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Socialist development in an underdeveloped country: The case of Tanzania
World Development,
Vol. 3, No. 4, April 1975, pp. 223-228.
Socialist Development in an Underdeveloped Country: The Case of Tanzania EDMUND
CLARK
Special Adviser, Economic Analysis Division, Department of Finance, Government of Canada, Ottowa
Summary. - The author attempts to draw on the experience of Tanzania in order to provide some comments on socialist investment strategies. Tanzania has been more successful in reorienting its programme of social investment than its investment programme for economic development. This failure stems from real differences within Tanzania, and among socialists generally, about appropriate socialist investment strategies for a country at Tanzania’s stage of development. It also reflects the fact that socialism in Tanzania is a change imposed from the top, and the bureaucracy remains relatively immune from the pressures of the people and the poverty in which they live.
This paper will try to draw together some of the lessons which can be learned from the Tanzanian attempt to build socialism. In particular it will offer a few suggestions on the implications of the Tanzanian experience for strategies of investment. While the most prominent of today’s socialist countries achieved socialism as a result of a revolution, an increasingly large number of countries claim to be building socialism through more peaceful, evolutionary methods. Tanzania represents a country which has been more sincere than most in its attempt to develop socialism, and has achieved more. The lessons of its experiences, both its failures and its successes, provide us with important insights into the process of development, and into the challenge involved in creating a truly socialist society. There is a priori, no such thing as a socialist strategy of investment. A socialist strategy of investment is that strategy which is most effective in encouraging the development of socialism. Because the historical and existing political and economic context in which the attempt to build socialism is undertaken differs radically from country to country, it is impossible to specify a generalized theory of socialist investment. This lack of an a priori socialist investment strategy does not mean that nothing can be said, in general terms, about socialist investment strategies, as opposed to investment strategies designed for capitalist countries. The
goals of the two strategies differ.1 The goal of a socialist investment strategy is the radical transformation not only of the economy, but of the society, in order to create a society where all members are truly equal, equal not only in terms of their consumption of material goods, but equal in terms of status and power. While there is not total agreement on the left on this issue, there is an increasing concensus that a socialist strategy of investment must be based upon an attempt to simultaneously achieve the goals of equality and growth, rather than to do so sequentially.2 A socialist investment strategy attempts to produce growth with equality. As a result of the fact that a socialist investment strategy is based upon an attempt to do more than create growth, such strategies must be based upon an understanding of the social and political context in which they are to operate. Moreover, the strategies must involve some specification of the resulting social and 1. For the difference between capitalist and socialist development see J. Gurley, ‘Capitalist and Maoist economic development’, Bulletin of Concerned Asian Scholars (April-July 1970). 2. The terms simultaneous and sequential develop ment come from Arthur MacEwen. See his ‘Incentives, equality and power in revolutionary Cuba’, Socialist Revolution, No. 20. See also Paul Sweezy, ‘Towards a program of studies of the transition to socialism’ Monthly Review (February 1972) for a description of the goals of socialism. 223
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political repercussions of the economic changes, for these repercussions are just as important as the economic ones. Finally a socialist investment strategy must be part of a larger political strategy, involving the use of many different policy tools. A ‘correct’ investment strategy will not, by itself, lead to socialism. Let me now turn to Tanzania and provide a quick summary of its experience. Like most Third World countries, Tanzania was a colony of a European power. It was a German colony up to World War I, and then a British protectorate under the League of Nations and then the United Nations. It became independent in 196 1 under the leadership of Julius Nyerere. As in many underdeveloped countries, the independence party was committed to building socialism. In fact this commitment initially meant very little. Only in 1967 did the government move decisively to put some content into this commitment. In February 1967 the ruling party issued a policy statement called the Arusha Declaration.3 This Declaration called for public ownership of the principal means of production. It established a leadership code for the top members of the party and the government which prohibited them from participating significantly in the private economy. In terms of economic development, the document stressed the need of the country to be self-reliant, meaning by this term that the country should avoid excessive dependence on external assistance to finance the development programme. The Declaration criticized the past pattern of development as being too geared to urban areas and industrialization. The major emphasis of the development programme should be on improving the lives of the rural dwellers, who constituted over 90 per cent of the population. In September of that same year, the party also published a paper entitled ‘Socialism and Rural Development’ which specified in more detail the type of development effort envisaged for the rural areas. The main focus of the rural development effort was to be directed towards co-operative farming. Ujamaa villages, as they were called, were to be established throughout the country. These villages were to be formed co-operatively and involve only a minimum of capital input by the government. By bringing the people together the Ujamaa villages were to facilitate extension work designed to alter the production methods used by the peasants. The Ujamaa village programme was an attempt to prevent the gradual development of a class structure in the rural area, a structure in which a kulak class would be dominant.
What was the effect of this shift in ideology on the pattern of public investment? In certain areas the effect was both immediate and quite strong. In others, change has come only slowly, and in a significant number of sectors little, if any, change has occurred. Let me specify in detail the type of changes which have, and have not, occurred. An analysis of the effect of the Arusha Declaration can be most easily made by comparing the figures on government spending for the First Five-year Plan (1964-9) and the Second Five-year Plan (1969-73). The most dramatic area of change has been in the provision of social services. In education and water, the emphasis on the rural sector was immediately increased. In health the change came much slower, but has finally occurred. In the First Five-year Plan only 9 per cent of the development budget for education was spent on primary schools or adult literary programmes.4 In the Second Five-year Plan the figure is 29 per cent. In the First Five-year plan 19 per cent of the water development budget went towards rural water programmes, other than large irrigation schemes. In the Second Five-year Plan the figure is 45 per cent. In the First Five-year Plan about 30 per cent of the health development budget was used for rural health centres and dispensaries. In 1973-4 the figure is expected to be 49 per cent. There have, as well, been some important changes in the economic sphere. The focus of agricultural development has shifted away from capital-intensive transformation projects to support for the ujamaa village programme. The rural development ministry now spends almost all its resources on providing funds for small scale projects. In contrast, in the First Five-year Plan its programme was dominated by attempts to develop a few settlement schemes heavily endowed with capital. The agriculture ministry is directing more and more of its programmes toward the establishment of ujamaa villages. Nevertheless, the change in the economic sphere has not been as dramatic as one might have thought it would be. The relative quanti3. Nyerere’s writings can be found in three books: Freedom and Unify (London: Oxford University Press, 1966); Freedom and Socialsim (London: Oxford Universify Press, 1968); and Ujumua: &says on Socialism (London: Oxford University Press, 1968). 4. All data quoted in the paper come from: W. E. Clark, ‘Socialist development and public investment in Tanzania 1964-73’, unpublished PhD dissertation, Harvard University, Cambridge, 1974.
SOCIALIST
DEVELOPMENT
IN AN UNDERDEVELOPED
tative emphasis on rural economic development has actually fallen. In the First Five-year Plan 22 per cent of government development spending was devoted to economic programmes for the rural areas. In the Second Five-year Plan the share drops to 18 per cent. Thus the Arusha Declaration did not alter the lack of emphasis on economic development of the rural areas. In its attempt to build socialism the government has increased its ownership of the means of production of the country. Public institutions now account for a significant share of the value added in the economy, but by no means all of it. Public ownership is concentrated in the most modern sectors of the economy. Thus public institutions account for 100 per cent of the value added in utilities and finance, about 70 per cent in mining, 55 per cent in transport and 40 per cent in manufacturing. Private institutions are overwhelmingly dominant in the other sectors: services, commerce, construction and agriculture. In all, public institutions account for 30 per cent of the value added in the economy, and 42 per cent of the value added in the monetary economy. The public sector is, however, the most dynamic sector in the economy, and its role will likely increase. Public investment was 69 per cent of total investment in 1972, and over 76 per cent of monetary investment. These figures include the railway currently being built by the Chinese to Zambia. If it is excluded, the public share of total investment would still be 58 per cent, and of monetary investment 66 per cent. Thus one can safely assume that the direction in which the economy develops, and the performance it achieves will be increasingly determined by public investment, and in particular investment by government-owned corporations. The parastatal sector, the name used for corporations owned by the government, is the area where there has been the greatest failure to develop policies consistent with the aims of the Arusha Declaration. The corporations taken over by the government operate much as they did before nationalization. More importantly, the new projects developed by the government differ little from those developed in neighbouring countries. The manufacturing firms established since the Arusha Declaration are more capital intensive, larger and more dependent upon imported raw materials than the firms established before the Arusha Declaration, or than private firms. The government has done almost nothing to establish small-scale rural industries, but instead has been attracted to large-scale projects which offer the hope, how-
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225
ever unreal, of ‘transforming’ the economy. Examples of such projects are the type of factory built and managed by General Tyre, a fertilizer plant built and managed by a West German firm, and a steel-rolling mill built and managed by an Italian firm. Not only has the government continued to concentrate on these sectors where large-scale, capital- and import-intensive firms dominate, but government-owned firms generally enter each sector in the capital-intensive and importintensive way. Parastatals generally develop projects by making ‘turn-key’ agreements with multinational firms from capitalist countries, and have made little effort to alter the structure of the project to suit the Tanzanian environment. In fact parastatals have a positive bias towards the most modern technology, technology which is inappropriate to Tanzania in view of its socialist goals, and its poverty. In other sectors the parastatals have acted no more innovatively. The government has developed a tourist parastatal which has built a number of very expensive, luxury hotels. Almost every one of these hotels loses money. Thus the government has devoted considerable resources to developing a sector whose only justification from a socialist perspective would be its surplus or foreign-exchange-generating capacity, but has done so in such a way that it loses money. In contrast, the private firms, by building more modest hotels, manage to be very successful commercially. The electricity parastatal, once a private firm, continues to act as if it is one, and as if Arusha never occurred. Its investment programme is one of the largest in the country absorbing about 10 per cent of the development budget. This programme is, however, centred around the development of large hydro schemes designed primarily to serve the needs of large industrial concerns built in the capital. No attempt at rural electrification has been made, and lschemes to provide electricity to smaller towns are postponed because the large schemes absorb all the available resources. What accounts for this pattern of investment, and what does it teach us about the process of socialist development? Any explanation of the lack of change in Tanzania must begin with a statement about the constraints on the investment strategy. There is, in Tanzania, a very great shortage of citizens, especially Africans, with the ability to develop and manage projects. This is the heritage of imperialism. As a result, the choice facing decisionmakers is often not one of establishing four small plants or one large one, but of establishing one small plant, or one large one. Given
226
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that the supply of capital is, in many cases, elastic for the range of choices which are being considered, the decision to opt for the large plant is often understandable. Alternative technologies are often difficult to obtain. Western firms offer quick, reliable delivery of capital goods. To buy from countries like China or India which do manufacture more labour-intensive technologies takes time, and involves a degree of uncertainty. Moreover, in the area of most crucial concern, rural development, the assistance which external agencies can offer is minimal. The challenge can be met only by mobilizing the people. This takes both time, and a large cadre of leaders. In contrast, signing agreements with multinational firms is an easy process. Tanzania does teach us much more than that change is difficult, however true that statement may be. We know from the experience of other and indeed from the important countries, changes which have occurred in certain areas in Tanzania, that change is possible. Why, then, has there not been as much change as one might have expected, given the Arusha Declaration? One could turn the question around, and ask why a switch to socialism occurred at all in Tanzania. A good explanation of why Tanzania has moved as far as it has has not been written. Let me summarize here some of the factors which seem to account for the change. Tanzania’s lack of resources, and less attractive climate, discouraged heavy foreign involvement in the economy. Settlers were fewer than in neighbouring Kenya, and European businesses established there were often only subsidiaries of Kenyan branches. The stake of Western imperialist forces, and especially of Britain, was therefore small. This relative lack of interest by Britain and its growing weariness of colonies meant that Britain gave Tanzania its independence almost without a struggle, and long before a strong political movement had developed in the colony. The type of economic development which occurred in the colonial period did not produce strong political forces in the African population. Africans were largely excluded from the urban middle class because of the presence of the large Asian community. The slow growth of the urban sector meant that there was only a very small urban working force. Thus thC African population committed to urban development, either as a middle class or a working class, was relatively small. Moreover, the use of migrant labour by the agricultural estates resulted in a rural work force which was not completely proletarianized, but remained inte-
grated into the rural subsistence economy. The small elite which gained power at independence did not face, as a result of these factors, strong interest groups which effectively constrained their actions. They had in their choice of actions a much greater degree of freedom than did the elites in other countries. What also clearly distinguishes Tanzania from other countries is the use of that freedom by the elite. For whatever reasons, and I do not want to delve into them here, the elite chose to push Tanzania along a path of development quite different from that followed by its neighbours, and a path which would deny the elite many of the benefits which can accompany such power. It is important to understand that Tanzanian socialism in its initial stages was not a mass movement. It was a programme. devised and implemented by the elite. It is only now that the elite has moved to encourage the commitment and involvement of the people in building socialism. An understanding of the historical context in which Tanzania became committed to socialism makes an understanding to the problems in implementing that commitment easier. What is clear in Tanzania is that the conversion to socialism occurred essentially at the top, indeed at the very top, and has not yet permeated the whole society. As a result there remain many anti-socialist forces in the society. The government bureaucracy itself and the bureaucracy of the government-owned corporations remain staffed by people whose values are still essentially capitalistic. Most retain a desire to maintain hierarchical structures. They are very Western-oriented and in personal terms see their careers as involving a movement up and out of the rural society. Their future, and the future of their country, are regarded by them as being centred on urban development and industrialization. The lack of a period of protracted struggle during which these values could be changed, and the lack of a strong party to exert constant pressure on the bureaucracy to shift its direction, means that the bureaucracies in Tanzania resemble those of most Third World countries. The situation is worsened by the gaps in policy enunciation which exist in Tanzania. Concrete interpretation of the Arusha Declaration has been undertaken more in terms of social policy than economic policy. Moreover, on the Left there is widespread agreement on the need to equalize the provision of government services. Thus the failure of Nyerere to explicitly state that the Arusha Declaration implied a shift to rural health programmes did
SOCIALIST
DEVELOPMENT
IN AN UNDERDEVELOPED
not prevent the eventual shift in policy. No one could seriously dispute that a socialist society was committed to equalizing access to health facilities. On the other hand, in the economic sphere there is no universal agreement among socialists as to the correct strategy for development. In fact the Arusha Declaration, by its emphasis on rural development versus urban development, and agriculture versus industry, represents an approach out of the mainstream of most socialist literature with its emphasis on the development of an integrated industrial economy. The need to be explicit was, therefore, even more pressing in Tanzania. Yet the opposite has been true. No clear specification of an economic strategy exists, and as a result, policy has been heavily determined by the interests of the dominant political groups. I have, in this paper, assumed that the Tanzanian goal-socialism-is desirable, and more particularly that their over-all strategy, based as it is on emphasizing rural development, is the most effective way of building socialism. While it is impossible to comment in a paper of this size on the wisdom of the commitment to socialism, mention should be made of the fact that there are a number of socialists who would regard the Tanzanian strategy as incorrect.5 Essentially they argue that socialism can only be built by developing an indigenous capacity in intermediate and capital goods, thereby achieving technological independence, and escaping from an excessive dependence on international capitalism. It seems to be that this investment strategy, what one might call the traditional socialist strategy, is inappropriate to Tanzania at this stage in its development. The strategy is questionable on both economic and political grounds. Economically it has all the faults of Big Push strategies-they depend upon resources the country does not have (savings, foreign exchange, and skilled manpower). As well it ignores the problems of lack of demand, Even a relatively advanced country, such as Cuba, had to abandon its original heavy emphasis on industrialization. Tanzania would face even worse economic problems if such a strategy were adopted. Moreover, a strategy emphasizing the rapid development of intermediate and capital goods would have adverse political repercussions. At present the political balance of power, between the urban Elite and the urban work force on the one hand and the rural sector on the other, is a very delicate one. It is probably only the President who stands in the way of that balance
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being tipped decisively in favour of the urban areas, as it has been in almost all underdeveloped countries. A programme of rapid industrialization, by creating a powerful urban work force, and increasing urban/rural differences, would alter that balance. Nyerere’s basic strategy is correct for Tanzania at this stage. Only after the economic and political position of the rural areas is strengthened can the country begin a programme of developing an integrated industrial economy. In the meantime there is much to be done to improve the implementation of the current strategy. In particular, increased emphasis nee:ds to be paid to developing institutions whi’ch are more oriented towards rural development. At present investment is largely carried out by large centralized bureaucracies located in the capital. This type of organization protects the top executives from their environment. As a result they never have to come face to face with the reality of Tanzania’s poverty. Moreover the whole nature of the organizations, imitations of multinational firms or the British civil service, engenders in its members values inimical to the development of socialism. The decentralization of the government which began in 1972 must be expanded to include parastatals. Only in this way will the resources of the country be devoted to building sawmills or fishing boats rather than tyre factories or oil refineries. In many ways this paper is critical of what has happened in Tanzania. This criticism should not be misinterpreted. Tanzania provides a stark contrast to the type of uneven development typical of most Third World countries. While it is true that its Clite has not fully committed itself to the task of building socialism, that Clite has given up many of the normal fruits of power. Moreover significant progress has been made in many areas towards the development of socialism. What I have tried to show here, however, is the great difficulty of building socialism. A rhetorical commitment will not suffice, nor will public ownership of the principal means of production. The danger
5. For critics of the strategy see: J. F. Rweyemamu, Underdevelopment
(Nairobi: (ed.),
The
Oxford
and Industrialization
in Tanzania,
University Press, 1973); G. Shivji
Class Struggle (Dar es &Jam: House, 1973); or J. S. Saul, ‘Socialism, one country: Tanzania’, in G. Arrighi and J. S. Saul, Essays on the Political Economy of Africa (New York: Monthly Review Press, 1973).
Tanzania
Silent
Publishing
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which confronts Tanzania is not a return to private enterprise capitalism, but the development of bureaucratic socialism. While the latter may represent a step forward, it is hardly accep-
table as a goal. It is necessary, at this stage, for Tanzania to choose an investment strategy which will strengthen the forces of equality and democracy, not weaken them.
Vol. 3, No. 4, April 1975, pp. 223-228.
Socialist Development in an Underdeveloped Country: The Case of Tanzania EDMUND
CLARK
Special Adviser, Economic Analysis Division, Department of Finance, Government of Canada, Ottowa
Summary. - The author attempts to draw on the experience of Tanzania in order to provide some comments on socialist investment strategies. Tanzania has been more successful in reorienting its programme of social investment than its investment programme for economic development. This failure stems from real differences within Tanzania, and among socialists generally, about appropriate socialist investment strategies for a country at Tanzania’s stage of development. It also reflects the fact that socialism in Tanzania is a change imposed from the top, and the bureaucracy remains relatively immune from the pressures of the people and the poverty in which they live.
This paper will try to draw together some of the lessons which can be learned from the Tanzanian attempt to build socialism. In particular it will offer a few suggestions on the implications of the Tanzanian experience for strategies of investment. While the most prominent of today’s socialist countries achieved socialism as a result of a revolution, an increasingly large number of countries claim to be building socialism through more peaceful, evolutionary methods. Tanzania represents a country which has been more sincere than most in its attempt to develop socialism, and has achieved more. The lessons of its experiences, both its failures and its successes, provide us with important insights into the process of development, and into the challenge involved in creating a truly socialist society. There is a priori, no such thing as a socialist strategy of investment. A socialist strategy of investment is that strategy which is most effective in encouraging the development of socialism. Because the historical and existing political and economic context in which the attempt to build socialism is undertaken differs radically from country to country, it is impossible to specify a generalized theory of socialist investment. This lack of an a priori socialist investment strategy does not mean that nothing can be said, in general terms, about socialist investment strategies, as opposed to investment strategies designed for capitalist countries. The
goals of the two strategies differ.1 The goal of a socialist investment strategy is the radical transformation not only of the economy, but of the society, in order to create a society where all members are truly equal, equal not only in terms of their consumption of material goods, but equal in terms of status and power. While there is not total agreement on the left on this issue, there is an increasing concensus that a socialist strategy of investment must be based upon an attempt to simultaneously achieve the goals of equality and growth, rather than to do so sequentially.2 A socialist investment strategy attempts to produce growth with equality. As a result of the fact that a socialist investment strategy is based upon an attempt to do more than create growth, such strategies must be based upon an understanding of the social and political context in which they are to operate. Moreover, the strategies must involve some specification of the resulting social and 1. For the difference between capitalist and socialist development see J. Gurley, ‘Capitalist and Maoist economic development’, Bulletin of Concerned Asian Scholars (April-July 1970). 2. The terms simultaneous and sequential develop ment come from Arthur MacEwen. See his ‘Incentives, equality and power in revolutionary Cuba’, Socialist Revolution, No. 20. See also Paul Sweezy, ‘Towards a program of studies of the transition to socialism’ Monthly Review (February 1972) for a description of the goals of socialism. 223
224
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political repercussions of the economic changes, for these repercussions are just as important as the economic ones. Finally a socialist investment strategy must be part of a larger political strategy, involving the use of many different policy tools. A ‘correct’ investment strategy will not, by itself, lead to socialism. Let me now turn to Tanzania and provide a quick summary of its experience. Like most Third World countries, Tanzania was a colony of a European power. It was a German colony up to World War I, and then a British protectorate under the League of Nations and then the United Nations. It became independent in 196 1 under the leadership of Julius Nyerere. As in many underdeveloped countries, the independence party was committed to building socialism. In fact this commitment initially meant very little. Only in 1967 did the government move decisively to put some content into this commitment. In February 1967 the ruling party issued a policy statement called the Arusha Declaration.3 This Declaration called for public ownership of the principal means of production. It established a leadership code for the top members of the party and the government which prohibited them from participating significantly in the private economy. In terms of economic development, the document stressed the need of the country to be self-reliant, meaning by this term that the country should avoid excessive dependence on external assistance to finance the development programme. The Declaration criticized the past pattern of development as being too geared to urban areas and industrialization. The major emphasis of the development programme should be on improving the lives of the rural dwellers, who constituted over 90 per cent of the population. In September of that same year, the party also published a paper entitled ‘Socialism and Rural Development’ which specified in more detail the type of development effort envisaged for the rural areas. The main focus of the rural development effort was to be directed towards co-operative farming. Ujamaa villages, as they were called, were to be established throughout the country. These villages were to be formed co-operatively and involve only a minimum of capital input by the government. By bringing the people together the Ujamaa villages were to facilitate extension work designed to alter the production methods used by the peasants. The Ujamaa village programme was an attempt to prevent the gradual development of a class structure in the rural area, a structure in which a kulak class would be dominant.
What was the effect of this shift in ideology on the pattern of public investment? In certain areas the effect was both immediate and quite strong. In others, change has come only slowly, and in a significant number of sectors little, if any, change has occurred. Let me specify in detail the type of changes which have, and have not, occurred. An analysis of the effect of the Arusha Declaration can be most easily made by comparing the figures on government spending for the First Five-year Plan (1964-9) and the Second Five-year Plan (1969-73). The most dramatic area of change has been in the provision of social services. In education and water, the emphasis on the rural sector was immediately increased. In health the change came much slower, but has finally occurred. In the First Five-year Plan only 9 per cent of the development budget for education was spent on primary schools or adult literary programmes.4 In the Second Five-year Plan the figure is 29 per cent. In the First Five-year plan 19 per cent of the water development budget went towards rural water programmes, other than large irrigation schemes. In the Second Five-year Plan the figure is 45 per cent. In the First Five-year Plan about 30 per cent of the health development budget was used for rural health centres and dispensaries. In 1973-4 the figure is expected to be 49 per cent. There have, as well, been some important changes in the economic sphere. The focus of agricultural development has shifted away from capital-intensive transformation projects to support for the ujamaa village programme. The rural development ministry now spends almost all its resources on providing funds for small scale projects. In contrast, in the First Five-year Plan its programme was dominated by attempts to develop a few settlement schemes heavily endowed with capital. The agriculture ministry is directing more and more of its programmes toward the establishment of ujamaa villages. Nevertheless, the change in the economic sphere has not been as dramatic as one might have thought it would be. The relative quanti3. Nyerere’s writings can be found in three books: Freedom and Unify (London: Oxford University Press, 1966); Freedom and Socialsim (London: Oxford Universify Press, 1968); and Ujumua: &says on Socialism (London: Oxford University Press, 1968). 4. All data quoted in the paper come from: W. E. Clark, ‘Socialist development and public investment in Tanzania 1964-73’, unpublished PhD dissertation, Harvard University, Cambridge, 1974.
SOCIALIST
DEVELOPMENT
IN AN UNDERDEVELOPED
tative emphasis on rural economic development has actually fallen. In the First Five-year Plan 22 per cent of government development spending was devoted to economic programmes for the rural areas. In the Second Five-year Plan the share drops to 18 per cent. Thus the Arusha Declaration did not alter the lack of emphasis on economic development of the rural areas. In its attempt to build socialism the government has increased its ownership of the means of production of the country. Public institutions now account for a significant share of the value added in the economy, but by no means all of it. Public ownership is concentrated in the most modern sectors of the economy. Thus public institutions account for 100 per cent of the value added in utilities and finance, about 70 per cent in mining, 55 per cent in transport and 40 per cent in manufacturing. Private institutions are overwhelmingly dominant in the other sectors: services, commerce, construction and agriculture. In all, public institutions account for 30 per cent of the value added in the economy, and 42 per cent of the value added in the monetary economy. The public sector is, however, the most dynamic sector in the economy, and its role will likely increase. Public investment was 69 per cent of total investment in 1972, and over 76 per cent of monetary investment. These figures include the railway currently being built by the Chinese to Zambia. If it is excluded, the public share of total investment would still be 58 per cent, and of monetary investment 66 per cent. Thus one can safely assume that the direction in which the economy develops, and the performance it achieves will be increasingly determined by public investment, and in particular investment by government-owned corporations. The parastatal sector, the name used for corporations owned by the government, is the area where there has been the greatest failure to develop policies consistent with the aims of the Arusha Declaration. The corporations taken over by the government operate much as they did before nationalization. More importantly, the new projects developed by the government differ little from those developed in neighbouring countries. The manufacturing firms established since the Arusha Declaration are more capital intensive, larger and more dependent upon imported raw materials than the firms established before the Arusha Declaration, or than private firms. The government has done almost nothing to establish small-scale rural industries, but instead has been attracted to large-scale projects which offer the hope, how-
COUNTRY:
TANZANIA
225
ever unreal, of ‘transforming’ the economy. Examples of such projects are the type of factory built and managed by General Tyre, a fertilizer plant built and managed by a West German firm, and a steel-rolling mill built and managed by an Italian firm. Not only has the government continued to concentrate on these sectors where large-scale, capital- and import-intensive firms dominate, but government-owned firms generally enter each sector in the capital-intensive and importintensive way. Parastatals generally develop projects by making ‘turn-key’ agreements with multinational firms from capitalist countries, and have made little effort to alter the structure of the project to suit the Tanzanian environment. In fact parastatals have a positive bias towards the most modern technology, technology which is inappropriate to Tanzania in view of its socialist goals, and its poverty. In other sectors the parastatals have acted no more innovatively. The government has developed a tourist parastatal which has built a number of very expensive, luxury hotels. Almost every one of these hotels loses money. Thus the government has devoted considerable resources to developing a sector whose only justification from a socialist perspective would be its surplus or foreign-exchange-generating capacity, but has done so in such a way that it loses money. In contrast, the private firms, by building more modest hotels, manage to be very successful commercially. The electricity parastatal, once a private firm, continues to act as if it is one, and as if Arusha never occurred. Its investment programme is one of the largest in the country absorbing about 10 per cent of the development budget. This programme is, however, centred around the development of large hydro schemes designed primarily to serve the needs of large industrial concerns built in the capital. No attempt at rural electrification has been made, and lschemes to provide electricity to smaller towns are postponed because the large schemes absorb all the available resources. What accounts for this pattern of investment, and what does it teach us about the process of socialist development? Any explanation of the lack of change in Tanzania must begin with a statement about the constraints on the investment strategy. There is, in Tanzania, a very great shortage of citizens, especially Africans, with the ability to develop and manage projects. This is the heritage of imperialism. As a result, the choice facing decisionmakers is often not one of establishing four small plants or one large one, but of establishing one small plant, or one large one. Given
226
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that the supply of capital is, in many cases, elastic for the range of choices which are being considered, the decision to opt for the large plant is often understandable. Alternative technologies are often difficult to obtain. Western firms offer quick, reliable delivery of capital goods. To buy from countries like China or India which do manufacture more labour-intensive technologies takes time, and involves a degree of uncertainty. Moreover, in the area of most crucial concern, rural development, the assistance which external agencies can offer is minimal. The challenge can be met only by mobilizing the people. This takes both time, and a large cadre of leaders. In contrast, signing agreements with multinational firms is an easy process. Tanzania does teach us much more than that change is difficult, however true that statement may be. We know from the experience of other and indeed from the important countries, changes which have occurred in certain areas in Tanzania, that change is possible. Why, then, has there not been as much change as one might have expected, given the Arusha Declaration? One could turn the question around, and ask why a switch to socialism occurred at all in Tanzania. A good explanation of why Tanzania has moved as far as it has has not been written. Let me summarize here some of the factors which seem to account for the change. Tanzania’s lack of resources, and less attractive climate, discouraged heavy foreign involvement in the economy. Settlers were fewer than in neighbouring Kenya, and European businesses established there were often only subsidiaries of Kenyan branches. The stake of Western imperialist forces, and especially of Britain, was therefore small. This relative lack of interest by Britain and its growing weariness of colonies meant that Britain gave Tanzania its independence almost without a struggle, and long before a strong political movement had developed in the colony. The type of economic development which occurred in the colonial period did not produce strong political forces in the African population. Africans were largely excluded from the urban middle class because of the presence of the large Asian community. The slow growth of the urban sector meant that there was only a very small urban working force. Thus thC African population committed to urban development, either as a middle class or a working class, was relatively small. Moreover, the use of migrant labour by the agricultural estates resulted in a rural work force which was not completely proletarianized, but remained inte-
grated into the rural subsistence economy. The small elite which gained power at independence did not face, as a result of these factors, strong interest groups which effectively constrained their actions. They had in their choice of actions a much greater degree of freedom than did the elites in other countries. What also clearly distinguishes Tanzania from other countries is the use of that freedom by the elite. For whatever reasons, and I do not want to delve into them here, the elite chose to push Tanzania along a path of development quite different from that followed by its neighbours, and a path which would deny the elite many of the benefits which can accompany such power. It is important to understand that Tanzanian socialism in its initial stages was not a mass movement. It was a programme. devised and implemented by the elite. It is only now that the elite has moved to encourage the commitment and involvement of the people in building socialism. An understanding of the historical context in which Tanzania became committed to socialism makes an understanding to the problems in implementing that commitment easier. What is clear in Tanzania is that the conversion to socialism occurred essentially at the top, indeed at the very top, and has not yet permeated the whole society. As a result there remain many anti-socialist forces in the society. The government bureaucracy itself and the bureaucracy of the government-owned corporations remain staffed by people whose values are still essentially capitalistic. Most retain a desire to maintain hierarchical structures. They are very Western-oriented and in personal terms see their careers as involving a movement up and out of the rural society. Their future, and the future of their country, are regarded by them as being centred on urban development and industrialization. The lack of a period of protracted struggle during which these values could be changed, and the lack of a strong party to exert constant pressure on the bureaucracy to shift its direction, means that the bureaucracies in Tanzania resemble those of most Third World countries. The situation is worsened by the gaps in policy enunciation which exist in Tanzania. Concrete interpretation of the Arusha Declaration has been undertaken more in terms of social policy than economic policy. Moreover, on the Left there is widespread agreement on the need to equalize the provision of government services. Thus the failure of Nyerere to explicitly state that the Arusha Declaration implied a shift to rural health programmes did
SOCIALIST
DEVELOPMENT
IN AN UNDERDEVELOPED
not prevent the eventual shift in policy. No one could seriously dispute that a socialist society was committed to equalizing access to health facilities. On the other hand, in the economic sphere there is no universal agreement among socialists as to the correct strategy for development. In fact the Arusha Declaration, by its emphasis on rural development versus urban development, and agriculture versus industry, represents an approach out of the mainstream of most socialist literature with its emphasis on the development of an integrated industrial economy. The need to be explicit was, therefore, even more pressing in Tanzania. Yet the opposite has been true. No clear specification of an economic strategy exists, and as a result, policy has been heavily determined by the interests of the dominant political groups. I have, in this paper, assumed that the Tanzanian goal-socialism-is desirable, and more particularly that their over-all strategy, based as it is on emphasizing rural development, is the most effective way of building socialism. While it is impossible to comment in a paper of this size on the wisdom of the commitment to socialism, mention should be made of the fact that there are a number of socialists who would regard the Tanzanian strategy as incorrect.5 Essentially they argue that socialism can only be built by developing an indigenous capacity in intermediate and capital goods, thereby achieving technological independence, and escaping from an excessive dependence on international capitalism. It seems to be that this investment strategy, what one might call the traditional socialist strategy, is inappropriate to Tanzania at this stage in its development. The strategy is questionable on both economic and political grounds. Economically it has all the faults of Big Push strategies-they depend upon resources the country does not have (savings, foreign exchange, and skilled manpower). As well it ignores the problems of lack of demand, Even a relatively advanced country, such as Cuba, had to abandon its original heavy emphasis on industrialization. Tanzania would face even worse economic problems if such a strategy were adopted. Moreover, a strategy emphasizing the rapid development of intermediate and capital goods would have adverse political repercussions. At present the political balance of power, between the urban Elite and the urban work force on the one hand and the rural sector on the other, is a very delicate one. It is probably only the President who stands in the way of that balance
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being tipped decisively in favour of the urban areas, as it has been in almost all underdeveloped countries. A programme of rapid industrialization, by creating a powerful urban work force, and increasing urban/rural differences, would alter that balance. Nyerere’s basic strategy is correct for Tanzania at this stage. Only after the economic and political position of the rural areas is strengthened can the country begin a programme of developing an integrated industrial economy. In the meantime there is much to be done to improve the implementation of the current strategy. In particular, increased emphasis nee:ds to be paid to developing institutions whi’ch are more oriented towards rural development. At present investment is largely carried out by large centralized bureaucracies located in the capital. This type of organization protects the top executives from their environment. As a result they never have to come face to face with the reality of Tanzania’s poverty. Moreover the whole nature of the organizations, imitations of multinational firms or the British civil service, engenders in its members values inimical to the development of socialism. The decentralization of the government which began in 1972 must be expanded to include parastatals. Only in this way will the resources of the country be devoted to building sawmills or fishing boats rather than tyre factories or oil refineries. In many ways this paper is critical of what has happened in Tanzania. This criticism should not be misinterpreted. Tanzania provides a stark contrast to the type of uneven development typical of most Third World countries. While it is true that its Clite has not fully committed itself to the task of building socialism, that Clite has given up many of the normal fruits of power. Moreover significant progress has been made in many areas towards the development of socialism. What I have tried to show here, however, is the great difficulty of building socialism. A rhetorical commitment will not suffice, nor will public ownership of the principal means of production. The danger
5. For critics of the strategy see: J. F. Rweyemamu, Underdevelopment
(Nairobi: (ed.),
The
Oxford
and Industrialization
in Tanzania,
University Press, 1973); G. Shivji
Class Struggle (Dar es &Jam: House, 1973); or J. S. Saul, ‘Socialism, one country: Tanzania’, in G. Arrighi and J. S. Saul, Essays on the Political Economy of Africa (New York: Monthly Review Press, 1973).
Tanzania
Silent
Publishing
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which confronts Tanzania is not a return to private enterprise capitalism, but the development of bureaucratic socialism. While the latter may represent a step forward, it is hardly accep-
table as a goal. It is necessary, at this stage, for Tanzania to choose an investment strategy which will strengthen the forces of equality and democracy, not weaken them.