APPROACH TO THE INTERNATIONAL MONETARY FUND (IMF)

In June, talks began with the IMF on a three year extended fund facility of more than £250 million, but there is no report of progress. On the contrary, the IMF officials seem to have reverted to their previous hard line and are requiring a devaluation of at least 50%, increases in the prices of basic foods, the freezing of minimum wages and reductions in Government spending. These conditions have again been rejected by Ndugu Kighoma Malima, the Minister for Planning and Economic Affairs. The IMF’s tough stance may be linked with the openly critical attitude of the US Reagan administration. The Daily Mail of 23rd. July, 1981, carried an article very hostile to President Nyerere drawing on extracts published in the Wall Street Journal of a report on Tanzania by Ken Adelman, US Deputy Ambassador to the UN. If the Mail Article is correct, Adelman’s report repeats all the familiar criticisms of Tanzania, attributing all its problems to socialist policies and clearly arguing that Tanzania should not receive any further US (and by implication other Western government) assistance until it has a different leader and adopts a free market economy.

Tanzanians are well aware that there are serious shortcomings in many of their commercial and industrial organisations and to start to deal with these problems the Party has produced its policy on productivity, incomes and prices. To implement this policy Government Circular No.1 of 1981 has instructed that salary increases and bonuses should no longer be automatic, but should only be paid to those working in organisations, which surpass production targets and achieve lower costs. Guidelines on preparing targets and measuring productivity have been issued by the Permanent Labour Tribunal and the Government has presented a Bill to the National Assembly, which would establish a National Productivity Council to supervise the policy and advise on forms of motivation for workers.

John Arnold

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