Lessons from China on reforms in industrialisation (2)

China’s great, Mao Zedong, (centre), and the Father of the nation, Mwalimu Julius nyerere, played a key role in enhancing relations between China and Tanzania in the mid 1960s. (File photo)


As a nation we need to change our policies on foreign investment in particular how to work with IFDI enterprises. One best approach is to develop joint venture with IFDI enterprises so the profit will remain in the country.

If we continue with current state we will remain poor and we will not industrialize. Tanzania has an opportunity to develop OFDI by using our geographical position by expanding our market network whereby we need to establish cloth industries in cotton producing region such as Shinyanga, Tabora, Mwanza, Geita and Mara.

In the current state where our cotton is being shipped to China, Tanzania economy will never develop. How do we start? First government need to find enterprises from FDI and form a joint venture to construct new cloth industries at least from four different investors.

For example, we invite companies from India, China, Vietnam, Pakistan, Singapore, Turkey where each country with guidance of government will built a cloth plant in each region with Tanzania Government first should own 51% and investors 41%.

Tanzania has an opportunity of population 281,475, 893 from nine (9) bordering countries. Cloth industry will have compounding impact in agricultural sector and will increase employment opportunities.

At the current state where government is emphasizing on industrialization we need to take radical decision on investing buy putting more effort on attracting foreign capital and technology revolutionaries agriculture in lake zone by establishing modern cloth industries.

Cloth industry is doable and we can do it. Other crops should also be considered. Opening up policy was a milestone for Chinese improvement of the heavy industry. Heavy industries are basic industries for producing machinery, parts and spare parts for other industries.

In the 1978 China had inadequate foreign exchange, technology and heavy industry. Investment in heavy industry is done by joint venture with government where government share should not be less than 55% and some important sector foreigners are not allowed to invest for example telecommunication.

Opening up policy also developed special economic technological zones (ETDZ) and High technological development zones. These zones focused on the technological products that needed in country market such as air conditioners, refrigerates, Motor circles, steel, automobiles, bicycles, etc.

Besides IFDIs with high tech industries, university research centers also started patenting and marketing their research findings. As District Commissioners, we learned in this training that the initiative of Tanzania to establish heavy industries did not succeed because of unsuccessful privatization and IFDI attraction.

University research did not contribute because of failure to patent and successful marketing of the patents. Therefore, the current Tanzania economic policy needs to change so as to support industrialization we are dreaming in the next two decades.

Before agricultural revolution China was heavily affected by famine. However, in 1970, Yuan Longping, the “Father of Hybrid Rice” discovered rice hybrid seed which revolutionized rice farming in China. Today, a Chinese rice farmer harvests 8.00-13.9 tons of rice per hectare. As Tanzanian leaders we need to reflect and learn how to improve rice farming in our districts to improve availability of rice as source of food and as business crops. For example, Local famers in Tanzania rice production capacity range from 1.8 -3 tons per hectare. (1. How can we get this hybrid seed and technology to improve our current local rice seeds to meet high quality production of rice? How do we support our research institutions such as universities to enhance their capacities in agricultural research?). Due to the long dream of capital accumulation and market expansion China is now reinventing the ancient Chinese Silk Road economic belt. The Silk Road is ancient trade route that includes traders in Asia, Europe and Horn of Africa. Today China is developing this route to expand its market for its fast growing economy and availability of primary raw materials for home industrial enterprises. China is building a railway line from Mombasa to Kampala as part of Silk Road project where raw materials will be transported to China from Rwanda Burudi and Uganda. Tanzania can learn from the Silk Road experience by reinventing/ establishment ancient “Caravan trade route economic Belt” that will connect our country with Atlantic Ocean through Democratic Republic of Congo. The caravan trade route forms tributaries to countries like Mozambique, Burundi, Uganda, Rwanda, Malawi, Zambia and D. R. Congo. More importantly, DRC and Tanzania has more potential to develop this route because are only two countries that can exclusively negotiate between two great water oceans-the Atlantic and Indian Ocean. Tanzania and DRC for benefit of our two nations with a market of 130 million people they can construct a railway line joining the two countries for expanding market and transport raw materials. Construction industry is the heart of economic development of any country. China during the opening-up policy strategically developed competitive construction industry whereby all construction companies were solely owned by Chines citizen and Government. China believes that construction should be owned by state or Chinese citizen because the profit will remain in China to build China’s economy. Construction is usually sponsored by taxpayers’ money, therefore allowing free policy in construction industry is supporting outflow of foreign exchange. The Chinese government, knowing the role construction sector in the economic reforms, established national construction bank to finance national Chinese construction companies to work in country and in abroad market and its braches support regional constructions. Tanzania is now building a lot of infrastructure in particular roads, railway, ports etc. but most of the big construction activities are done by foreign companies. As nation we need to establish few national construction companies that will jointly work foreign companies to acquire skills and later we will be slowly building our own capacities. The construction industries in Tanzania are the source of foreign capital flight. Farmers’ cooperatives in China were used as a strategy of developing the country side or rural areas. The cooperatives are used as centers for technology adoption and innovations. Thus, through cooperatives new technologies are easily distributed to farmers and help to reduce the barrier of technology adoption in rural areas. Cooperatives help to stabilize production and availability of market both local and international market. There is strong link between agricultural universities, agricultural researchers and farmers’ cooperatives on new agricultural technologies developed for trial and adoption. Farmers are given insurance and subsidy by the Government to motivate them to produce more. Thus, famers have more control on management of cooperatives and little government interference. Conversely, on other hand , Tanzania famers cooperatives are not strong and not centers of agricultural technology innovations, have inadequate budget for supporting famers, some are totally bankrupt instead are just buyers of famers’ agricultural produce. In Tanzania, most famer’s cooperatives are in intensive care units with the following missing when compared to China: • The cooperatives that are working do not involve in developing the inward local areas but they are just buyers of famers’ agricultural goods. * Cooperatives are rarely subsidized, but when bankrupt government pays some Banks debts. * In Tanzania we do not have insurance policy of our cooperatives and farmers. Due to weak Tanzania farmer’s cooperatives reforms, agriculture is still faced by many challenges and rural communities remain with abject poverty. As a nation we need to revive the famers’ cooperatives so we can easily support country rural development. For example, many fruits famers in Tanzania are not coordinated as results they are not able to sell their farm produce in a required price and some spoil in farms and roadsides waiting for buyers. In China, farmers have link and contracts with industries to process their farm produce to add value and some industries are owned by farmers. People’s Republic of China is communist state with one political party and unique democracy. During the training they echoed that any economic reforms should be supported by party decision making organs and its members in the grass root level. Chinese people believe that lack of support from ruling party will delay economic reforms. Given the current political state in Tanzania of multiparty democracy, there are a lot of critics on government economic reforms. It is the role of the ruling party organ from the secretariat to grass level to support the government reforms. Therefore, CCM should support the reform introduced by the government. Through lectures we learned that China economic open-up policy reforms started in 1978 after Xi Jingping came to power.

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