Wisdom
JF-Expert Member
- Sep 28, 2010
- 472
- 111
For the past 10 years, Tanzania has been proudly announcing promising growthfigures released by the World Bank and International Monetary Fund.Statistics show that Tanzania's economy has been growingat the rate of 6-7 per cent for about a decade now.Economically speaking, 6-7 per cent is an impressiverecord in growth, but it does not necessarily lead to economic development.Due to the on-going debate and confusion which makespeople not to understand as to why the economy has been growing withouttransforming people lives, I think it is about time now that people get to knowthe difference between "economic growth" and "economic development" ordevelopment at large.Economic growth is a narrower concept than economicdevelopment. It is an increase in a country's national output which can becaused by an increase in the quality of resources, an increase in the quantityof resources and improvements in technology.In other words, it is an increase in the value of goodsand services produced by every sector of the economy. Economic growth can bemeasured by an increase in a country's gross domestic product (GDP).On the other hand, economic development is a normativeconcept - that is, it applies in the context of people's perception (good orbad).The definition of economic development as given byMichael Todaro (2011) is an increase in living standards, improvement inself-esteem needs and freedom from oppression as well as greater choices.The most accurate method of measuring development is theHuman Development Index, which takes into account several indicators such asliteracy rates, life expectancy, access to healthcare, education and so on.It also leads to the creation of more opportunities inthe sectors of education, healthcare, employment and conservation of theenvironment.Most significantly, economic development is the one whichconsiders an increase in the per capita income of every citizen as opposed toeconomic growth.Economic growth does not take into account the size ofthe informal economy, which for developing countries like Tanzania, constitutesa big share in terms of the work force and in terms of economic productionsince most of the activities are done outside industries/firms without anyeconomic transactions to be accounted for.It should be noted that, economic development alleviatespeople from low standards of living. It takes into account factors like leisuretime, a working environment, the quality of housing, shelter and clothing,while economic growth leaves aside all those and concentrates on the quantityof output.
Why growth without development?Tanzania's economy is dominated by few sectors, whichmake economic figures less reflective of the lives of the majority of people.For instance Dar es Salaam is reported to be contributingabout 75 per cent of Tanzania's economy, but less than 10 per cent of thepeople in Dar es Salaam dominate economic production.At the same time, statistics show that over 70 per centof Tanzania's workforce is being employed in agriculture and most of them arerural dwellers.This means that for economic data to be reflective of thelives of the majority of people, then rural areas are supposed to have morecontribution than Dar es Salaam.The service sector is currently contributing 48 per centto the GDP. Major contributors include finance, tourism and trade.It should be understood that the service sector does notproduce any goods, does not create as many employment opportunities as it couldbe with industries or agriculture, but on top of everything, service deliveryfirms are owned by few individuals who benefit directly, employ fewer workersto gain more profit and the majority of the population benefit as customerswhich means more expenditure than earnings.Lastly, it should be known to Tanzanians that economicgrowth is a necessary, but not a sufficient condition of economic development.There are several other factors to be taken into accountin assessing economic development.
From The Citizen, Dar es Salaam
Why growth without development?Tanzania's economy is dominated by few sectors, whichmake economic figures less reflective of the lives of the majority of people.For instance Dar es Salaam is reported to be contributingabout 75 per cent of Tanzania's economy, but less than 10 per cent of thepeople in Dar es Salaam dominate economic production.At the same time, statistics show that over 70 per centof Tanzania's workforce is being employed in agriculture and most of them arerural dwellers.This means that for economic data to be reflective of thelives of the majority of people, then rural areas are supposed to have morecontribution than Dar es Salaam.The service sector is currently contributing 48 per centto the GDP. Major contributors include finance, tourism and trade.It should be understood that the service sector does notproduce any goods, does not create as many employment opportunities as it couldbe with industries or agriculture, but on top of everything, service deliveryfirms are owned by few individuals who benefit directly, employ fewer workersto gain more profit and the majority of the population benefit as customerswhich means more expenditure than earnings.Lastly, it should be known to Tanzanians that economicgrowth is a necessary, but not a sufficient condition of economic development.There are several other factors to be taken into accountin assessing economic development.
From The Citizen, Dar es Salaam
