Dar Es Salamm, Tanzania Tanzania and Malawi have no financial muscle to embark on a fully fledged war. Apparently, donor-funded economies are struggling not only with recurrent budget deficits but also finding it difficult to deliver adequate social services to the people. Economists have warned that either side may have military but not financial muscle warranting a fully fledged war against each other over a border dispute, saying economic implications will be heavy to both economies They argue that given the current budget deficit and donor dependence it will be unwise to go into war as it will have negative impact onto the economy, especially on delivering social services. The Mzumbe University's Dar es Salaam Business School Senior Lecturer, Dr Honest Ngowi, told East African Business Week that the history shows that Tanzania economy has yet to full recover from the Uganda war of 1979. "The second war is inadvisable, let's exhaust diplomatic bag," Dr Ngowi said, adding, "There is no war which is good." The senior economist added: "The country (Tanzania) has no economic acumen to finance a war; (beside) we have overtaxed the existing business to the point of milking them dry." He also said it (war) will be a negative score on investments and business climate, especially for emerging countries because "war sacks the economy." Institute of Management and Entrepreneurship Development Chair, Dr Donath Olomi said venturing into war has to be the last solution after diplomatic talks fails. He said the government currently faces a number of challenges it has failed to address ranging from teachers and doctors demands to infrastructure provision. "There is a rumor that the deployment of (Tanzania) soldiers has begun, even that is very expensive given the current state of our economy. Let diplomacy prevail in solving this dispute," Dr Olomi, a former senior economic lecturer said. The economist said "war is bad not only economically but also socially to Tanzania and Malawi as both budgets still depend substantially on donor countries". According to Bank of Tanzania, the country's total foreign reserve at the moment are sufficient to cover for only four months of imports while most war machines and accessories are expensive and this amount is peanut. However, BoT's July monthly economic review shows that at the end of June, external debt stock stood at $10.4b, being $385.9m higher than the amount recorded at the end of May 2012. "The ratio of external debt to GDP in nominal terms stood at 43.0% as at end of June 2012," the report indicates. However, BoT said, as per provisional results of the latest Debt Sustainability Assessment (DSA) conducted this March, the present value of external debt to GDP was 18.9% against the sustainability threshold of 50%.