or slightly longer - business visit outside, including addressing the plenary session of the United Nations General Assembly, and the cabinet opted to tackle the `shaming` campaign on the ground, and dismally failed.
It required the president to come back, and after some growls from the police, and party elections, for calm to return.
While there is a calm situation reigning at the moment, there is little assurance that it will remain in place; the government battles to keep the lid on electricity charges, which has brought the energy parastatal to the brink of crisis.
There is little chance that it could win that battle, as no more donors funding is expected for energy after the 400m dollars from the World Bank and the Millennium Challenge Account, as well as 200bn/- in the Budget for capacity charge of IPTL and the Dowans generation project.
There was also 300bn/- in `commercial bank loans,` an acronym for some hurried Treasury bills; all this is inadequate to quench the cash thirst at Tanesco.
Whether the energy quandary that the president is fast approaching will make it possible for him to remember second phase wisdom about offloading burdens that the government carried in trying to shore up parastatals is one thing.
The guess however is that the public will have to foot the new bills, which have to rise by at least 25 per cent if not higher so that Dr Idris Rashidi doesn`t tender his resignation again, before any such shift can occur.
There is so much detesting of privatization that underlines the legitimacy of the fourth phase regime for Tanesco to quickly go.
There are other policy choices to be made in the mining sector, where it has been pointed out that the committee formed to look into legislation on contracts given to major foreign mining companies.
Yet if this is the fifth committee in a series, since around 2003, there is little that wasn`t discovered by previous committees that will be taken note of by the current committee - save one significant political datum.
There is a change in how people are prepared to listen to the political leadership.
This perhaps marks the change in the 46 years of independence that wasn`t in vogue, noticed in public, even by the time of the polls in 2005, despite currents of criticism.
For the first time since independence the government no longer leads in setting acceptable policies criticized by portions of the public, without ability for a `critical mass` expressing itself on the streets for instance.
That is what has more or less been altered, and that implies that it will be felt at the level of economic policy.
A watershed has also been marked in donor-government relations in the recent past, where for the first time the spirit of cooperation became one of strident voices of criticism.
While it is noticeable that donors are taking `photo opportunities` with President Kikwete, like at a recent tour of Lindi where UK High Commissioner Philip Parham was also present, the basic issues have been laid out.
Aid might be on the rise as well, with the UK and EU moving more or less to doubling aid, but its long term outlook is diminishing, as donors now want emphasis on trade, not aid.
It is uncertain how the public will react if the president finally says in an end of the month address, or goes to Parliament for the purpose, that little can in actual fact be changed in the mining sector taxation structure.
Neither can the government put up a bill for taking shares in the mining firms unless they floated their shares on the DSE for the public to buy, not the government in the first place.
The best that can be done is to stop more giant mining firms invading new minerals-laden areas, so as to absorb the pressure from small miners and enhance rural purchasing power too.
Yet for any such change to take place, it will be vital for IMF and other advisers of the government to make a keen distinction between the government’s income and GDP growth, so as to leave out broad mining areas to local people.
There is a World Bank-fuelled faulty notion that the more large miners are invited, and thus the more taxes paid to the government, the better the scenario for development, which is faulty.
Only money earned by local people expand trade and investment, enhance the price of land, create employment as miners move to trade or farming.
Similar dangers were hovering around the horizon with an intention to return the monopoly of oil imports to TPDC, while the country is just finishing negotiations with Iran, Egypt, Libya and Algeria on oil import bills.
The fact that liberalization enables agents of the producers, with franchise from producing companies and thus given the oil at bottom prices, only adding variable elements like depreciation or lower tax evasion possibility leading to price mark ups, a TPDC monopoly is being mulled.
Were the president to okay that change that has a portion of the bureaucracy watering their mouths, chaos results in who gets petrol from importers and at what price - or buying oil at the spot market by TPDC igniting chaotic pricing.
One implication of this contention is evident, that the legitimacy of reform policies is endangered; big mistakes may come up to placate opinion and then lead to chaotic price rises and large layoffs.
The recent purported reformulation of minimum wage already ignited a few hundred lay offs in cotton firms, but opinion hasn`t learnt that what is needed is a large flow of cheap commodities.
They will wake up to that as EPA with the European Union starts being implemented; it can`t be locally decided.
Left to local opinion the current administration needs ideological support among the more radical wings of the ruling party, by continuing with intervention at various levels. where it would fail anyway.
The public would thunderously applause the return of a TPDC oil import monopoly, and sneer at the president for failing to grab gold mining firms` shares.
When they start paying steep electricity prices, there are dim chances public opinion might start talking about privatization, but still quite dim.
As an economic partnership framework agreement has already been signed with the European Union, and embedded within it is Kenya freeing its economy sooner, and Tanzania being tied up with Kenya in the customs union, this is a key pivot of change.
It perhaps hasn`t come a week earlier, as only by pointing to unbreakable agreements about the free market can the president resist the mounting chorus for a restoration of the Arusha Declaration.
That much was being sought recently in a tract on `the worsening gap between the rich and poor,` bringing together a veteran radical columnist, a former aide to the late Mwalimu Nyerere, and the latter’s son....
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