1) Mr. Mkapa should have started with a clean sheet by getting rid of all corrupt politicians and civil servants so as to close the chapter on the past and renew peoples trust on the CCM and the government. Instead the same faces are in government pillaging the country. As a result undue legal and political continuity with the past regimes are still a burden, contributing to erosion of moral consciousness and has created a special hierarchical structure of political and economic power. Former politicians, civil servants, and ministers are still in power based highly on their CCM affiliation, enjoying privileges of the new economic power structure and political tenure. In many aspects a real transformation is still ahead of us. Tanzania is stuck in the past and sinking much deeper than is willing to admit.
2) The emergence of the new world order of globalization, from the previous cold war system which is Globalization is transforming the world with integration of capital, technology and information across the national boarders. This new system is uniting a coffee peasant in Kilimanjaro, Taiwanese entrepreneurs, and German engineers in single global village. The advantage is such that even a third world country with good political leadership and sound economic polices, has a chance to compete and succeed in a global economy. Coincidentally, Tanzania had a perfect candidate and who seemingly had all qualifications needed to do the job. That man is none other than Mr. Benjamin Mkapa, his considerable overseas exposure and diplomatic experience would put him in better position to deal with foreign leaders and the challenges of globalization. Perhaps, even more it was thought, due to his overseas experience he understood the concept of market economy for that would have helped to shape his government, and set Tanzania in the path for long-term sustainable development.
Hence, after Mwinyi, all Mr. Mkapa needed to do was a bit of cleaning, remove corrupt leaders immediately and then tackle widespread corruption problem at once. The rule of law should have been put into effect immediately, and strengthening of civil laws. Followed by gradual establishment of economic and financial institutions that would have supported the foundations of market economy, trade laws, property ownership, business contracts, tax laws, joining forces with civic institutions. Once those institute were in place eventually introduction of macro level economic policies could have taken place. The market economic system is very mechanical, it is a system in input and output, but first you have to put all the pieces together. This would have required, Mr. Mkapa to set clear economic goals. Then, the President should have identified Tanzanians, who have the education, the work experience, and unbiased knowledge of how the market economy system works and few overseas advisors to help him tackle economic issues. This team of State House Economic Advisors regardless of their political affiliation, should have been responsible to prepare economic plan covering all bases such as deficit reduction, job creation and growth, increase productivity, and privatization policies. The team could also have advised the president on other issues ranging from, labour laws reform, business contracts an trade policies, curbing corruption, government transparency, infrastructure enhancement; water, sewage system, electric, gas, energy plants and government financing mechanism. Also Ruksa legacy should have been continued but with modification, such that; all businesses should have been registered for legal and tax purposes, as well as the individual source of income be identified.
3) Furthermore in Tanzania, the roots of its economic malaise are deeply imbedded in an electorate and a party that seems unwilling to accept that the key agent of economic growth is the entrepreneur, not the government. Historically, the leading part CCM has been part of state nobility who naturally place their trust on party membership rather than talent. When a leader of a country has fundamental disdain for his own people, and therefore prefers to deal with foreigners, no one should be surprised at the consequences. The result is a declining economy and a broken system from severe shortage of economic contributors, particularly from the higher-producing private sector. Mkapa needed to change that by appointing new ministers and other civil servant leaders, new people with fresh ideas on how to run a modern economy. Instead, not much has changed as most of the ministers and civil servants have been there since Nyereres era. In the US average government minister has a career span of four years, and no longer than eight years, in Africa you stay in power until you drop dead. Why?, In Tanzania as in the rest of Africa, political carrier goes hand in hand with financial reward, also it is the source of wealthy. Most of them should have passed the torch soon after Nyereres departure, as clearly, that was the sign. More seriously, nothing in the record has shown that they have been effective in any task they have undertaken. In their careers most of them are corrupted and have misbehaved, only to be given another post. Obviously, their way of thinking is completely outmoded to keep up with the new ever-changing progressive world. Ever wonder why a Surgeon is a minister of defense or why an army general is a minister of local governments? Relatively, some of the senior government officials are barely educated; let alone the experience necessary to run a government organization. As a result the so-called new government is actually the same old government, despite the new head. It is still based on principles of party loyalty while protecting each other mischievous behaviors and interests, holding firm on the wheels seeking to preserve its power while manipulating the law.
4) Any African countries that need to attract a significant amount of foreign capital, must establish a firm legal order, based on reliable, dependable and enforced set of laws. Despite presence of legal system, Mkapas administration, does not ensure the working of law and justice in the country. Those who suggest the reason being ignorance or negligence and not intentional, should ask why there are so many scandals within the government, yet lack of legal action. Either way the general mistrust of the organs of the state, including the system of justice continues to prevail. As a result lack of insufficient trust and capital from foreign investors. Recent the Auditor general confirmed that there is more than $2 billion US in foreign banks, ask yourself why? Because if we had the good economic environment, a lot of that fund would be invested in Tanzania. But perhaps the most important question is this, was this money obtained legally by those who have put it outside?
Hence, these government failed to enforce the legal framework of laws and regulations, however most importantly is the environment for which people can pursue their ambitions lawfully and freely within well-formed, enforced, set of rules. Partly, the majority of Tanzanian output originates from the informal sector or underground economy (wamachingas, or kiosk owners); this is due to lack of infrastructure (premises, distribution centers, shopping centers, storage facilities, etc) to support medium and small businesses, and lack of known tax and regulation framework to establish legal business. As a result most of the output is unaccounted for, and no tax collection takes place. On the other side, majority of the Tanzanian business community of African, Arab and Indian origins who have well established business premises, explore this lack of legal and tax framework, as well as lack of enforcement to avoid paying taxes while sending money overseas. One of the prerequisites for establishing market economic system is that all produced goods and services must be accounted for, like any other system it is based on input-output mode. Government needs to create the system to which this can take place.
5) Also, this leadership lacks understanding that market economy function well only in an ethical environment, where moral environment of elementary justice trust and honesty exists. Transformation can only really take place when these prerequisite conditions have taken place. The set of civic virtues, principles and practical morals form what is called social capital has disappeared. If government leaders continue to misbehave and get away with it, the society learns it is acceptable to cheat, lie, corrupt, and abuse power. This environment has translated to lack of mutual trust within the society and especially in the financial markets and institutions. Leaders must walk the walk and not just talk the talk, Nyerere was good example of this virtue. How can a public be civilized while the leaders are not? No amount of privatization or foreign capital can create economic progress unless Tanzanian leaders have set example of personal responsibility, accountability, high ethical and moral values, as no one should be above the law, clearly this is not happening with this administration.
6) Tanzania like the rest of Africa is highly dependent on the foreign aid, which is one of its major obstacles for progress. African leaders continue to rely heavily on advice and knowledge of foreign economist and organization such as IMF and World Bank. These organizations and the western countries in general, have no priority in advancing African nations. More importantly, African leaders have to understand progress thy-neighbor policy is never on the agenda of developed nations. Africas plans for progress have to be based domestically. Foreign aid, technical assistance, loans should then be channeled to those plans already underway or those that lack funding. People who have extensive knowledge on the subject matters and professionals who have worked in western societies could provide great assistance for sector planning and reforms in the areas of their expertise. Asian Tigers countries used experienced citizens both domestic and abroad with knowledge base and expertise in the fields, to help with the economic plans and reforms.
While Mr. Mkapa is seeking advice from the World Bank and IMF on how to improve our economy, same type of advice that Nyerere had refused to compromise because of their implications. The stabilization and structural adjustments, which is the World Bank and IMF famous recipe for third world is highly biased, that is a fact. It falls hardest on the poorest, never produce favorable results but leave the countries with huge debt problems, while the immediate beneficiaries are the lenders. Complying with IMF and World Bank terms is equivalent to shaking hands with the devil. Unfortunately, that is a recipe that most African countries are trapped in, and historically none of the nations ever emerged better economically. Even more difficult is if the government is too unstructured to properly utilize these types of loans. When funds are borrowed to finance a project that generates income that is considered a good investment. The stream of income from the investment could be used partly, to settle the debt overtime, and part of the income to maintain the investments. No loan should be used to buy food, medicine or government vehicles. Instead government should allocate loans to project that generate revenues such as factories, water supply plants, electrical plants, and telecommunication systems. Recently, Pesambili said a portion of the foreign loan on the supplementary budget, was used to pay civil servant salary. A big no !
7) This administration should have reviewed its education policies and set tough goals to ensure that young and old Tanzanians alike are properly educated to be able to function in the 21st century. The goal of government should be to raise the minimum standard education to Secondary school level. Build more schools at all levels, train more teachers, improve the curriculum, and to make sure that no child is left behind by creating more specialized branch of education institutions for those who could not attend Universities. Those new institutions should have composed of Technical, Electronics, Agricultural, Veterinary, Finance, Accounting, Music, Art, Designing, Information/computer Technology, Sports and Fitness institutions, in order to produce diverse workforce. Ministry of education, should have set a curriculum based on advance economy curriculum and certified the programs to make sure they produce quality workforce.
The big picture is important here, what skills are the most valuable in this century? How can our country ensure that all its citizens have a share in the new global economy? To outline these goals the government should seek more advice in planning and organizing education system from a neutral country of highly educated citizens like Japan or Scandinavian countries. The growth of Asian tigers is highly credited to the fact that those countries spent additional money educating its citizens, sending them to America and Europe in the sixties, seventies and eighties to be educated. Asian countries now compose a highly adept work force in the world. Despite worries of unemployment, it is better for a country to have a large educated population, as in the long run, given good incentives and policies, this group tend to become more innovative, entrepreneurial creating self employment forming their own businesses. Large pool of educated domestic workers also tends to attract foreign direct investment from developed nations. India is an excellent example of a poor country with highly educated population that is currently attracting foreign direct investment.
For Tanzania to make headway into the 21st century, it has to commit itself into educating its mass population, improve healthcare of its citizens, improve its infrastructure, water and sewage system, electric systems, highway and road system, and by the way all these is a work of the government. In developed nations, most of this work is financed by tax revenue and public finance. The larger the private sector, the larger the government revenue pool from tax base. However, to increase tax base all businesses need to be registered, and all vendors should be required to pay fixed amount of tax per year in form of business licenses. But the government must provide the infrastructure for the market system to take place as I said earlier. These can be accomplished partly through public financing. Public finance through bonds and loans can only be achieved if there is improvement and discipline in fiscal management at all levels of the government, increase in transparency and elimination of corruption. No serious investors foreign or domestic will commit their serious capital to a country that has poor governance, poor enforcement of civil, corporate, and business laws and a highly bureaucratized government.
These sectors such as education, health care, science, culture, social service, and infrastructure such as roads, railway, water supply and energy sector cannot be left to a mere interplay of market supply and demand. These are sectors that cannot, by their nature be reduced to a mere game of supply and demand These sectors belong to the sphere of governance, and it would be an extreme simplification to think that privatization and the autonomous forces of the market are the only salvation. It is necessary to look into the functional ways of financing these sectors, utilizing cost and budget analysis and quantification of supply and demand, since the market does not provide sufficient funds. It is not by chance even in countries, where philosophy of deregulation and privatization was applied first hesitated for a long time before including these sectors into the privatization programmes. And when they did so after a delay- the results are often highly ambiguous. So to attempt a blanket privatization in a country, which faces an unprecedented denationalization to an extent, which none of western countries could even imagine, is a strategic mistake. Public finance of these sectors would depend on climate of confidence by domestic and foreign banks, which cannot ensue when the financial discipline is completely broken down.
9) Corruption is largely caused by the absence of rule of law, and or the absence of enforcement of laws, lack of accountability, and lack of political will which means an ineffective government. To get rid of corruption get effective government, which means no one is above the law, and laws are known and enforced, the penalty of engaging in unscrupulous activities has to be higher enough to deter people from engaging in those activities. This problem can be solved anywhere in Africa, but most government leaders are corrupted, and the incentive to weed out corruption is therefore mute. Part of the problem in Tanzania is many leaders are not willing to abandon the plunder system, since this is how they are able to build their mansions and afford their four by fours vehicles. Notice Tanzania is not registered in any of the programs run by Transparency International Organization, based in London. This organization run programs such as monitoring Improving Honesty and Transparency in Public Administration, Monitoring of public institutions, Surveys on Corruption (Corruption Meter), and Corruption control in public procurement. This indicates that Mr. Mkapa has never been serious in rooting out corruption, even though this would have improved Tanzania image abroad, especially to investors. Despite presence of civil and judiciary bodies such as court system and police, the legal system is nearly obsolete. It favours political leaders and those with high government connections. The system seem only to work while pursuing the petty thieves and those who in illegal opposition for the government. All illegal activities such as fraud, corruption, embezzlement, and theft that goes on in public sector and the government, goes unpunished. These illegal activities have led to illegal possession of material wealth of tremendous proportions by most senior governments and public officials. It is general knowledge that none of them earn enough from their salaries and perks to be able to afford those types of assets, yet Mr. Mkapa has turned a blind eye on this matter.
Also, due to prevalent corrupted culture the outcome is that few people are willing to put an honest day of work to achieve success. Largely the public seems to think; the government has plenty of money, otherwise why all the bigwigs from the government are living large with their Pajeros and mansions at Mbezi beach. It is now viewed the only way to acquire wealth is to join the leading party or the government or public institution and swindle your way to wealthy. A monkey sees, a monkey does, its all in perception, and leaders should understand this. Besides why take a long run, while there is a short cut. Ultimately what determines development is the mentality of the people. If citizens are learning from their leaders, that corruption, embezzlement, theft, fraud of public property is the way to succeed, dont be surprised why progress is untenable.
To eliminate corruption among leaders, every public servant should be required to declare what they own. In addition, all public works procedure and contracts and including privatization procedure should be opened to public hearings and outside oversight. Also, the government should start a telephone hotline so residents can report dishonesty officials, bureaucrats, politicians and crooked cops. Transparency International, corruption watchdog group should be allowed to conduct corruption survey within the country. This will greatly reduce corruption but only if the culprits are prosecuted. One of the methods that has worked well for industrialized nations, both within government and private sectors, is to establish a system of checks and balances and separation of tasks. This is done to avoid conflicts of interest and concentration of power.
The first step towards real reform and progress will only begin when every Tanzanian has realized there is no free ride, and especially those who work in the government. The only premise that has made capital system successful, as a model of progress is the fact based on rules and ethics. The principle is such that any person can obtain and maintain his or her wealthy, through hard work but more importantly as long it is acquired legally, and through known channels. Such system encourages personal initiative, entrepreneurship, innovation and establishment of legitimate businesses. Therefore, there cannot be any perception that other people are benefiting from their status quo due to political office, political affiliation, ethnicity, age or gender. The current prevailing environment is precisely that, those in power continue to benefit, at taxpayers expense while expecting the rest of the population to work hard.
10) In most developed nations, Presidents lose elections due to high unemployment levels. Employment is a basic foundation for all market economies and a cause for developed nations. Developed nations maintains 96 percent employment average. High employment is the sign of progress, innovation and growth within a society. High employment means goods and service are being produced for consumption and for trade, which means higher GDP. This also means higher revenue for the government from income tax, sales tax and less import costs. Creating more employment would require Tanzania to use its natural resources as a main source of employment. Convert natural resource into productive investment, educate and employ masses of our population to produce good and services. The end product of our natural resources has to be then supported by right channels of distribution from storage facilities and distribution centers retail facilities such as malls and shops. All products and services can be accounted as part of GDP and tax revenue collected as money change hands. There is a clear need to build good roads, shopping malls and service centers to enhance distribution of goods and services.
Mr. Mkapas government should have created plans to boost local employment instead of relying on foreign investments. This could have been organized in what one could call "Task Force Neighborhood," It includes garbage collection, construction of roads and walking pavements, repairing of schools and hospitals, and payments for other public works to provide some infusion of money into local neighborhoods. This could be a rolled into a long-term strategy to build our local and national infrastructure, sewage system, energy system, water dams and other basic infrastructure. Germany was the first country to build highways, simply because it needed some way to boost employment to keep its population occupied and avoid mass unrest. In addition to maintain high employment, professional occupations such as doctors, nurses, engineers and teachers, retirement age should be extended due to the shortage of professional workers. If retirement is doomed necessary, they should be rolled into teaching new generation and or assist with nation building.
But, Mr. Mkapa his policies have never encouraged employment. Why does this government allow mining of Tanzanite, gold, diamonds and other minerals to be shipped and processed outside the country? Or why do foreign ships allowed to fish uncontrollably along the Tanzanian coast? This are just few examples, such cases can be multiplied and varied almost indefinitely. But the big question is to why are the natural resources extracted from our land and processed elsewhere? The point being, anything that is derived from Tanzania land should be made, processed, refined, and packaged, in the country so as to generate further employment. Foreign investment is important as contribution to technological advancement, capital formation but, most importantly job creation. Not all market capital system are equal, French government maintain an average 40 percent ownership in all production sectors, including natural resources. In Germany domestic banks act as shareholders of local and International Corporation, not foreign investors.
Therefore, unless you can figure out a way to increase productivity, you havent figure a way to increase employment, which means you have not figured a way out to progress. Countrys natural resources are not the main source wealth, look at Japan and Taiwan, which have none, and then look at the Arab countries with have plenty of oil. Therefore, heavy focus on natural resource alone is misguiding. Planning and organization of economy is the key to building a progressive society
11) Privatization has not bare results due to lack of local participants or participation. If locals are not willing to participate to making these business successful due to the perception, that there is nothing for them. Privatization policies should have been more realistic following the example of Asian Countries, at fifty-fifty level, meaning 50 percent foreign ownership, and 50 percent local. Privatization in Asian tigers countries made a law that all important substitutors foreign firms had to produce locally and usually in association with local partner if they wanted to gain access to the market. This includes privatization of their industries, which meant that all foreign companies had to have a local partner. Asia countries made sure local manufacturers and citizens were part of the bidding process and participated in running those companies so as to gain the best management practices. More importantly government legislature required western firms to localize progressively by selling of a certain percentage of their shares to local organizations within certain contractual period. Further, government required that a huge percentage of profits to be reinvested in the economy to create more jobs. These polices present a more well thought out progressive sensible privatization policies, intend to benefit both foreign investors and the local country.
Privatization on its own is not sufficient for a turnaround economy or improves efficiency. Neither can it achieve the desired effect without competition and efficient regulation, especially if the type of goods and service are monopolistic by nature. Unless both these conditions, competition and effective regulation are met simultaneously privatization would miss its economic target. Any simplification of these complex problems, as Mr. Mkapa seems to believe in the form of ideological formulas such as private ownership is by definition more efficient than state ownership is theoretically erroneous and can result in unnecessary losses for society. Market competition needs to be protected, supported, and cultivated. Otherwise, the market left to itself tend to subvert competition. Unfair distribution of government assets, public works contract, or privatization is harmful to competition and tends to build either monopolistic structure or economic collapses of public companies, and results is a waste of resources.
Hence, it was to be done transparently, and everyone should be given a fair chance for bidding and ownership, through a well-defined and established legal and market system. The most important element however is to make sure, that qualified citizens participate in running the company, localization with domestic manufacturers, and profit reinvestment in the local economy. Bad governance in itself is but destroying the incentives to create progress.
The current goverment privatization policies are not geared to help the economy. Scandals surrounding privatization aplenty, with fewer result or benefit to Tanzanians. Natural resources that are supposed to help Tanzanians are being shipped out in containers, while investors continue to enjoy extended tax-free holiday. Take an example of Barrick Gold Corporation agreement with the government on acquired the mines in 1999, at Bulanyulu, the government gets 5 million US dollars annually for 15 years while the owners will reap 3 billion US dollars. At the time of the deal, gold resource base at Bulanyulu was established at 3.6 million ounces. But KMCL later established the reserves have tripled to 10 million ounces, as LEAT lawyers claimed. Hence, these government cannot claim to have less income to finance development in other sectors, while the looting is extended to foreign investors. To sum up, these government privatization policies can be illustrated by an example of a farmer who gives his cow to a neighbor who has none, and ask the neighbor to milk his cow, and expects plenty of milk in return.
Gold is the only currency of choice for any Central Bank where all world strong currency is pegged. Gold reserve has duo purpose, as SDR, which is acronym for Special Drawing Rights a.k.a. 'paper gold,' is a monetary instrument issued by the International Monetary Fund, representing special drawing rights for one 35th of an ounce of gold. Its also used as an instrument of Exchange Stabilization Fund (ESF). This follows, that an increase gold depository or reserve in government treasury would enable Tanzania to borrow or exchange its gold repositories, for the much-needed foreign capital. Hence, the much-needed capital is right at our backyard, yet we allow it to be shipped in the containers to foreign countries.
Once more, Tanzanians will be naïve to think this is not a well thought out strategy. Mr. Mkapas privatization policies are made to benefit him and few of his cronies in high positions, after leaving the office. The fact that a president of a country will agree to such deals, while the country needs the much sought after foreign currency is an aberration, and mostly it is a joke to most of the serious investors from the West. If you feel like you live in a nation of idiots, you are not alone. Unlike Kenyans, we Tanzanians just dont have a tradition to get up and speak for our rights or protest when things go wrong. We were more brought up in a sense that we were taught to obey. That is precisely the problem; our leaders know they can get away with anything. So Mr. Mkapa uses this to his advantage, and continues to deceive the poor, the uneducated peasants and peddlers. This requires all professionals and intellectuals to become more proactive, patriotic, and start to speak up, and participate fully in political process.
Does this government seriously think that all Tanzanians are too blind to see these muddles? Or it is just a measure and contempt for the intelligence of the public or maybe for the press somehow they think they can get away with anything?
Conclusion:
Our reforms so far have focused one-sided emphasis on economic dimension, while other dimensions are neglected. The reforms need to be understood as an overall civilization change and regeneration involving the cultivation of legal and moral order, the development of civil society, modernization of the economy, civil service and public administration. Not least a revitalization of the cultural and spiritual life of society, its vision hope and ideals.
In other words, the real reform involves a change of society than mere a change of system. It involves a change of hearts, minds, habits, and patterns of behaviour, for which government policies are the main catalyst. Without these other dimension the reforms are useless.
Mostly important, every society reserves the right to respect its President as required by the constitution, but just as well as a respect for the office. In a democratic state however, one must feel free to debate or criticize the president and his cabinet for all economic mishaps. President is a servant of people, not a saint that can do no wrong. The need for intellectual, scholars and others professionals to speak up is of critical importance to our nation.
The strength of democratic state rests on its citizens who gladly and willingly accept responsibility for themselves, their families, society and the state in which they live. The possibility to live in freedom and take part in public affairs is a great gift, but also a commitment. Politics is not only a struggle for power, but also service to people, it is an art and opportunity for brave, high principled, truthful and incorruptible people.
Nyerere as intelligent as he was did not seek to impress poor and deprived populations of Africa. He sought to liberate, educate and advocate for them through his ideas and conduct. Nor did he hide behind ignorance of his own people so that he could turn around and loot their resources for his own self-enrichment, like the way our current leaders are doing.
Nyerere was an excellent example and finest Tanzanian. If there is any lesson or ideal that Nyerere would have wanted all of us to learn is, greatness is not found in possessions, power, position, or prestige. It is discovered in goodness, humility, service, and character. Moreover, a great man is one who can have power and not abuse it. Those are the ideals we should always strive for and ask of our leaders in return.
