Tuesday, June 12, 2012
Despite efforts, the pace of poverty alleviation moves slowly
TOWARDS the end of March this year, a Non-Governmental Organization dealing with Research on Poverty Alleviation in the country (REPOA) celebrated its 17thAnnual Research Workshop (ARW) which was held at White Sands Hotel in Dar es Salaam under the theme titled, “Socio-economic Transformation for Poverty Reduction. The growth experience in Tanzania in the last decade has shown that growth of the economy has been associated with too modest a reduction in poverty. Recent development experience in several developing countries has shown that it has been possible for several developing countries to transform their economies and reduce poverty levels substantially. The workshop sought to determine what lessons can be drawn from these experiences with a specific focus on socio-economic transformation for more rapid poverty reduction, addressing the roles of the state, private sector, and communities. The workshop was kicked off with a number of speeches, these included the opening remarks by REPOA’s Chair of the Board of Directors, Professor Esther Mwaikambo and that one of the President in which he had underscored the importance of poverty reduction in the Tanzanian Government’s agenda. He highlighted the efforts of his government in instituting and implementing policies and programmes aimed at stimulating growth and reducing poverty, more recently with the Tanzania Development Vision 2025, MKUKUTA and the Five Year Development Plan 2010-2015. The President went on to note that despite economic growth rates of 7 percent per year from 2000-2011, the rate of poverty reduction has remained low, and expressed the hope that the workshop would provide some answers as to why that is the case. He underscored the significance of transforming the agricultural sector with 80 percent of Tanzanians living in rural areas and depending on agriculture as high economic growth sectors such as telecommunications are not directly benefiting the majority of the people. He went on to state that socio-economic transformation should also address urban migration and unemployment, as well as employment in the informal sector, mining, tourism and all other key sectors such as manufacturing - an integral part of industrial transformation. Contributing his views during the meeting, the Executive Secretary of the Tanzania Planning Commission, Dr. Phillip Mpango noted that, the successful socio-economic transformation in Tanzania will vitally depend on squeezing the trigger for a radical productivity improvement in agriculture. He says one thing that Tanzania has seen and is borne out in the development literature is that high economic growth remains the single most important factor (though by no means the only one) for making poverty history. Also important is the quality of that growth, defined in terms of distributional patterns, sectoral composition and sustainability of growth over time that a given country experiences as it embarks on socio-economic transformation. According to him, the Success to transform the Tanzania economy will depend on industrialization strategies. Typically, experience from East Asia and Brazil indicate that home-grown, export oriented industrialization led by private entrepreneurs (local and foreign) open up broader opportunities for sustainable growth. In this context, it would seem most logical that Tanzania embarks on industrial development on the basis of specific industries and sectors where Tanzania has latent comparative advantage such as availability of raw materials. Other natural comparative advantages the country have are crops, livestock & fisheries, forestry resources, and minerals and promoting industry clustering through Special Economic Processing Zones (SEPZ) to produce electronic and electrical goods as well as other manufactured goods that are in high demand in the region. So, in addition to agro-processing, the main industries to be targeted should include power generation plants (tapping natural gas, water, coal, wind, solar energy, bio-mass etc), large fertilizer and cement factories, Iron, steel plants, integrated textile industries, sugar factories, meat and fish processing, and mining etc. While studies assert a few similar characteristics that cut across as factors that contributed to the country’s success, each country followed its own Vision/Strategy in pursuing its socio-economic transformation agenda. South Korea has been able to sustain rapid development for more than four decades. Giving an example of the core economic growth in South Korea he noted that was government-lead skills development strategy coordinated with rapid technological change and equitable income distribution. The most remarkable aspect of China’s transformation has been the role of the private sector in achieving unprecedented high rates of growth. This in turn was facilitated by changes in government economic policy that have progressively given greater reign to market forces. In 2011 the Planning Commission did some analysis in order to better understand what it would take for Tanzania to become a middle-income country by 2025. The study generated the GNI per capita (in constant 2009 US$) that would have to be achieved by 2025 in order to reach the lower middle-income country threshold (US$ 2,700). It turned out that for the threshold to be realized, an average annual GNI growth rate of 8 percent in the next 15 years will have to be sustained (equivalent to GNI per capita growth of about 5 percent given a population growth of around 3 percent.