TZ looks for achieving sustainable industrial development in a balance

09Jul 2018
Muharram Macatta
The Guardian
TZ looks for achieving sustainable industrial development in a balance

TRADE fairs are supposed to promote trade and investment nationally and internationally; and show off innovative products at all levels of entrepreneurship. International trade fairs are replete with intercontinental, reputable, large, medium and small-scale businesses, wishing to expand their -

prospects and get into larger markets to distribute their products and services.

Tanzania’s “international” trade fairs are usually filled with the same companies in town; stands inundated with imported consumer products available in the shopping malls. Few institutions show research and development products; and even fewer show interest and the potential to internationalize.

Tanzania has increasingly become, and projects itself as a business hub in East Africa as a result of its functioning democratic system and positive economic development in recent years.

Consequently, Tanzania has been expanding and modernizing air,rail, energy, roads transportation, airports and harbours to meet international standards. Many companies have been showing interest in the Tanzanian and East African market both for export and import.
The rapid industrialization and modernization currently sweeping through many African countries has resulted in an increased demand for capital goods such as machinery, lubricants, spare parts, ball bearings and other automotive mechanical goods and accessories.

The market for automobile spare parts, in particular, has been an attractive sector for global exporters, as Africa has witnessed a remarkable increase in imports by 30% or beyond.

Learning-by-doing may be more rapid in export industry thanks to the knowledge and technology spillover effects. In addition, the benefits of international trade are mainly generated from the external environment, appropriate trade strategy and structure of trade patterns.

There are comprehensive empirical studies on the impact of trade on economic growth. Before the 1960s, research on trade effects was limited to a few specific countries.

With the development of econometrics, however, many complicated methods based on a mathematical model were introduced to analyze the interactive impact between trade and economic growth.

So far, the discussions in this area have been generally divided into two categories.One focuses on the causality relationship between international trade and economic growth to examine whether economic growth is propelled by international trade or vice versa. The other mainly discusses the contribution of foreign trade to economic growth.

The few companies that are “international” are usually small ones from neighbouring African countries, and without the strong financial backing to make the necessary impact, as far as major trade deals are concerned.

Over the years, many of them have stopped participating in the SABASABA INTERNATIONAL TRADE FAIR as far as some of us still recollect.
Perhaps it is time to take a good look at the adage ‘international’, vis-à-vis the content of the fair and diversity of participants, etc. Such scrutiny should settle on what makes the fair international, the minimum standards set to meet the international name calling, etc.

The numbers are enough to hold one or two large international trade fairs for between two weeks and a month. These can attract wider patronage, and large numbers of visitors, throughout the period of exhibitions.

The Food and Hospitality Fair; the Critical Infrastructure Protection in Oil and Gas (LNG) Fair; Clean Energy and Environmental Exhibition and Conference; Food and Beverage Tec Fair, Tourism and others, are scheduled separately alone, at AICC in Arusha or Dar es Salaam and recently in Dodoma or Zanzibar.

Business specific Trade Fairs are welcome; however, combined larger fairs are prone to drawing bigger audience, and offer the chance for the business community (and government) to explore other areas they would otherwise not have been the abreast of.

The United Republic of Tanzania is looking for sustainable industrial development in a balanced way. This is evident given the path the Ministry of Trade and Industry has taken in policy formulation and implementation; plus the role the Minister has played over the years in complementing the efforts of local businesses to grow.

The 5th phase government has become an important voice of private sector businesses, vis-a-vis advocating for the most appropriate policy framework and to build the capacities of local businesses, inter alia...

The public sector in liaison with the Ministry of Trade and Industry, the CTI, and other stakeholders, should collaborate closely in the planning of trade fairs. This cooperation should include widening the scope of participants in Tanzania’s “international” trade fairs.
They should focus on strengthening existing partnerships and forging new ones and networks at global, regional and sub-regional levels, towards achieving sustainable industrial development.

To harmonize these efforts, they should integrate all three dimensions of sustainable development – economic, social and environmental –
That enhance productive capacities in a way that supports and transforms the economy, encourages economic growth and creation of decent jobs; enhances productivity and development, particularly the small and medium enterprise sector, micro-industries and new forms of community-based entities.

Invariably, planning partners should aim at building bridges among business communities, and enable business people to join their strengths, and build mutual trust.

Since most developing countries experience difficulties in attracting investment and in assessing the relevant knowledge and solutions to persistent challenges, it is essential to reinforce international cooperation. Trade fairs have a significant role to play in advancing such a cause.

Business networking must be emphasized as an indispensible addition to the more traditional forms of international cooperation. Empirical evidence reveals that most increase in per capita income stem from advance in technology.

Therefore, planners of trade Fairs should identify state-of-the-art practices and encourage learning and knowledge-networking strategies, which will build the foundation of any sustainable development, approach.

Consistently, industrial development should be on the national development agenda in order to stimulate growth, increase employment and improve living standards. Hence, planning for trade fairs should prioritize these as ultimate benefits.

The SabaSaba International Trade Fair Center is woefully underutilized. Income to maintain the complex infrastructure cannot be anything but small, leading to some infrastructural deterioration, and haphazard maintenance schedules.

After this SabaSaba international trade fair in July. 2018, there will be a year available to plan the next one. Stakeholders should collaborate with other international fair organizers to make the SabaSaba International Trade Fair an annual or biennial event that international companies will look forward to.

For example, the CTI, Ministry of Trade, and the private sector could liaise with the German Trade Mission, to organize a fair involving about one hundred companies from all over Europe.

Dubbed Africa-Europe Fair; it could have all African countries participate with the focus being promoting intra-African trade, and between African and European companies leading to the industrialization of the African continent.

The alternating year will witness the Africa-Organizationof American States Fair. This will involve companies from Canada, the United States of America (USA), and other countries; that is, all South American/Latin American countries which are members of the Latin American economic bloc.

The next would be the Africa-Asia Trade Fair, emphasizing the products and services available from China, Korea, Japan and other “Asian Tigers”.

Planners of trade fairs in the United Republic of Tanzania should base their activities on productive competence and global trade capacity building, sustainable production in addition to industrial resource efficiency.

In sum, most empirical studies support the positive effects of openness on economic growth. From the comprehensive literature, both static and dynamic gains from trade could be found.

The static gains from international trade refer to the improvement in output or social welfare with fixed amount ofinput or resource supply. They are mainly the results from the increase in foreign reserves and national welfare.

Firstly, opening up to the global market offers an opportunity to trade at international prices rather than domestic prices. This opportunity provides a gain from exchange, as domestic consumers can buy cheaper imported goods and producers can export goods at higher foreign prices.

Furthermore, there is a gain from specialization. The new prices established in free trade encourage industries to reallocate production from goods that the closed economy was producing at a relatively high cost (comparative disadvantage) to goods that it was producing at a relatively low cost (comparative advantage). By utilizing its comparative advantage in international trade, a country could increase the total output and social welfare.

Firstly, international trade sectors based on comparative advantage always enjoy the economies of scale through the expansion inproduction stimulated by the massive demand from the global market. This results in the decrease of production costs, a large amount of accumulation of capital and increase in employment.

Secondly, international trade is one of the channels supporting technological spillovers among countries which results in a favorable impact on the productivity level.

Endogenous growth of an open economy is achieved through “learning by doing” which exhibits diffusion of technology across goods and countries. International trade, which transmits knowledge internationally, could increase the absorptive capacity of trading countries by promoting technological advancement.

Increased productivity is also achieved through practice and innovation. Finally, international trade leads to robust institutional changes. International trade not only facilitates trading of goods and services, but also ideas on market mechanisms.

Developing countries are learning to apply market power more efficiently with less intervention from government to increase openness. Especially in bilateral and multilateral trade, participants should fulfill their commitments to international rules and regulations to bridge the gap between developed countries as it provide domestic industries with increasing access to foreign equipment’s and leading technology.

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