SOCIALISM AND CAPITALISM – THE DEBATE CONTINUES

Why are so many people talking about this issue this year? I think there are four policy changes announced during recent months which have stimulated the discussion. The first was the severe cost cutting exercise which began in last year’s budget (Bulletin of Tanzanian Affairs No.19) and was directed particularly at the parastatal bodies; it encouraged comparison with private sector efficiency. The second was the announcement on trade liberalisation , which was accompanied by the opening of two foreign exchange shops. The third and perhaps the most significant was the returning to the private sector of certain nationalised sisal estates. The fourth was very recent. President Nyerere stated that:
people with money will be permitted to build houses for rent, but that restrictions would remain in force for party leaders as stipulated in the Acquisition of Buildings Act of 1971. He said the aim was to supplement Government efforts to provide houses for the people. He also said that the circumstances which led to the nationalisation and the law on buildings were no longer relevant.

The following summarises the debate which has since occurred both inside and outside Tanzania.
On the cost cutting exercise and the public and private sectors Mwalimu said , when addressing the diplomatic corps in Dar es Salaam, that: ‘many steps have been taken by Government, and by the people, to tackle the underlying domestic factors which contribute to the low level at which our economy is currently operating. In particular we are trying to improve our efficiency and productivity in Government and parastatal organisations as well as to increase the incentives to our agricultural producers. Some of the steps which we have felt to be necessary do represent temporary set-backs in our struggle to build socialism based on the equality – and equal rights – of all our people. Thus, for example, I do not need to expand upon the extremely tough budget which Government introduced in June. It was a strain upon our people and in the interests of the future- including the need even now to make some new investment – made still further reductions in the real resources allocated to basic education, health and public services for our people.’

Ndugu Amir Jamal, Minister of State in the Office of the President, giving a keynote address on ‘Resolving the Economic Crisis’ at Dar es Salaam University, went further in the matter of the parastatals in saying that: ‘the management and workers of public enterprises must make a sustained effort to rid themselves of what can only be termed ‘monopoly psychology’… It has and will continue to cost us dear unless we realise that socialist construction will lose its meaning if , in actual performance, it is seen to replace, rather inefficiently, monopoly capitalism… It will be necessary over the years to introduce competitive management of our economy through policies and programmes aimed at productivity … capital formation and eventual elimination of inflation. ‘

At his London press conference President Nyerere was asked whether recent changes in the parastatals meant that he was abandoning socialism. His answer was direct:
‘This is another wish… that people have that will not come true. We have a very large public sector. It is unlikely that all parts of it will be efficient… We have much more experience about better structures than we had at the beginning. We want them (the parastatals) to be more efficient and more socialist. Some would like us to abolish them and turn to private enterprise to solve our problems… Private enterprise does not work that much better. Most African countries are in trouble and most are non-socialist.

In his address at the Royal Commonwealth Society President Nyerere moved on to the subject of private foreign investment.
‘Another solution frequently urged upon African and Third World countries is the greater encouragement of private foreign investment. In practice, investors are rarely interested in long term investment and are very selective. They are – understandably in the light of the genuine difficulties that exist – reluctant to go to really poor countries because their aim is profit, not development. It has been estimated that less than 10% of the foreign direct investment in the Third World is to be found in countries with a per capita gross domestic product of 500 dollars or below. Nevertheless, we are told that the solution is to make the conditions more attractive to investors. There are many African countries which try . But however capitalist-oriented the African country, success is very limited. Even Europe apparently cannot make private investment more attractive than it is in the USA; it is therefore difficult to see how Africa could do so. Especially when at the same time African states are being told to cut expenditure and generally add to austerity among the population- thus adding to social and political instability .

On the other hand he pointed out in a recent interview in ‘New Africa’ that the tyre factory in Tanzania was a joint venture with an American company and that the agreement had been entered into after the Arusha declaration. When asked whether he did not consider this as going against socialist principles, he said that he believed in the saying ‘use the capitalist system if you want to develop socialism.

On the subject of trade liberalisation it is clear that party members have been expressing some concern. Addressing members of staff at the Party Zonal College in Zanzibar on the occasion of the 21st. anniversary celebration of the Zanzibar revolution, Ndugu Rashidi Kawawa, Secretary General of the Party, said that liberalisation of trade was not a compromise in the implementation of the country’s socialist policy. The Party was as committed as ever before to building socialism in the country. ‘The trade liberalisation process is a deliberate tactical move aimed at stemming off a negative political climate.’ He explained that when consumer goods were scarce people with or without money complained bitterly and the few available goods could only be obtained at astronomical black market prices.

More recently, speaking to District party leaders at Kivukoni CCM Ideological College, President Nyerere indicated that the decision might be reviewed and that the relaxation should have lasted only six months ‘to entice people who might have siphoned hard currency out of the country to plough it back.’ However, he said that ‘the Government had no immediate plans to review the liberalisation announced last year, but he warned against contravention of the procedures governing the concession. He said that those who wanted to import must abide by the list of items issued by the Government and those who wanted to import additional items should seek permission from the Government. Mwalimu told party leaders that some importers had brought in such petty items as lipsticks, which were not listed for importation. Under the concession, Tanzanians working abroad or those returning home can import any of the designated items without having to state how they obtained the money to customs officials at the entry points. The items are motor vehicle spares and accessories, industrial machinery and spare parts, tractors and spare parts, road haulage and passenger carrying vehicles, garments, piece goods, cooking oils, shoes and shoe polish, socks and stockings, toothpaste, tooth brushes and soap, building materials, electrical fittings, fishing and carpentry equipment.

It is the change of structure of the sisal industry which has received most prominence in Tanzania with headlines in the Daily News- “Badly run TSA (Tanzania Sisal Authority) Estates to Go” and ‘TSA to sell 12 Estates’ on May 5th. and 8th. 1985 respectively. The first article reads:

‘President Nyerere has directed that all sisal estates which are badly managed in Tanga Region should be handed over to private firms capable of managing them, or should be turned over to villages for crop farming.
Addressing Regional leaders at the end of his three day visit to Tanga Region yesterday, Mwalimu said it was a shame that sisal estates managed by the Tanzania Sisal Authority were turning into bush. Mwalimu told the leaders that sisal, which was the leading crop in the Region and in the past one of the country’s important export crops, today comes fourth as a foreign exchange earner after coffee, cotton and tea. He admitted that it was a mistake to nationalise sisal estates in 1967 without considering the management aspects as was done in the case of key industries and commerce.
The President directed that abandoned TSA sisal estates should be turned over to villages to use them to grow food and cash crops, adding that the Regional Authorities should also not ‘be ashamed to hand over badly managed estates to capable private firms, ‘We nationalised sisal estates, but now it appears we have failed to manage them. It is not a bad idea to hand them over to private firms with the ability to run them, he said.

Sisal production at nationalisation was put at about 220,000 tonnes per year, but for a number of reasons, including poor management, this declined to 202,000 tonnes in 1970 and 174,000 tonnes in 1974. By last year production stood at 47,000 tonnes and the Ministry of Agriculture and Livestock announced measures to raise sisal fibre output to 66,000 tonnes this year. All sisal farms were to be cleaned up while raising the number of sisal cutters , planting fresh sisal, rehabilitating vehicles and improving the welfare of sisal estate workers.’

Three days later, the Minister for Agriculture and Livestock Development, Professor John Machunda, gave directions on the matter and said that 12 estates had been earmarked for sale. He said the list of the 12 estates was drawn up in November last year, after which an advertisement for the sale of the farms totalling 30,006 hectares was put up by TSA. Professor Machunda told reporters that many prospective buyers for the estates had already responded, but declined to name them. ‘What is now awaited is an evaluation report on the estates before the Government decides on their sale, the Minister said, Of the 12 estates , only Kwashemshi and Mwele/Muhinduru estates in Tanga Region had been valued, Five were in Tanga Region and the rest were situated along the central railway line. A few days later the Guardian, quoting the Associated Press, added a remark by President Nyerere that ‘if I call back the British today to look at their former sisal estates, I am sure they will laugh at us because we ruined their estates.

In a short but tough interview on BBC television’s Newsnight programme during Mwalimu’s visit to Britain, Peter Snow asked: ‘Is there not some way in which the system, particularly the agricultural system, the communal socialism which you introduced in Tanzania… is it not that, in part ,that has caused the failure of your country to produce what it should be producing?’
The President replied :
‘What do you say to that ? African agriculture is backward in socialist and non-socialist countries alike . In my country we use the hand hoe. In capitalist countries in Africa they use the hand hoe. That defines the limits of what the peasant can do. The difference between a socialist country like Tanzania and a non socialist country is that the burdens of poverty are shared better in a socialist country than they are in a non-socialist country.’

Later he was asked why the IMF should not demand that Tanzania’s economy should be run more efficiently before they produce the kind of aid Mwalimu wanted, His reply was as follows:
‘I am trying to get our economic system to be as efficient as it can be. But efficiency in a system of exploitation is an immoral system, where the rich are feeding on the poor.
The President was asked at the Royal Commonwealth Society about the future . ‘Will your ideology be continued?’ He replied , ‘I wouldn’t be stepping down if I wasn’t sure that the policy will continue. Referring to his intention to continue as head of the Party after his retirement from the Presidency Mwalimuu stated in his television interview that in this capacity, in a one-party state, he did not expect to be ‘without influence.’

Certain Newspapers took the opportunity of President Nyerere’s visit to attack Tanzania’s socialist policies, the strongest attack of all being in the Spectator. The Sunday Times profiled the ‘Saint with a Tarnished Halo’. But the Guardian in a prominently featured article entitled ‘The Patient Vision of Julius Nyerere’ by Victoria Brittain was more sympathetic: Some of Tanzania’s most enthusiastic backers in the early attempts to ‘grope towards socialism’, as Nyerere put it two decades ago, have become discouraged at the lack of clear successes. Not Nyerere. ‘I was also more impatient 18 years ago. I set out to build a socialist and self-reliant Tanzania. You ask me, is Tanzania socialist and self-reliant? The answer is no. But I never expected it in 18 years, We were a backward, totally illiterate country. We have had tremendous successes. In 1966 there were 300,000 children in primary school for four years. Today all 3.5 million primary school children are getting seven years of schooling, We have virtually wiped out illiteracy. I remember our youth used to ask me at independence, when will we achieve our goals? Perhaps in 30 years, I used to answer.

The ‘economic disaster of the continent in the 1980’s’ may have set the distant goal back a bit, but it has strengthened Nyerere’s authority as the prophet who got it right and the weak who refused to give in to the strong.
David Brewin

1 Comment »

  1. Tanzanian Affairs » 36 YEARS OF TANZANIAN AFFAIRS – PART 1 said,

    September 3, 2011 at 10:48 am

    […] Nyerere’s visit to the UK is covered in Issue 21 (July 1985), where in a “short but tough” interviewon BBC Newsnight with Peter Snow he was asked: “Is there not some way in which the system, […]

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