Saturday, March 7, 2009

Nyerere and IMF: Will Our Leaders Deliver in the Summit?

In March 10th 2009, the International Monetary Fund (IMF) and the Tanzanian government will co – host a high – level summit, “Changes: Successful Partnership for Africa’s Growth Challenges”. The overall objective of this summit is for the IMF to come up with a solution on how to maintain economic stability that Sub Saharan Africa has experienced since the turn of the 21st century (2000). While there is undeniable success story about the stabilization of Tanzania economy from macro perspective (low inflation, fiscal discipline, and lower interest rate), on the micro level the story is quite different. The majority Tanzanians (over 70% of population who still live in rural areas) are still poor as they were in 1985 when IMF came in sabotage the Tanzanian. This is why, throughout his life, Nyerere, fought tirelessly to protect the poor from these big monsters. For instance Nyerere rejected the idea of ‘unfair‘integration of the poor into the global economy; he also rejected IMF’s interventions that were ideological and political biased. For instance just because traditional free market solution includes currency devaluation, reckless privatization of state owned enterprises and trade liberalization, Tanzania had and still has to abide to this conditionality or else be denied access to development finance.

Since 1985, all these IMF/World Bank policies have been implemented and the results have been obvious - lack of access to healthcare for the majority of Tanzanians, an increased informal sector due to high levels of unemployment in the country, inefficient education system, and more poverty among majority of Tanzanians (especially in rural areas).

It is such an honor for Tanzania to host this high - level IMF summit especially given the fact that Nyerere was the first African leader to criticize its foul play in poor countries. We should all concur that the summit will only be meaningful to an average Tanzanian in Kilwa who is still wondering why he can’t sell his cooking oil made out of coconut just because the IMF/ World Bank requires the Tanzanian government to liberalize its economy regardless of the consequences to an average Tanzanian. Therefore it is more than a responsibility for our presenters in this summit (his excellence President Jakaya Kikwete, BoT Chief Ndulu (PhD) and honorable Minister of Finance Mustafa Mkullo), to carry Mwalimu’s views during the summit for two major reasons. One Nyerere’s views represent the concerns of the majority of Tanzanians today. Education (not just increase in enrollment rates as it has been praise by the WorldBank/IMF and Tanzanian government, but more primary school graduates, more opportunities in secondary and high schools, and more access to University education that is relevant to the job market conditions), electricity (only 1% of the rural population have access to electricity, a figure no different from 1985), healthcare ,clean water and employment opportunities (since the privatization of the former state parastatals and massive layoffs in the public sector, the majority of Tanzanians still don’t have access to decent jobs).

And two, the IMF has not really changed since 1985. IMF/WB have attempted to rename the Structural Adjustment Programs (SAPs) to Poverty Reduction Strategy Paper (PRSP),following years of criticism on how the SAPs were just ideological and political tools of the IMF/World Bank to advance the interest of rich countries instead of making SAPs be determined by the real needs of the poor countries. Despite this sugar coating on SAPs, many NGOs and scholars, in both poor and developed countries have argued that this change (from SAP to PRSP) only relieve pain but does not cure the illness i.e. they don’t lead to a sustainable reduction in poverty. The fundamentals of SAPs have largely remained unchanged (e.g. fiscal discipline, trade, and finance liberalization, privatization of state parastatals etc) In the past, it was common practice for IMF to prepared speeches for poor countries’ officials. For instance, there was an incidence in 1980 when Amir Jamal the then Minister for Finance of Tanzania whereby he was given a speech prepared by IMF officials in advance, whom he strongly rejected). Let us hope this won’t be the same for President Jakaya Kikwete, Hon. Ndullu (PhD) and Hon Mkulo. We all wish Nyerere was one of the delegates to the summit because his speech still lives today. Nyerere’s speech would have been the only presentation for us Tanzanians to show the IMF that when we say we need change in the global capitalist system, we really need change.

You’re Excellencies Dominique Kahn, IMF Managing Director and President Jakaya Kikwete, Professors Ndullu and Migiro, Honorable Mkullo and Kofi Annan, and other delegates from Africa and the international community, please deliver us from poverty and also please make Nyerere smile in heaven. In the debate, you can do all the talk as long as your perdiems allow you to do so. But please, at the end of the day, Tanzanians are waiting to hear and read in the next day newspapers your response on two fundamental issues:

  • How can Tanzania best manage her relationship with the IMF, World Bank and the donor community so as to maximize the benefits that can be derived from this relationship while also minimizing the costs inherent in it, including notably the disadvantages that are often a consequence of the power imbalance which is embedded in it, something that Mwalimu Nyerere tirelessly fought against?

  • We are tired of hearing that Tanzania has experienced a sustainable economic growth averaging over 7% since 2000. We want to hear on how we can ensure that this growth is not pursued at the expense of more poverty for the majority of the Tanzanians. It is obvious that this growth only benefit the connected few – Multinationals and a few urban elites. How should we deal with competing objectives of efficiency/economic growth and social justice/poverty reduction?

We will end with an extract from President Nyerere's New Year Message 1980 to the Diplomats accredited to Tanzania. It is time for us to contemplate.

Beginning of Nyerere’s speech:

“Your excellencies: Tanzania needs peace-in Africa and elsewhere. But the major economic problems which have preoccupied us in recent months, and which darken the coming year, were not caused by the war against Amin's Uganda, nor the African struggle for freedom. These make things worse; they added to the strain on our resources and deflected our attention at an important time. But we were experiencing inflation before October 1978; our balance of payments was in serious deficit before that war; oil price increases have nothing to do with events in East or southern Africa.These externally caused problems are obvious, and so is our need for an injection of balance of payments support.


What recently became equally obvious to me but nevertheless strange and repugnant was the attempt by the International Monetary Fund to exploit those difficulties in order to interfere with the management of our economy.


The IMF always lays down conditions for using any of its facilities. We therefore expected that there would be certain conditions imposed should we desire to use the IMF Extended Fund Facility. But we expected these conditions to be non-ideological, and related to ensuring that money lent to us is not wasted, pocketed by political leaders or bureaucrats used to build private villas at home or abroad, or deposited in private Swiss Bank accounts.

We also accepted that we could justly be asked how we were planning to deal with the problem in the medium or longer term. We could then have accepted or rejected such conditions, but we would not have felt it necessary to make a strong and public protest.


Tanzania is not prepared to devalue its currency just because this is a traditional free market solution to everything and regardless of the merits of our position. It is not prepared to surrender its right to restrict imports by measures designed to ensure that we import quinine rather than cosmetics, or buses rather than cars for the elite.


My Government is not prepared to give up our national endeavour to provide primary education for every child, basic medicines and some clean water for all our people. Cuts may have to be made in our national expenditure, but we will decide whether they fall on public services or private expenditure. Nor are we prepared to deal with inflation and shortages by relying only on monetary policy regardless of its relative effect on the poorest and less poor.


Our price control machinery may not be the most effective in the world, but we will not abandon price control; we will only strive to make it more efficient. And above all, we shall continue with our endeavours to build a socialist society.


When an international institution refuses us access to the international credit at its disposal except on condition that we surrender to it our policy determination, then we make no application for that credit. The choice is theirs-and ours. But such conditions do reinforce our conviction about the importance of the Third World demand for changes in the management structure of the IMF. It needs to be made really international, and really an instrument of all its members, rather than a device by which powerful economic forces in some rich countries increase their power over the poor nations of the world.


There was a time when a number of people were urging that all aid to the Third World countries should be channeled through nternational institutions. They honestly believed that such institutions would be politically and ideologically neutral. I do not know whether there are now people who honestly believe that the IMF is politically or ideologically neutral. It has an ideology of economic and social development which it is trying to impose on poor countries irrespective of their own clearly stated policies. And when we reject IMF conditions we hear the threatening whisper.

'Without accepting our conditions you will not get our money, and you will get no other money'. Indeed we have already heard hints from some quarters that money or credit will not be made available to us until we have reached an understanding with the IMF.

When did the IMF become an International Ministry of Finance? When did nations agree to surrender to it their power of decision making?


Your Excellencies: It is this growing power of the IMF and the irresponsible and arrogant way in which it is being wielded against the Poor that has forced me to use my opportunity to make these unusual remarks in a New Year Speech to you. The problems of my country and other Third World countries are grave enough without the political interference of IMF officials. If they cannot help at the very least they should stop meddling.I have made it repeatedly clear to my own countrymen, however, that whatever decisions are made by us, and by our friends, 1980 is going to be a very difficult year for Tanzania. I believe that when they understand the problem our people will respond to this economic challenge as they have responded to other challenges in the past.

I believe they will bear the further sacrifices, and further burdens, which present conditions impose upon us just as long as they are assured that we are doing our best to share the burdens equitably, and continuing to pursue our own policies.”


(Prepared by Iddy Mwanyoka & Mpoki Mwambulukutu)

27 comments:

Mchangiaji said...

Regarding IMF, I have posted this before and I am posting it again, the true intent of IMF.
(Jamaica) IMF decimating one country after another, even Bashir talking about IMF impulse following issuing of his arrest warrant by ICC. LOL!!

But at the same time, We need to ask ourselves this question, WHY WE(AFRICANS) CAME TO THIS POINT, WHERE WE ARE LOOKING FOR OUTSIDE HELP on bodies like IMF and others to stabalize our own spendings/ECONOMY?

The answer could be lying on this paragraph, we have been buying guns for more than 200 yrs from the west and we are still fighting civil wars, but we failed to advance technologically to come up with our own gun, rather than improvised gun, What, I am asking is this, Why we have been failing and we are still failing to advance ourselves in industrial revolution and in technological advancement?

On Marehemu JK Nyerere,

I do understand JK Nyerere View and I have high respect for him, and again, I never argued his sincerity, but sometime when I think about Marehemu and read more of his speeches, he kinda sound like BAN KI MOON, he would have made an excellent UN representative rather than being our President, he talked about IMF in mid 80's, what about 60's, and 70's after we get, our independence from the British, what we have done then to stabilize our economy, etc before we start considering these BIG forces like IMF, misaada, MIKopo, in 80's ? I am sure we failed on prioritizing our own PRIORITIES then, for the future of this nation for YEARS TO COME.

I sometime wonder Did Pan Africanism agenda, occupied him more than his own domestic agenda,

Was he acting, or enforcing a lone figure on maamuzi ya hii nchi ?

Was he looking for a political scores, in Africa in general. PAN AFRICANISM, less time thinking about own future.

He thought he was smart guy, and I believe he was, but that Hijacked his comprimise instincts.

Here is where my problems lies with Marehemu,

Quote
It(Tanzania) is not prepared to surrender its right to restrict imports by measures designed to ensure that we import quinine rather than cosmetics, or buses rather than cars for the elite.
unquote
By the way this was not IMF agenda, this was Tanzanian business advancement agenda, PERIOD!, So if Zaire, Zambia, Uganda, Rwanda, Burundi, and others wanted to import cars, or cosmetics to be specific on their own chosen internal agenda, would he (Marehemu) would want to stop them ? Where would the revenue come from then? to advance vijiji vya Ujamaa and other social programmes he thought of? and to be precise he did just that, with our neighbouring Kenya by closing our border completely. I believe if we were on right TRACK with our UJAMAA we should have compete with them, and showing them how good we are, rather than avoiding them.

Here is scenario.

"I pay Tanzanian Government via TRA, 8M-10M every month, and I felt it like it is my duty in doing so, and thats to me, is substantial amount of money, it is totalling a whoping 96M-100M T shillings per year, and I believe that this money can be used to invest on Education, Hospital, Techinical Schools, paying Teachers, etc, or whichever the priority or development programme that Tanzania needs at the time. "

So here is my question and my problem, in Nyerere View, would I be considered elite ? Would I be considered less of a citizen? I would have loved to see him answering this question.

Here is one thing, which I believe Mwalimu and all of us we can agree on, by looking at history, we will all agreed on, we have GOVERNMENT, less iffective, Dont know its priorities, most importantly do not advance our common cause for the better future of our NATION, from HEALTH CARE, EDUCATION AND ECONOMY IN GENERAL,

Marehemu, J K Nyerere, thought he had two on sight, Namely Health Care and Education, but it is unfortunate that, both of them needs a sounding a ECONOMY to advance the course.

In other words, YOU CANNOT SPEND THE MONEY WHICH YOU DONT HAVE! is that simple ? IMF exploited this loop hole.

Am I wrong, I will be happy to be corrected on this.

Regards
Mchangiaji

Mpoki said...

Mchangiaji,
You raise interesting arguments on Nyerere and development in Tanzania. However, I would like to pay attention on your articulation that Nyerere did not put priority on the right things.
Nyerere inherited a society that was under colonial rule for almost 80 years. Prior to colonialism, there was neither Tanganyika nor Tanzania. The context was just made up of a variety of ethnic groups such as Wazigua, Wanyaturu, Wahehe, Wasambaa etc. It was during colonialism that these diverse groups were brought together by the colonial administration to form Tanganyika. Prior to their gathering, these societies did not operate as a single political or economic unit. Come 1961, you are Nyerere, what do you do? You are faced with 120 plus ethnic groups living in poverty – again, these societies were created by colonialism, not by Nyerere; there is a significant number of Asians who the colonialist left them with control on all major means of production; there is no system of revenue generation (like TRA today) that has the capacity to meet the economic and social needs of the country; you only have 6 factories in the whole country - with only one that employs a decent number of people (50 employees!); you have just won political independence but economically, the situation is still the same as it was during the colonial days (export cash crops in order to earn foreign exchange to finance your importation of capital goods, pay salaries to bureaucrats, deliver social services etc); Mchangiaji, you are Nyerere in 1961, what do you do in such a situation? Politically you have some factions in TANU – some want the party to focus only on Wazawa, some have policies based on ethnicity, some on religion… bear in mind that the year is 1961, and you are faced with an alternative to neo liberal economic policies…
This is my take. Nyerere saw it as a priority to initiate a nationwide project that would create a national identity - a project that emphasizes peace and unity as central national values. It is why, today Tanzania remains as one of the few countries in Africa that has escaped disintegration. Despite the presence of numerous destabilizing factors in Tanzania, we have become an exceptional case when it comes to the pattern of violence and instability that has prevailed in many parts of Sub Saharan Africa since independence.
When you talk about prioritization, it’s not like Nyerere did not aim to create jobs, provide health care, universal education etc. Within ten years of independence, Tanzania advanced from having only 6 factories in 1961 to about 300 state owned parastatals. Tanzania also boasted one of the highest literacy rates, not just among countries in Africa, but poor countries worldwide. The list goes on and on.
Mchangiaji, I think you are already aware that Ujamaa policies were supported by the donor community. McNamara, the President of the World Bank at that time, poured millions of dollars to support Nyerere and Ujamaa. USAID, DfiD, Scandinavian countries, donor funds were coming in billions. By 1985, Tanzania had received over $6 billion from donors. Nyerere always wanted Tanzania to become self reliant. He envisioned a Tanzania that would produce her own capital goods and all other inputs needed in the production process. He always rejected the idea of receiving aid with conditionality i.e., I give you aid but you have to import capital goods from my country. He wanted aid that would enable us industrialize and become self sufficient. By the way, many of us are praising the Chinese for their assistance to poor countries. The argument often goes like:
“The Chinese are different; they are not like the capitalists in the west. They understand our problems...”
Last month, Tanzania received a few million dollars from the Chinese government as assistance to our Agriculture sector. But how will this money be spent? The answer is, Tanzania will use a big portion of these funds to import agricultural inputs from China. My question is why do you give me money on my left hand and take it away from my right hand? This is what Nyerere always rejected.
In 1985, the IMF and World Bank came to rescue the country, not because they did not like the idea behind socialism, but they came is because Tanzania was facing extreme difficulties with her balance of payments. And this was not only the case in Tanzania; balance of payments deficit swept almost the entire Sub Saharan continent regardless of the post – colonial political or ideological orientation. Why? Simply because, colonialism made Africa produce what it did not consume and consume what it did not produce. And not much has changed today.
Mchangiaji, in order for to have a stimulating debate, let me provide you with an excerpt from an interview – between Nyerere and Oxfam about ten years ago. Nyerere was talking about his encounter with the then World Bank President and his staff in Washington in 1998:
“Nyerere: I was in Washington last year. At the WorldBank, the first question they asked me was, ‘how did you fail?’ I responded that we took over a country with 85% of its adult population illiterate. The British ruled us for 43 years. When they left, there were two trained engineers and 12 doctors. This is a country we inherited.
When I stepped down there was 91% literacy and nearly every child was in school. We trained thousands of engineers and doctors and teachers.
In 1988 Tanzania’s per capita income was $280. Now in 1998, it is $140. So I asked the World Bank people what went wrong? Because for the last ten years Tanzania has been signing on the dotted line and doing everything the IMF and the World Bank wanted. Enrollment in school has plummeted to 63% and conditions in health and other social services have deteriorated. I asked them again: “What went wrong?” These people just sat there looking at me. Then they asked what could they do? I told them, have some humility. They are so arrogant!”

Iddy Mwanyoka said...

I could not agree more with my colleague Mpoki. When Mwalim took Tanzania in 1961 he had less than 15 professional employees(Engineers and Physician). Before 1961 Tanzania economy was based on exportation of raw materials (Agro products and minerals)and consumption of finished goods from colonial. Then when Mwalim took over he had to figured out on how to transform this kind of economic structure. This includes initiation of small and medium enterprises which provided jobs for million of Tanzanian.

Coming back to your question, "WHY WE(AFRICANS) CAME TO THIS POINT, WHERE WE ARE LOOKING FOR OUTSIDE HELP on bodies like IMF and others to stabilize our own spending/ECONOMY?" The primary goal of IMF (prior 1980) was to provide a short term loan for community members in order to balance their payment. This goal exist until 1970s when Bretton Wood system collapsed, then IMF took a different role. In 1980 when Ronald Regan took the oval office the idea of free market based economy thrive across the global. McNamara left world Bank and IMF architect their first mission on how to help developing countries Economic Development, this was the moment SAPs started. African countries were forced to privatized government parastatal, quit subsidies the welfare, and adopt free trade in order to received any assistance from IMF ( Which you need it as long as your community members, or your currency can be devaluated or other member can quit trading with you). Mwalim Nyerere denied this movement, he believed that Tanzania should transform from socialism to any based economy when it feel to do so and not otherwise. The idea behind protectionism was to develop local enterprises to the point that they could compete in International arena.

However, in 1985 Tanzania accepted IMF conditions, we liberalized our economy based on Regan economic ideology. We quit subsidize welfare and agriculture sector which cost us until tomorrow. It was this moment when HIV/AIDS skyrockets because we were not allowed fund Elimu kuhusu Ukimwi , it was this moment when literacy rate plunged and we never recovered, it was this moment when we crippled the local enterprises because of dumped products from west. All these mess was the effect adaptation of Economic Recovery Plan I (ERP I)policy, which was must in order to received any loan from IMF. We stacked with bill and this policy until 1995 when IMF/WB agreed that ERP I was the failure, however they didn't erase the debt because their policy didn't work. Instead they structure ERP II which allowed the government to subsidize health care.

My question to You Mchangiaji how could our governments run away from this trap? You need the money to balance your payment( Capital account & current Account) or International community will quit trading with you. In order to get the money you should abide with their unfair rules.

Weekend Njema

GAME THEORY said...

Kinda weird, JK is supposed to associate himself with demoCractic institutions lakini kwenye hili Mheshimiwa anaona ni sawa kuwahost hawa jamaa...in the midst of a credit crunch

By the way the new GAVANA bwana BEN NDULLY naona kaamua no expense should be left out yaani he is trying to prove a point...hivi mnakumbuka he is the same guy aliyewapandisha his BOT directors kwenye minibus kwenda Dodoma ili kutuonyesha kuwa yeye anajua kubana matumizi!

Latest ni kuwa staff wa BOT wanammiss LIYUMBA ile mbaya maana yeye alikuwa hafanyi mambo nusu nusu yaani alikuwa anafuata nyayo za dedi wake AL MARHUM Daudi Balali..hivi mnajua kama Liyumba zikitokea events kama hivi alikuwa anaagiza suits za staff from SELFRIDGES,London?

aNYWAY BACK TO TOPIC


All i can say is what COLIN POWELL used to say in situation room na staff wake akiona waaaaaay toooo loooong reports: 'I AINT READING ALL THAT SH*T"

Wajomba kwanza eleweni the types that frequent this blog si wajinga kuhusu issues hivyo please punguzeni hizo long posts na kusema ukweli i didnt read the whole thing...lakini JK saa zingine anaudhi kuwa host hawa jamaa.

nani asiyejua kuwa the undemocratic make-up of the IFI boards is compounded by a lack of transparency in their operation. Still beyond the reach of the public is any knowledge of how decisions have been reached and what the process and reasoning was behind the decisions.

For example, at the IMF, executive board documents are published after
five years, executive board minutes are released after ten years, and
other archived material is available after 20 years.

So the time lag means no decisions can be scrutinised until well after they have been implemented, halafu even when documents are released, they are only available at the IMF’s offices in Washington DC, so this effectively makes even the archives inaccessible to most politicians, groups and individuals outside of the United States, an appalling situation for a global institution ambayo JK haoni tabu kuwahost!

In a nutshell my objections to hosting this meet include:

- The IMF is clearly undemocratic in the way it operates (eg, vote
weighting, choice of managing director etc).

- The IMF is clearly untransparent in the way that it operates (eg,
minutes are not made public, votes are kept secret).

- The IMF has failed time and time again both to anticipate, and then
to successfully intervene in financial crises.

- The IMF is not a ‘development institution’ yet is increasingly involved in lending to, and dictating the policies of, the poorest countries.

-The IMF has consistently failed to secure a sustainable exit from
balance-of-payments problems in the poorest countries.

- The IMF’s economic conditionality has been unsuccessful,undemocratic and unfair. Many countries including sisi TANZANIA have suffered and the IMF
has ignored public protest....RAFIKI ZAO NDIO WALIOTUFIKISHA LEO HAPA TULIPO NA lile fiasco la privatization of DAWASA

-The IMF has been unable to reform YAANI instead changing names rather
than policies or practices.

Its also worth pointing out that the few so called developing countries that have achieved poverty reduction have often been those that have ignored the standard policy prescriptions
of the IMF.


anyway Jumapili njema!

UPDATE on MIGAWE aka ZILE MELI KULE BAHARINI naona zimeanza kupungua kiana..leo nimehesabu ziko 11 UNLESS mgawe KAWAAMBIA WARUDI NYUMA ILI TUSIONE

Anonymous said...

GM your such a mess. I strong agree with you. The aim of Keynes to established this institute has changed dramatically over period of time.

US, UK and Japan built up their economies by wisely and selectively protecting some of their industries until they were strong enough to compete with foreign industry. I strong believe blanket protectionism has often not worked for countries that have tried it, neither has rapid trade liberalization. However, what we always need is common sense, forcing developing countries to open itself up to imported products that will compete with those produced by certain of its industry has caused disastrous consequences socially and economically. For instance Tanzanian lost jobs due to trade liberalization, poor farmers couldn't compete with highly subsidized goods from Europe and America. So, all this are results of trade liberalization idea which occurred before safety nets were put into place, those who lost their jobs were forced into poverty.

The IMF has made mistakes in all the areas it has been involved in: development, crisis management, and in countries which made transition from communism to capitalism. In simple term IMF is a spoiler.

As Game Theory explained IMF/WB leaders are chosen behind closed doors and it has never even been viewed as a prerequisite that the head should have any experience in the developing world. This means this institutions are not representative of the nations they serve.

GM at least Meli zinapungua hapo bandarini. I guess week hii hakuna kuhang Kempiski sababu big fish are in town.

salama said...

As IMF and other international finacial institutions results have been the poorest in poor countries, it's going to take a lot to manage the relationship,(aren't they running a deficit too?) and, as we're already stretched so thin economically with no much choices we probably have to go with the flow, as in accepting and imposing their policies (like, most of the times) Unfortunately, they haven't been truly international players. They were created to be lubricants and buffers to countries they were supposed to serve but, Their financial wallahs are still trying to reduce poverty in underdeveloped world, they should first work on reducing money flow from poor countries to rich countries through lots of different disgusting means. May be should be the countries's resposibility but, if these institutions get involved by taking precautionary measures on member countries's economic and social systems, to make sure they serve effectively those who really need their help and not just bail out the country out of their problems and then leave them with the stagnant economy. It's a hard task for them as they put institutional interests above all else under pressure from deep pocketed donors who're interested in increasing their wealth at the expense of poor countries.

With billions of dollars in bilateral aids and still no changes in living standard (e.g) in sub-Saharan Africa, where is the work of reducing poverty? some cleaning need to be done within themselves first.( I wonder if Mwalimu would tell them point blank, loud and clear) But, how can we have a stable, fruitful relationship with them, if we retain our ever greedy leaders? Their mismanagement + bad governments and corrupt leaders = suffering of ordinary citizens.

Mchangiaji said...

Mpoki,

To answer your question, I want to keep it short, and precise.

Another Problem with Marehemu, and strongly say that, this one has been his own personal failure, and he didn't wish to admit it, but he truly understood, on his own conscious mind that, HE FAILED HIS COUNTRY BIG TIME, through his Political EXPERIMENTATIONs from 70s. Through this process, He politicized the whole country, INSTEAD of putting the country to work, in which I give him credit when he first get onto power. He knew the priorities then, and the problem came in mid 70's, when he wanted to identify this country through his own grieves and emotions particularly of the west, through political stagnate.

Na hilo ndio tatizo la kukaa MUDA MREEEFU MADARAKANI! It gets onto you, you become an IMPULSE!

There and then, he started to make BIG MISTAKES, until the time he announced to step down in mid 80's. Precisely because he UNDERSTOOD, he couldn't carry on with his experimentation, proven to be disastrous failure. The EXTERNAL force we are too overwhelming to comprehend, someone must give! We are TOO POLITICiZED, in such away we cannot dig deep, or even contemplating this phenomena.

You know, where he initially get the money to fund his political experiments ? Through foreign exchange gained from agricultural products. We were doing well then, but failed to emphasize, There is the story, WE STAYED STATIC on our JEMBE LA MKULIMA, and We cannot even figure this one out.

POLITICS, is like a POKER GAME, dont show your expression to your opponent, but Marehemu failed to understand this basic rule!

On subject of PEACE, thanks for pointing out that, the colonialists already cut the job for us, in putting all the tribal factions together, mandate them to be one Tanganyika, so the myth that Marehemu brought PEACE in our country is FLAWED, Did we have CIVIL unrest or TRIBAL WARs just after, we get our independence? I am willing to be educated on this.

In regarding of political factions, within TANU, of cause thats normal on any modern day political parties or country for that matter. It is the Job of any president to put this factions on the table, on agreeing thats not AGREABLE.

In your mind if Obama was elected in 60s, would you come to me on 00's and saying Obama brought about PEACE in America, despite of multitude of interest groups on his own party, or of the opponent for that matter ?

In regarding, to the question, of what I will be doing when I was in Marehemu shoes at the time.

I would do exactly the opposite.

By Mchangiaji

misokasick said...

GT

"All i can say is what COLIN POWELL used to say in situation room na staff wake akiona waaaaaay toooo loooong reports: 'I AINT READING ALL THAT SH*T"

I laughed so hard that I can not even explain. It was a good laugh. Man! you got guts. And then you confess not reading. You are the man!!

If I were JK, I would be so suspicious on the interest of such meeting, especially with this finacnial crisis. Well, GT don't we have options. The way I see it, IMF ni business and any good business man focuses on making a profit and at least creating a list of future customers. Lakini as consumers we have options of buying or not. It is up to us to either buy into their business or walk out.

MtanzaniaHalisi said...

I think majority of Tanzanian undermine the role of IMF into their life. To some extent IMF control the life of every Tanzanian. Our children will stuck with the debt for many years to come, IMF/World Bank will not help developing nations to escape from poverty trap. Instead they will continue to push them deeper and deeper into the poverty with their policy which doesn’t make sense.

The adaptation of Poverty Reduction Strategic Paper was just a political correctness and it has nothing to do with African Economic development. The IMF officials are enforcing the programs which are architected in Washington, when they visit the so called “developing nations” they always stay in five star hotels in the capitals. This makes them not to understand about the real problem facing these nations unless they visit the countryside. If this officials could take time and visit rural area in Shelui or Kwamsisi and see how their policies are destroying people lives, may be they would think twice on what policy should be adopted or dumped.

Statistics shows that the gap between rich and poor has been growing for sometime, the number of people living on less than a dollar a day has increased. It is over 40 years since colonial master left Africa, however they still believe they knew best when it come to Africa economic development. I asked them, what make them believe that things will change this time?

What surprised me is the way IMF and World Bank cares about two things inflation and budget deficit. A country can have A+ grade even if it has double digit unemployment rate for years, so long as its budget seems in balance and its inflation seems in control. They architected the Value-added taxes which crippled the small business which are the engine of any growing economy.

My questions to you my fellow Tanzanian are: How can we run away from this trap? It seems like there is no way out, my children and your children will stuck with the debt for many centuries to come, so how can we change it? Do we need to rely on foreign aid? Or it is the time to find the way of paying as we go? To the authors of the article what should JK do? It looks like there is nothing he can do, they tied his hands behind and he is supposed to fight.

Iddy Mwanyoka said...

Misokasic
IMF is not a business like other business where consumer has an option to buy it or walk away. As long as your member of the global community then you’re abide with IMF rules and regulations. If you try otherwise they will suspends assistance; and typical if it does, so do other donors. IMF believes that countries which do poor job on controlling economy in generally, eventually they won’t be able to control foreign aid. This is total non sense.

IMF argued that African nations need to control expenditures based on taxes they collected. However, most of these nations depends more on foreign aid. IMF worries that this aid my dried up and these nations will be in trouble, even though statistics shows majority of African nations received more aid that taxes revenue.

Mchangiaji said...

Mwanyoka,

Thats a million dollar question, It needs a million dollar answer. It is like asking an assembly line supervisor to start his own FACTORY..

We all understand that, it is very tough, it is like climbing on a mountaion top, with ice skating boots, but we need to suffer no illusions, there is always a means of impulsing their advance, slowing them or crushing them all together.

Thats, why they are so secretive, on releasing their reports, they know that they are total failure and disaster to the emerging economies, they go in much length to justify that, and still remain illusive.

In almost they hold us accountable, for any starategic changes in our economy or any decision that we may take. World Bank creating poverty (BBC Newsnight)

Ron Paul World Bank and Poverty Speech

I believe one of the way out, is going on PR campaign, against this institutions.

We have a perfect partner with the current US administration, I tend to believe. This is the time, we cannot allow ourselves to miss this opportunity. and I trully believe that, once the economy in US is on the right track, lets hope so, I believe, he will tackle this problem, and it will be a battle, and at the same time he will be really hard on AFRICANs leader, again on TRUE LEADERSHIP, like no other before, REFORM will be a key word


WHAT WE NEED TO PREPARE NOW FOR SHOW DOWN!

Our country need to gather the experts, that include political figures within and outside the spectrum, economists and other interest parties, It is a battle which needs the best out of the best, which will then, gather details and analyse of what we have been mandated over the years by IMF and World bank for that matter, and highlighting all significant FAILURES and FLAWS, and then the job of POLITICIANS is appealing and put HUMAN FACE on the agendas, COLLECTIVELY. and to be honest, for their credit, we need to take issue ourselves, and wait for Bono or Bob Geldoff to raise our concerns.

To put it simple we need to go after them, on their own tough! Dont wait for them to come here and host them, like we are doing now! We are dealing with the very SMART PEOPLE, they know their days are numbered, this is counter attack, thats why they are here to put a DEFENSIVE MECHANISMS! Wanajaribu kutupiga ngwala. To them this is an assigment with CLEAR OBJECTIVES!

Go where they belong, equiped with this internal reports, analysis, videos(personal stories, etc) and others, and say to them guys your are decimating our country, HERE IS THE PROOF!.

and MOST IMPORTANTLY, we need to come up with our BLUE PRINT, of how we can SOLVE OUR OWN PROBLEMS, with rather realistic thought ideas and alternatives, with precise forecasts and time line, and that means REFORM!, REFORM!, REFORM!, DONT WAIT FOR THEM TO PROVIDE US WITH THEIR ALTERNATIVES, Hopefully that will be a SMACK DOWN!, I hope!

You know what?, you will put a smile on Obamas face, I can guarantee you for that and he would love it, and he will be going mmhh! "Thats my African brothers, stand up for themselves!" WITHOUT OUR HELP, HE WONT DO IT!,

By Mchangiaji

Mchangiaji said...

These IMF Mullahs, are technically impossing Capitalist system on our Country, while having SOCIAL system for the RICH, the poor getting poor, by paying interest on their debt deemed for many years to come and sucking our wealth. they put our lifes on mortgage, we don't pay up, you are severly penalised. Therefore suffocating us with these so called INVESTORS to take it for free without impunity, it is like being in a JAIL, you are desperate for everything, and your mind doesn't think straight, and they love it. How ingenious!

Jim Rogers: Abolish the Fed, IMF, World Bank

No wonder DIASPORAs are sending millions of US Dollars, to Tanzania, while in comparison we get a PEANUT from our gold, as far as to my knowledge, we are almost the third largest gold mining country in the WHOLE WORLD, and still growing, so why we are doing so BAD.

Anyway,

Here is an update of GOLD PRICE, while the MARKET is HITTING ROCK BOTTOM on everything, see the gold price increasing ..

US $710/oz in Oct '08, increasing to $840/oz today. Some predicting to hit $2000 at the end of this year.

By Mchangiaji

GAME THEORY said...

Ohhh yeah ni kweli COLIN never read any long document. Hiyo ni kazi za hao ma runners na kazi yao ni kuleta simplified version of the doc..actually alisema hayo alipoona ile Iraq dossier ambalo jamaa wa CIA wali plagarize tena word by word from that Phd student wa UCLA...Colin alipopewa updated version alisema I AINT READING ALL THAT BULL SH*T...waaay tooo long!


Back to topic in hand...another area that these leeches love is Privatisation, which has been a key feature of Bank and Fund structural adjustment lending for the past 20 years. Yet, in typical fashion, the story is of a ‘ZOTE SAWA’ policy being imposed on all countries regardless of their different social, economic and political circumstances.

This policy, particularly in the case of essential service privatisation, is also based
more on an erroneous theoretical assumption – that governments are
inherently bureaucratic and corrupt while private companies are inherently efficient and well managed than on real evidence that it benefits the poor.

Kwa nini tuandikie mate wakati wino upo? Tazama EASY FINANCE wanavyowatia watu umasikini Tanzania au tazameni kwa makini kwa nini tulilazimishwa kuprivatize DAWASA na katika mazingira gani in the name of PPP ambazo at most zimeshindwa kuwork

misokasick said...

Iddy, I hope I did not give you an impression that I thought IMF is a business. The way I look at the relationship that IMF has with third world countries is of consumer-producer rlationship. Whereby the relatinship is driven by demand and supply. That said, I think those countries who have a bond with IMF have a choice to either continue with the relationship or walk out. You provided us with Nyerere's speech, and if you read it carefully he talks about our countries operating with our own policies and rules instead of being driven by IMF rules and policies that have not proven to be fruitful. I still think a consumer has the choice of either buying or window shopping. May be thrid world countries should also revisit their relationship with WB/IMF, instead of this constant blame of IMF policies.
Nadhani our problem is lack of confidence on our own economist, we have so many educated people who could derive policies that are fit for our countries.

Tusikubali kuendelea kuendeshwa kama magari mabovu na kuchekelea kila kitu kinachokuwa proposed na Mzungu. We should strive for more and invest heavily in human capital. If you have time research a little bit on the history of Norway and see how much it has accomplished. Mind you it used to be a a colony of Sweeden. Please do not come up with an argument of population, they used their resources right.

Ciao
Thanks for sharing your thoughts.

salama said...

Mchangiaji,

(According to Jim Rogers)
Abolish Financial Institutions?
What will happen to poor countries, I think they're a liaison between wanenes and wembambas, or may be the world would not suffer greatly. But, it would definately be wiser to Reform. For both rational and ethical reasons, they hit the bottom down to know that their policies are not working for the benefit of people they're supposed to serve and all they do is keep re-naming their inefficient programs instead of reforming. And they precisely know that, poor countries have nothing they can do except to kiss their fat asses. Not a suprise that they're no strangers to controversy.

Mtanzania Mwanahalisi,

Divine Intervention. may be that's what we need. They could at least help poor member governments develop into self sustained growth and create a middle class to decrease a gap between the rich and the poor.
With this croaking world economy it's obvious that their funds are very modest to be able to tackle many problems in poor countries.
Aid makes governments accountable to donors but, we have little choice but to engage them to survive this crisis and secure finance to support our economy which is in the form of "mwendo wa konokono" because of them.

We need the contagious confindence and trust Mwalimu had to keep going. He was amazingly confident and trusted in himself and his people that we can do it, if we keep trying. I Guess it's the same courage which keep us moving up to this day. He pressed hard on being self sufficient although he knew that it'd take us a while to be able to stand on our own feet without any kind of help. There've been some shortcomings but hey!, we can't deny the fact that he succeeded in a bigger percentage. Talking about mwalimu...

Mchangiaji,

On the subject of PEACE. Yea!, let's talk about PEACE. I love PEACE. Nimeidondokea(lol!).
The word PEACE and the state itself of calm and serenity. Here my dear, will disagree with you. It's one of many things Mwalimu is a LEGEND for. (God bless him) Look around our country at our neighbours. PEACE is the only thing we can always be proud of. It doesn't need a rocket science degree to understand this. Today, I can stand tall with my chest forward and claim that I'm a proud Tanzanian for her PEACE.
Keep in mind, with all the ISSUES Africa has and on top of all that many countries in our continent are still fighting and struggling to bring PEACE to their homes. Yes we have issues but, even the Peace of mind which dwells in us can be enough sometimes. Look how resilient we are!, and am sure PEACE is what sustains us. Lots of people are struggling to make ends meet in our country but, PEACE make them go to bed every night knowing that, they'll survive.
Four words dear,
PEACE, PEACE, PEACE AND PEACE.

PEACE!

Mpoki said...

Mchangiaji,
Thank you for your challenging points. I am in a hurry but I promise to return to you again soon. I will attempt to visit your arguments much as I can. Your narration that Nyerere inherited a Tanganyika that was already peaceful and united is somewhat blemished. If you read the history of the country’s political economy, it is evident that Nyerere played a big role to stop our nation from falling apart. It looks like you are confusing between our country’s peaceful transition to independence and the post – independence experience. I would like to hear more from you in that regard.
No one argues that Nyerere did not make any mistakes in his pursuit for development. The point that I tried to put across was that, at least Nyerere approached development from the” YES WE CAN” perspective. He wanted poor countries to own their development agenda, not to have foreign powers impose top – down policies on us. During Nyerere’s leadership, we had mwongozo and we owned out own development agenda. Where has all that gone? Today we have Vision 2025 MKUKUTA, SAPs/PRSP MDGs… it has just become chaotic. Nyerere once told the IMF, “I came to ask for your money, not your advice.”
Mchangiaji, success and failure on part of Nyerere is debatable. And it is why we are having this discussion in the first place. There are many who concur that Nyerere had his own failures. But there is also a general consensus that his success overrides many of his failures. You seem to belong to the former school of thought but unfortunately you fail to come up with a hypothesis that would defend your position. I belong to the latter school of thought and in the next section I will attempt to argue why.
Let me begin with your timeline of the so called Nyerere’s period of failure i.e. 1970s.
GDP Growth Rate:
From 1971 to 1980 (the pre – structural adjustment period), Tanzania recorded a 3.4% average GDP growth rate. In the post structural adjustment period i.e. 1980 – 1990, the rate was 2.8%. Since 2000, that rate has averaged over 7%. But one has to look at the quality of this growth, not just heralding its quantity like how the World Bank and IMF have been doing. A 3.4% GDP average growth rate of the 1970-1980 period was more qualitative to an average Tanzanian than today’s 7% growth rate. There were jobs, better healthcare, access to education…
GDP Per Capita:
In the 1971 – 1980 period (again pre – structural adjustment period), GDP Per Capita rose from $100 in 1971 to $320 in 1983. It began to decline in 1984 reaching to $94 in 1991. It only began to rise again in the late 1990s. There are several reasons to why this rate began to rise again in the late 1990s and it has less to do with the country’s improvement in its production capacity. We can spare this discussion for next time but let me just say this: I am assuming you know how GDP Per Capita is derived. The late 1990s to present period has witnessed a decline of Tanzania’s population growth rate. It averaged over 3% before but ever since, it has been around 2.5%. What are the reasons behind this decline? There are many factors but declining life expectancy since the structural adjustment compounded with poor healthcare services are largely responsible. Let’s look at another variable. Since 2000, the GDP average growth rate has averaged over 7%. But this growth has largely been an outcome of the growth of exports from the mining sector. So far, we all know that the booming mining sector doesn’t bring any major benefits to an average Tanzanian. This is only an extractive sector, it doesn’t bring that expected revenue to finance our development process; it destroys the environment; and it has very minimal linkage to the local economy in terms of value added activities. Nyerere once said, ‘we will leave our mineral wealth in the ground until we manage to develop our own geologists and mining engineers…’
If you combine these two variables i.e. the declining population growth rate and the booming mining sector, the result is an improved GDP Per Capita which now stands at about $400. This growth is being praised as a success by the IMF and the World Bank. In its recent study on how Tanzania has become an Africa Model of Development, the IMF shows how we have managed to raise our GDP per capita by 50% during the structural adjustment period compared to the period before the implementation of the SAPs/PRSP. But if you take into account of my earlier argument on Qualitative + Quantitative growth versus just Quantitative growth, Tanzania is not a real success story.
Exchange Rates:
Under Nyerere’s leadership, we did well in this area. In 1971, the rate was $7.14; it went up to $9.28 in 1983 but was still under single digits. In the post structural adjustment period, it rose reaching to $219 in 1992. This was largely a result of the devaluation policy, which has been one of the conditionality imposed on Tanzania by the IMF. The IMF and World Bank told us that devaluation of our currency would boom our exports and also bring so many other benefits. But the reality has been quite the opposite - a declining purchasing power of an average Tanzanian, more constraints on our current account, the list goes on and on.
Diversification of the economy
Until today, we are still struggling to diversify our economy away from agriculture. Under Nyerere, we managed to raise the share of the industry sector to GDP to 14% in 1971. Throughout the pre-adjustment period, the ratio stayed above 10%. At that time, Tanzania was exporting not just primary commodities but the share of manufactured goods in the exports equation was also increasing. We had Bora shoes, Tanbond, Simba Plastic, and many other products that we now import either from Kenya or China. Our local industries provided jobs to Tanzanians, plus many other benefits were derived. Then the IMF and WorldBank came in - they promised us that trade liberalization would enable the country to increase its productivity - our industries, as these would become more competitive etc. However, the outcome of these policies was not that promising. The share of industry to GDP started to plummet, reaching 5.1% in 1991. At present, it is around 14%, same ratio under Nyerere in 1971. To make matters worse, this time around, the industrial sector is largely in the hands on foreigners, not Tanzanians. The post adjustment period has killed most of our local industries, one by one and paved way for a takeover of these industries by foreign investors. What really hurts is that, foreign investors (sponsored by the IMF and World Bank) snatched most of the industries we built under Nyerere. We have very few Greenfield projects in the post structural adjustment era and these are mainly concentrated in the sectors that exploit our resources, or are more labor –intensive. In one of his speeches at Edinburgh University, where he was an alumni, Mwalimu once stated:
[“…another factor that makes businesses reluctant to invest in Africa is political instability…but even if African countries were to become paragons of good governance and political stability, despite the corruptive nature of poverty itself, foreign investors would not be coming rushing to Africa. Most African countries still lack the necessary physical infrastructure and the education and training in skills needed for rapid economic and social development….until this lack is remedied through substantial and sustained investment in those areas, African countries could pass all the laws the IMF and the World Bank might prescribe, and privatize everything including prisons, but the foreign investors will not come; instead, they will go to Asia, Latin America or East Europe where the infrastructure is more developed and modern skills are available”.]
We have witnessed exactly what Nyerere argued. FDI flows to Africa are still not that much compared to other regions – Asia and Latin America. And FDIs that get into Tanzania, again, either concentrate in sectors that are resource based or are directed only in urban areas because there is still a lack of physical infrastructure and the education and training skills in rural areas – bear in mind, over 70% of Tanzanians live in rural areas.

Expenditure on Education
In 1976, education carried 14% of the government’s expenditure. The ratio stayed in double digits level throughout the pre – structural adjustment period. However, we witnessed this ratio declining in the post structural adjustment period (from 1985) – it fell to 8.3% in 1985 and even further by the 1990s. Mchangiaji, we all know the importance of education to economic development. For instance, there is a study on Sub Saharan Africa that reveals an increase in education by 1% point of GDP is associated with 3 years of schooling, on average and an increase in annual growth of 1.5% points off GDP in 15 years, translating into a cumulative reduction of the initial poverty headcount ratio by about 17%.
Expenditure on Health
In the 1970 – 1978 period, average government’s expenditure on education to total expenditure was over 7%. We witnessed the decline of this ratio beginning 1985 when SAPs kicked in. Bear in mind that health capital contributes to the accumulation of education capital, with an elasticity of approximately 1.3%. This implies that an increase in health capital of 10% would raise education capital by 13%. Therefore, in a poor country like Tanzania, good health conditions would help promote better educational outcomes to a significant level. Further, an increase in health spending by the government for instance, of 1% point of GDP is linked with an increase of 1.5% point in the survival rate of children under the age of 5 and an increase of .05% point in annual per capita GDP growth, which corresponds to a cumulative reduction of the initial headcount ratio by approximately 12%.

Exports
In 1971, total exports were $350 million. The amount rose to $809 million in 1981. We started to perform poorly in the post structural adjustment period, whereby total exports declined to $530 by 1991. Additionally, in 1980, just before the structural adjustments, the ratio of exports to GDP was 14.8%. There was a brief increase of this ratio, for instance to 23.8% in 1990. But this has not been that sustainable. For instance, in 2006, we witnessed the exports ratio to GDP decline to 12.5%, a level which is below what we had achieved under Nyerere in 1971.
Current account deficit
In 1971, we had a ($-102million) current account deficit. It rose to about ($-628 million) in 1980. But one thing we should bear in mind with this account during Nyerere is that – we somehow managed it well since there were up and down fluctuations, for example, 1971, it was (-$102million), in 1972 it declined to (-$76million), 1973 went up again to ($-127million), in 1974 rose further to (-$346million), in 1975 it declined to (-$321million) and in 1976 to (-$78million). Under Nyerere (prior to structural adjustment period), there is much evidence that we were resilient. But since then, we have been facing a chronic current account deficit. According to latest data, in 2008, Tanzania's current account deficit jumped 34 per cent to 2.82 billion US dollars from 2.1 billion US dollars in 2007. This has largely been a result of rise in imports versus exports – we still export so much little dollar value to finance imports which are of so much more dollar value). Also a drop in aid and loans in the previous years have significantly contributed to our fatigue in current account deficit.
Mchangiaji, in summary, we can all agree that Nyerere had some weaknesses in his economic leadership. However, very few people would argue that socially and politically, he failed. During his leadership, Tanzania was making strides in terms of social and economic development. The major problem that led to economic failure was not socialism per se but many other factors that were also prevalent to other countries in Sub Saharan Africa, regardless of their political or ideological orientation.

Iddy Mwanyoka said...

Comrade Misokasick,
To some extent I agree with you, however I disagree with you when it come to appropriate solution that Tanzania need to take. You mentioned that countries that bound to IMF have a choice either to stay or walk away. To some extent that statement is valid, however not that easy. Before I present my argument on why it’s going to be complicated to runaway now, let me first flashback during Nyerere era.

During Mwalim era, IMF didn’t have any influence of our economic development. Their role was to provide short term loan that we used to adjust our balance of payment. Mwalim didn’t open the door for IMF or World Bank; he believed that Tanzania is a sovereignty country.

Things started to change so fast and around 1985 Tanzania economy plunged into the toilet and IMF took the torch. At this moment we had no choice, economic growth was 1.5%, foreign debt was piled to $5 billion and inflation was 30%. Mzee Mwinyi didn’t have much of the choices, he returned to the shepherd (IMF). This is where nightmare began to unfold; IMF gave the money to Mzee Mwinyi with one condition, adaptation of SAPs (devaluation of shilling, trade liberalization, privatizing government owned company etc).

1995 when Mkapa took the office, he continued what Mzee Mwinyi started. We privatized almost everything from left to right and Tanzania debt continued to pile up to $7.8 billion which was more than 100% of Tanzania GDP. In 1996 IMF and WB introduced Heavily Indebted Poor Countries initiative (HIPC) movement. To receive debt relief under HIPC, a country must first meet HIPC's threshold requirements. At HIPC's inception in 1996, the primary threshold requirement was that the country's debt remains at unsustainable levels despite full application of traditional, bilateral debt relief. At the time, HIPC considered debt unsustainable when the ratio of debt-to-exports exceeded 200-250% or when the ratio of debt-to-government revenues exceeded 280%.

The World Bank and IMF conceived HIPC as a six-year program, split into two three-year phases, designed to generate a track record of good fiscal and economic performance. During Phase I, the country would work with the IMF to implement an enhanced structural adjustment facility (ESAF). The ESAF originally provided concessional loans to poor nations and required countries to comply with a broad range of detailed reforms and conditions, such as privatization of state industries or curtailment of domestic spending. The conclusion of Phase I was termed the "decision point;" it was then that the World Bank and IMF would review the nation's debt burdens and determine how much debt forgiveness they would provide to enable the nation to maintain sustainable debt levels in the future. Phase II required continued implementation of the ESAF and culminated in the "completion point," where creditors would forgive the country's debts in the amount they promised at the decision point.


In 2006 Tanzania became the successful stories concern HIPC according to IMF; some of the debt was erased.
Going back to the argument, at this moment we can not just wake up and said we’re going to stop doing business with IMF. If we decide to kick them out we’re going to welcome what Ethiopia faced in 1997 when they chase IMF out. They suspended all fund to Ethiopian plus encouraged all donors to quit fund several projects, we can’t afford that.
What we need to do is to reduce dependent from IMF/World Bank through phases.

 The first phase is to reduce amount of aid from donors toward our budget. We can do this by cutting at least three percent (3%) of aid annual, and by 2019 we will be able to finance our own budget for about 80% from our own revenue.
 Second phase, we need to reduce expenditure in the way that it will balance with the country revenue. This will happen if we will slash all unnecessary spending which includes projects which doesn’t provide effect to the Tanzania community.
 Third phase, we need to restructure our tax policy and closed all the loopholes. Includes that of migodi ambayo wana deduct cost ya kuzalisha umeme kwenye income statement zao which results ni low profit and hence less tax the government received. Also we need to get away from VAT tax because it just cripple SMEs which are engine of the economy.
All these phases can happen simultaneous and it will sent a clear massage to International Financial Institutions that Tanzania is once again in charge of her economy

Misso, concern Norway I think our economic development struggled is total different compare to that of Norway. They never had been trapped with IMF who controls our destiny.

Mchangiaji said...

Mpoki, Thanks for such a detailed analysis and specifics of economic derivatives, however I understand that you have drawn a conclusion that Marehemu didn't had a good leadership skills of our Economy and it is unfortunate that he dictated it to that effects to save the ideology, and this is where my arguments compounded, and again it is also unfortunate that, this is the similar practices and the mistakes we are currently doing now, and thats the legacy, History keep repeating itself.

If you go back to my first comment, you will see that, I have said that Marehemu thought he had two in sight, namely Education and Health Care, but both of these would need a sounding Economy, and this is where he failed catastrophically.

I will give you such a simple example, On your own house hold today right, if you dont have sustainable financial means of supporting your family either that be education or hospital treatment, you will find really hard paying up for the expenses! SUSTEINABILITY AND GROWTH, is an ideology that can be achieved for those who really seek it, and this is where Mwalimu failed to foreseen.

and let me explain in context, I am not arguing about most of the fikra za Mwalimu, particularly kujitegemea but thats remain an ULTIMATE goal, which again remain elusive on his tenure as the years goes, because of the bad economic strategy, what I am arguing is wasteful spending and resources on Political Experimentation that he pursued during his tenure as president, and then he solely focused on Politicizing the whole country as I have said before, and the whole nation lost the focus on our priorities. it spiral from there on, like a culture and still engraved to our conscious till today, including the so called opposition parties, which hardly make effects on Political spectrum in our country.

Do you know that we had surplus at some stage on our economy, just after our independence, in matter of fact the economy expand much faster than the population growth, in the first decade.

So Here is my question and probably close up the argument, and call it 404? Mpoki, Why we failed to sustain the economic growth then ? if we will be able to answer this question correctly, then that’s an encouraging prospect of shaping our future, and probably be able to achieve goals and aspirations set forth by Marehemu, and I think this is the debate which should be encouraged and will probably stimulate peoples mind and ideas on issues about our History and our former president Marehemu Julius K Nyerere. Once we truly understand the HISTORY, we can then focus on our FUTURE. It is like going through earmarks remove wasteful spending and leave those benefit us all, or post-mortem to be precise, and see what went wrong, and how will fix it to close the gaps, and thats the mentality we need to acquire for this young democracy.

I will give you an example, it would have deemed impossible for a person like yourself to get a job on RTC, Bora or any other government bodies or parastatals, if you didnot hold up to his ideology or critics to that sense, ie you must prescribed to CCM agenda, if you like. I believe a practise which is quietly exist in some quarters, but rather through referencing, it is sad, it is a sort of a legacy still hanging on us.

Salama.
PEACE is beautiful, I don’t underestimate that we have a unity and peace in our country for a long time now, while most of our neighbours and friends don’t enjoy that luxury, and we all want to keep it that way, for SURE! and I have no argument that Marehemu was such a legend and champion on this subject, particularly in Africa, but my initial argument was did we had civil unrest or tribal wars at the time when the british hand over the power to us, Tanganyika to become independence state, I am open up to be educated on this issue, no doubt, I might have not know the unknown.

Salama, the problem is that, this PEACE cannot be sustained for a long time, if there is no real solutions to our social needs, yes one of the solution as mentioned by Misokasick is to INVEST on human Capital, through EDUCATION, job skills and investments, Yes we cannot have VIRTUAL PEACE, while my neighbour is only having one meal a day, a sembe and Limau, while politicians enjoy the ultimate luxury surplus food, Expensives 4*4 and irresponsible attitude. this is a stark warnings, let us be realistic, it is NOT SUSTAINABLE.

No wonder bwana vijicent, amegawa nyama kijiji kizima, anaonekana ndiye Mtu na mwanasiasa wa kweli, wengine wote wanamsingizia, it is very Sad comprehending such attitude and mentality we are possessing in us, we Tanzania in this 21st Century. If they understand we will be in much trouble than we could imagine.

By Mchangiaji

misokasick said...

Iddy my Brother,
You calling comrade makes me want to meet with you. We will have lots to talk about. For now, I will just respond to the Norwegin question. Ni kweli our economic development compared to the Norwegin, might been different, lakini I think pia collectively we are capable of refusing being driven by inapropriate policies. I am sure not all the people in Tanzania have fake Phds or Masters, it is the matter of taking frim decision and gather together all our economist and derive policies that fit with our history and our culture and all the resources we have. Actually nimesoma sasa hivi kwenye Mwananchi, the IMF chief himself suggests that we work closely with our economist at home. I think it is not a bad idea to start with. I will read more about Nyerere and will respond later. If you do not like Norway, lets use Cuba, imagine cuba without the embargo. Cuba realized early on the importance of human capital. They have the best doctors and best minds. may be there is a way we can look at contries that have survived evne in stormy times and may be copy some of their principles.

Ciao
Comrade



"Misso, concern Norway I think our economic development struggled is total different compare to that of Norway. They never had been trapped with IMF who controls our destiny"

Anonymous said...

Obama Says Better Education Tied to Economic Growth (Update2)
By Julianna Goldman

March 10 (Bloomberg) -- President Barack Obama said he will seek tougher standards in schools, merit pay for teachers and reduced high-school dropout rates in a bid for a more educated and competitive workforce in a contracting economy.

“Economic progress and educational achievement have always gone hand-in-hand in America,” Obama told the U.S. Hispanic Chamber of Commerce today in his first major address on education since becoming president. “The future belongs to the nation that best educates its citizens.” Read More..

Sounds familiar

salama said...

Mchangiaji,

First, I see no difference between that jamaa(mhongaji chakula) and this financial lords except that, the lords give us money and jamaa gave them food. But both them have the same aim, EXPLOITATION.
I'm not sure if Mr. Kahn's visitation to places like Manzese was the real deal or just a publicity stunt since that he's already in town FOR THE MEETING.
Instead of the poorest record they have in the poorest countries it should be more investiments and greatest success.
For jamaa's ignorant idea ya kutoa chakula after he messed up, we shouldn't blame his constituents. It's unbelivable that they didn't know what was going on or the reason for him to do that. It's a shame for him kuwafanya wajinga. And I don't even want to blame the system, we should be responsible for each other, those on the high end to ordinaries and vice versa.

We shouldn't put all the blame to this financial wallahs though. If almost half of the aid we get from donors ends on just the few and not many Tanzanian citizens who really need it, mchemsho.

I agree with you 110% that PEACE can not be sustained for a long time under the circumstances we're facing right now and if it persist. It might get to the point people will be driven to the edge. But Mchangiaji, dont't you think that mwalimu played a huge role in carrying on what they left behind? for the country to secure that peaceful state up to now, that's the best thing that happened to us. Even though some of his ideas couldn't be carried on but, his legendary will always be carried on.

GAME THEORY said...

Frankly speaking i didnt read all posts lakini naona mnauzunguka mbuyu kama sisi waswahili tusemavyo!

What do you guys expect when our hourable Finance minister bwana,MUSTAPHA MKULLO ana fake degree na kila mtu analijua hilo?

Seriously that says alot about our country and economy

Mchangiaji said...

GT,

I agree, Enough said!

On Hon. Mustapha.

Fake Degree ???Thats says a lot,
No Transparency what so ever, there isn't a system there which check out on this government officials, and if there is one, considered impotence, that’s why I embrace that idea of BUNGE WATCH DOG!, just to bring the transparency we the public deserve!

You know why Irish Prime Minister resign from his office, I think early last year(2007, is because he could not explain some loans(something like $63,000) he received when he was financial Minister in 1993 - 1994. Can you imagine that!

Poor Kikwete, I think he already exhausted his options, by reshuffling of his cabinet by selecting members within his own party to the high office.

I think he should embrace the idea of BIPARTISANSHIP, there are pockets of immense talents out there playing cat and mouse with the government, why don't he bring them in, to the higher office ?? and thats could only be a last option. He will be embraced!



By Mchangiaji

Chambi Chachage said...

Folks, I suggest that we read/re-read Minister Mkullo's official letter to the IMF cited in the article on the IMF's Policy Support Instruments (PSI)below - that letter of intent speaks volumes on why we keep begging IMF for support even when we can do things on our own:

http://udadisi.blogspot.com/2009/03/because-imf-says-so.html

GAME THEORY said...

Kwa nini tunauzunguka MBUYU?

tunajua kama MKULLO ana degree feki na nadhani mheshimiwa keshambiwa hilo sasa leo anapewa wizara nyeti kama hiyo

inaonyesha wazi priorities zetu ziko wapi

Can you imagine akikutana na accomplished msomi kama GAVANA ndullu mazungumzo yao yanakuwaje

aibu tupu

Mpoki said...

I have a comment on the visit of Mr. Kahn, the IMF chief at UDSM last Monday:

About 2 decades ago, the IMF said Tertiary (university) education in Africa is a luxury, therefore African governments should not spend money in that area anymore or else... And the IMF has not changed its position since then.

Our lecturers, e.g. in the economics department or/and department of development studies, or any other, should have used this opportunity to prepare their students for a meaningful discussion with the IMF chief on matters pertaining to IMF and Development, education in particular.

The ongoing crisis in our education system, from primary to tertiary levels, is largely a result of IMF's pro - rich policies(not pro - poor policies). Besides having a direct effect on students, these policies also indirectly affects the quality of education at UDSM. These policies restrict recruitment of new lecturers (PhDs) at public universities, by the government.

Today, you can hardly find PhDs at UDSM under the age of 40. Why?
1. Because the government cannot hire new PhDs (UDSM, Sokoine)anymore (due to IMF conditionality on government spending on education), and the current PhDs are retiring at a very high rate.

2. The curriculum needs to be reorganized if we really want to produce productive PhDs to aid in our innovation system, in which president Kikwete recently mentioned that we need to start investing in R&D...

Under the current system, it is almost impossible to complete your PhD under the age of 45 in Tanzania. Besides, the incentives for one to pursue doctorate education, e.g. at UDSM, Sokoine Univ of Agric, are no longer there. But even if you choose to pursue a PhD in the country, by the time you establish yourself in your research area of interest so that you can actively contribute to your country's development process (for instance in agriculture), they knock on your door that "its time for you to go" - your retirement time is up (age the age of 60). Given the declining life expectancy in Tanzania, which is now at 50, largely due to deteriorating health sector, it is hard to imagine how we will make it in this 21st century, which is largely driven by knowledge.

Now, when the IMF chief, Mr. Kahn tells our UDSM students that Tanzania now needs to rely on her own experts in the development context (e.g economists engineers etc) what does he really mean?

Chambi Chachage said...

How many of us know - or remember -that in 1980 Tanzania hosted the North - South Conference on 'The International Monetary System and the New International Order' at the Arusha International Conference Centre (AICC)? This conference came up with 'The Arusha Iniative: A Call for a United Nations Conference on International Money and Finance'. In the former conference Mwalimu Nyerere gave a message entitled 'No to IMF Meddling: President Nyerere's New Year Message 1980 to the Diplomats accredited to Tanzania'.

Among other things, Mwalimu Nyerere stated that "Tanzania is not prepared to devalue its currency just because this is a traditional free market solution to everything and regardless of the merits of our position. It is not prepared to surrender its right to restrict imports by measures designed to ensure that we import quinine rather than cosmetics, or buses rather than cars for the elite. My Government is not prepared to give up our national endeavour to provide primary education for every child, basic medicines and some clean water for all our people. Cuts may have to be made in our national expenditure, but we will decide whether they fall on public services or private expenditure. Nor are we prepared to deal with inflation and shortages by relying only on monetary policy regardless of its relative effect on the poorest and less poor."

He also reiterated "the importance of the Third World demand for changes in the management structure of the IMF" and emphasized that the IMF "needs to be made really international, and really an instrument for all its members, rather than a device by which powerful economic forces in some rich countries increase their power over the poor nations of the world."

It was in this conference that Mwalimu posed that famous question: "When did the IMF become an International Ministry of Finance?' We know what happened afterwards. What happened is what is making us discuss the IMF the way we do now. Some people were and are indeed ahead of the times!