Question

Examine how the different phases of economic performance in Tanzania have influenced employment conditions in Tanzania.

Answer 1

Sol:

Economic development and change in any society and at all times has been a function of many, complex and interrelated factors. These factors include social, technological, climatic, financial, natural and political factors. In some cases, one and the same factor may have been responsible for both positive and economic development and change. In some cases however, some factors may be responsible for either positive or negative development and change but not for both. This work focuses on the political factor as an explanatory variable for the economic development and change in Tanzania since independence

It is to be understood that Tanzania is a republic with an executive president. It has been a single party state with free elections from independence to 1995. Political pluralism was introduced in the country in 1995 following a referendum. Since then there have been multiparty major elections after every five years in which Chama Cha Mapinduzi – CCM – literally translated to mean Revolutionary Party - has been winning the presidency and majority seats in the parliament. Other major political parties (opposition) include Chama Cha Demokrasia na Maendeleo – CHADEMA – literally translated to mean Party of Democracy and Development; Civic United Front (CUF); Democratic Party (DP); Tanzania Labor Party (TLP) and United Democratic Party (UDP).

After her political independence in 1961, Tanzania has experienced three major epochs of economic development and changes. The author argues that the changes were mainly due to political factors mainly within Tanzania. The three different epochs are outlined in this work and a discussion on the political factor behind the observed economic development and change is done.

ORGANISATION OF THE REST OF THE PAPER

After the introduction, follows the following main sections: methodology; conceptual and theoretical issues; three main epochs in the economic development and change in Tanzania and the influence of the political factor; conclusions and implications; and recommendations for future studies.

METHODOLOGY AND APPROACH

This work is based on the review and analysis of seconddary data sources. It takes a historical perspective of the economic development and change in Tanzania from 1961 to 2007. The observed economic development and change are then attributed to the political factor mainly within the country.

CONCEPTUAL AND THEORETICAL ISSUES

The key conceptual and theoretical issues in this paper are briefly described in this section. The aim is to contextualize and locate the work within specific conceptual and theoretical frameworks. The main conceptual and theoretical issues in this work are development and political leadership. These are briefly described in what follows.

DEVELOPMENT

The academic literature on development in general and economic development in particular is rich of discourse. The concept of development emanates from the concepttualization of different schools of thoughts. It is a contested, multidimensional and multifaceted concept and thus is looked at from many perspectives. Chambers (2004) argues that development has been taken to mean different things at different times, in different places, and by different people in different professsions and organizations. The dominant meanings have been those attributed by economists and used in economics. In all cases has been normative and it has involved change. Development is equated with economic development, and economic development in turn with economic growth. The underlying meaning of development has been good change in the realm of ecology, economics, society, politics and indeed in all spheres of life. For Seers (1972), development is creating conditions for the realization of human personality, reduction of poverty, social inequalities and improvement in creating employment opportunities. Todaro (1985) views development as a multidimensional process involving major changes in social structures, popular attitude, national institutions, acceleration of growth, and reduction of inequality and eradication of absolute poverty.

Development indicators

Development indicators are parameters (measures) that can be used to assess whether there is development in a given area at a particular time and whether this development is increasing, stagnant or decreasing over time. Such indicators include macro-economic variables like Gross Domestic Product (GDP); Gross National Product (GNP); inflation rate; levels of investment and national debt. They also include birth and death rates (measured by infant and maternal mortality rates); morbidity (measured by specific causes of deaths); education levels attained (measured by literacy and numeracy rates and life skills in a population); housing (measured by the material used for roofing); availability of and accessibility to social services and amenities like hospitals, health facilities, safe and clean drinking water, school etc (measured by the distance from human settlements to the place where these are found); availability of and accessibility to infrastructure – both hard (traditional) like roads, railways, ports, airports, harbours and telecommunication and soft (modern) like Internet; and life expectance (measured by number of years that one expects to live from time of birth). Applicability and interpretation of the indicators will differ from place to place and time to time.

Political leadership

According to Soanes and Stevenson (2003), politics relates to ideas and strategies of government or public affairs of a country. In this paper, political leadership is taken to mean the role of politicians in giving vision and strategies and creating conducive environment for implementation of formulated policies. These policies aim at, among other things, bringing about economic development and change. The literature on political leadership, as is for the concept of development, is widespread. A search for “Political Leadership” in Google Scholar search engine on 7 th June 2007, gave a total of 690,000 hits. Among the authors that have dwelt on the political leadership question in the literature include Hyden (1999) who worked on top-down democratization in Tanzania and Miguel (2004) who worked on national building and public goods in Kenya versus Tanzania. Lupogo (2001) addressed the question of civil-military relations and political stability in Tanzania while Samoff and Graham (1975) worked on local politics and the structure of power in Tanzania. Among the few available academic works that somehow attempted to relate political leadership to economic development and change in Tanzania are those by Carney (1977) who worked on Nyerere and the emergence of a socialist strategy; an untitled work with no author’s name, which is on the agriculture sector during and after Nyerere’s Tanzania and Bienen and Herbst (1996) whose work focused on the relationship between political and economic reform in Africa. Bienen and Herbst (1996) correctly argue that analyses of the relationship between regime type and economic management have not been very illuminating. They acknowledge that there have a number of works that have attempted to understand the relationship between democracy and economic growth. According to the authors, the works have been conducted across a very broad range of countries instead of focusing on specific problems faced by African countries that are trying to democratize.

Now that no known work has been done to systematically attempt to attribute economic development and change in Tanzania to the political leadership factor, this work attempts to fill this serious gap in knowledge. The conceptual framework that guides this work is presented in the section that follows.

THE ROLE OF POLITICAL LEADERSHIP IN TANZANIA’S ECONOMIC DEVELOPMENT AND CHANGE

Tanzania has experienced three main epochs of economic development and change since her indepen-dence in 1961. The epochs are presented here, along with discussion of the role of the political leadership factor in defining and shaping these major developments and changes.

The 1961 – 1967 epoch

Some background information to introduce this epoch is necessary. Before the political independence in 1961, Tanganyika’s (Tanzania’s name before its union with Zanzibar in 1964) economy was under its colonial masters. It was first under the Germany colonialists (1885 – 1918) before being under the British colonialists up to the independence. Colonization of Tanganyika, as it was for other countries, was mainly a result of political decisions in the colonial countries. It was a result of, among other things, the political leadership factor in those countries that aimed to expand their empires. This can be evidenced by, inter-alia, the Berlin conference on dividing Africa between European political powers. Colonialism made a profound impact on the economic development and change in the colonized countries. The general economic motives of colonization were acquisition of raw materials for economic development in the colonial countries. Colonialism brought cash economy with it. Colonies, including Tanganyika, became suppliers of raw materials like minerals and agricultural commodities and buyers of processed manufactured goods. The economic structure that was established by the colonial powers has had many and far-reaching implications almost fifty years after the independence of many African countries. For an account of some of these effects, see Rodney (1972) on how Europe underdeveloped Africa. For German colonial policies and their influence on development and exploitation in mainland Tanzania for the period 1884 – 1914, see Sunseri (1997). The political decisions to acquire colonies therefore, have been the base for many economic developments and change for many countries. It has been a source of the past and current economic structures; determinant of trade partners and even investments inflows. The political leadership that resulted into colonialism has also been among the sources of conflicts and wars in Africa. This has been responsible for negative economic development and change in some conflict-ridden countries. After independence, Tanzania concentrated on building an independent nation. The economy continued to be mainly within the hands of the British colonial masters and Asian businessmen, mainly Arabs and Indians. Industries, plantations, banks, mines and relatively large commercial activities continued to be under the British and Asians. The economy continued to be basically a market-oriented one with private sector capitalism dominating. The political structure was characterized by a single party of Tanganyika African National Union (TANU) up to 1964 when Tanganyika and Zanzibar united. The political party in Zanzibar, Afro Shirazi Party continued to exist along with TANU up to the 5 th February 1977 when the two parties united to form the current ruling party of Chama Cha Mapinduzi (CCM). According to Kaiser (1996), after Tanganyika’s independence, “…efforts were made to implement a programme which depended on foreign investment to support massive, capital-intensive industrialization and agricultural development projects.” This was the country’s first five-year plan. The political decision just after independence therefore was to continue with the capitalist mode of production inherited from colonial masters. It can be argued therefore that the relationship between political actors (TANU leadership) and economic policy was one in which the leaders followed more or less the policies inherited from colonial masters. The interests of coloialists were continued in this epoch. As expected from the key tenets of capitalism that include private ownership of major means of production and market oriented economic practices, a number of imbalances were observed by the mid 1960s. The political decision to embrace capitalism after independence led to a number of market failures as the state did not intervene in the economy. The expected “fruits” of independence were not realized by the majority of people. Poverty continued to dominate and the common man and woman did not see the benefits of independence from economic point of view. They continued to toil for the same colonial masters they had toiled for before independence. This unfortunate situation was observed by the political leaders of the day. A new political decision to address the imbalances brought by capitalism was made. The decision has had many and far-reaching impacts in the economic development and change in the country’s economic development and change process. This is discussed in the section on the second epoch of the country’s development and change process.

The 1967 – mid 1980s epoch

The political and economic landscape of Tanzania changed dramatically in 1967. This was a result of a political decision that gave birth to Arusha Declaration that was proclaimed in this year. This was a blue print that declared that Tanzania would be following Ujamaa (This is a kind of African socialism) policy. The policy implied that the country would be following socialist oriented economic and political policies. The capitalist, private sector market-led economy that was inherited from the colonial power at independence was replaced by state owned, centrally planned and controlled economy. All the major means of production in the country (industries, plantaions, commerce, mines etc) were nationalized and put into government hands. The state became the major owner, controller and manager of the state owned enterprises (SOEs). These are parastatals that were formed following nationalization of private property. The political decision that gave birth to the Arusha Declaration made the end of capitalist mode of production in Tanzania. This was a major and dramatic change in Tanzania’s economic development that the country has to live with for many years after 1967.

The Arusha Declaration has received substantial citation in the academic literature. Author’s search for “Arusha Declaration” in Google Scholar search engine on 9 th June 2007 gave a total of 2,930 hits. Among these include Nyerere (1967) in which the declaration in general and Ujamaa doctrine in particular is described as Tanzania’s outline of its policy on socialism and selfreliance. Kaiser (1996) correctly attributes the emergence of the Arusha declaration to the failures of the first five year plan that was adopted by Tanzania just after independence. The plan was not yielding the anticipated results. Ruralurban development differentials increased, local expertise remained inadequate and land and labour resources were underutilized. According to Kaiser (1996), “Given these imbalances, President Julius Nyerere presented an alternative vision in 1967 as outlined in the Arusha Declaration”. Kaiser (1996) argues that the then ruling political party of Tanganyika African National Union (T.A.N.U) called into question the benefits of modernization policies by challenging the basic tenets of capitalism. In Stein (1985), it is pointed out that the political party of T.A.N.U “…called the Government to exercise control over means of production and move away from overreliance on foreign assistance in development…Finally, T.A.N.U called for changes in the party to ensure that it contained only committed socialists”. Stein (1985), correctly points out that “In the wake of this announcement, the Government nationalized private banks, took over major ownership of the seven largest firms, and acquired complete control of the National Insurance Corporation”. Levin (2001), correctly points out that Arusha Declaration “…came to change Tanzania’s policy environment dramatically. The Declaration ushered in a new policy direction for the country, a break from the fairly orthodox economic policies followed during the first years after independence”. Emphasis was on public ownership and individual initiatives and the role of the private sector were sidelined. The objective was to build a socialist egalitarian society with public ownership of the economy. The Arusha Declaration is described by Lonsdale (1968) as a socialist experiment on “…Socialism and Self-Reliance and the nationalizations of the banks, the export-import houses and some of the major manufacturing enterprises”. Good-intentioned as it might have been, the political decision to practice centrally planned economy with public ownership and government intervention did not work well. The nationalization of the productive sectors of the economy has been among the major reasons for poor economic development in Tanzania. The hither-to private Ngowi 263 sector owned and managed enterprises became public enterprises. They were typically characterized by inadequate managerial and technical skills; embezzlement; capacity under-utilization; reliance on government subsidies; non-payment of taxes; over-employing; protected from imports; and monopolistic in nature. As a result they became loss-making entities that depended on government subsidies for their survival. As public enterprises, they did not pay tax to their owner either. It is not surprising therefore that most of these SOEs came to a virtual verge of collapse. They became heavily indebted and employees were now and then sent into long unpaid leaves. The Ujamaa policy did not give any incentive to the private sector enterprises. Private sector entrepreneurs were looked upon as exploiters and “enemies of the state”. Given the acknowledged roles of the private as opposed to public sector in economic development process, this epoch can be said to have been a lost period in Tanzania’s economic development process. The superiority of the private sector over the public sector in the economic development process lies mainly on the former’s greater efficiency, effectiveness, vibrancy, dynamism, innovativeness, flexibility and profit orientation. See details in, among others, Ngowi (2006). It is not the purpose of this work to evaluate Tanzania’s economic performance under the Arusha Declaration. It is worth mention however that, according to Levin (2001), during the period of Arusha Declaration per capita incomes grew by 0.7% per year. This was led by the public administration sector with a sizeable contribution from agriculture and manufacturing. Exports stagnated due to the policy environment that was hostile for exports. Government had monopoly on marketing of goods and services. Inefficiencies drove down producer prices and there was high effective protection of the import-substituting industrial sector. Trade controls, instead of exchange rate adjustment, were used as a means of adjusting to external shocks. Suppression of private business limited opportunities for entrepreneurship. Control of prices, exchange rate, interest rate, imports and exports added to the already hostile business and investment climate. On the social services front however, it should be acknowledged that it is in this epoch that the state struggled to provide highly subsidized (up to 100% subsidy for some services) social services. Education (from primary to tertiary level), health and water were among such services. Looking at the role of these services for economic development, especially education, the epoch should be seen as an era for investment in human capital. The investments in social services that took place at this epoch are among the current and future driving forces of economic development and change in Tanzania. These include all levels of education and health facilities. The political decision that led to nationalization and practice of a state planned and controlled economy therefore, has had profound impacts in the economic deve-lopment and change in Tanzania. The impacts stretch far beyond the epoch itself. Most of the senior and middle-level public and private sector officials contributing to Tanzania’s economic development today, for example, are products of the 1967 political decision to provide highly subsidized education and health services. The relatively infant, small and weak private sector in Tan-zania today however, is a mirror image of the socialist past of the country.