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Exploring new frontiers for economic diplomacy strategy

In order to build our economy steadily and sustainably, we need investment, re-investment, trade (export markets), value addition, productivity, tourism etc.; not aid.

Aid creates dependency. After all, being voluntary and given at the discretion of the donor, aid is inherently unpredictable and scarce.

Sharp declines in official development assistance (ODA) witnessed lately illustrate this point. This trend may continue, perhaps even signaling a permanent flattening of the ODA.

Aid is also conditionalityprone, sometimes compromising the receiver’s sovereignty. Worse, the traditional donorrecipient relationship has, regrettably, failed to salvage any beneficiary country.

Our Government has prioritized economic diplomacy as an alternative development tool to spur prosperity in-house through trade, investments, tourism, technology adaptation, joint ventures, twinning arrangements, south-south cooperation modalities and other partnering schemes.

Our diplomatic missions abroad and our representation at several regional and international organizations are intensely promoting this “revitalized” strategic initiative, overseen by the Ministry of Foreign Affairs & East African Cooperation.

The objective is to harness all available development and business opportunities to strengthen our economy. But where in the world should we focus on? The “East” (Asia) offers the greatest potential due to growing numbers of “high-value” economies.

The Financial Times of March 2019 titled “The Asian century is set to begin” postulates that the continent will become the new growth engine of the world late next year (2020).

Then, Asia will have about half of the world’s middle class, whose purchasing and consumption pattern will drive Asia’s economic activity to unparalleled levels.

The economic data tallied by the Financial Times also indicate that Asian economies will be larger than the rest of the world combined for the first time since the 19th century.

Nine emerging Asian stars are Indonesia, Thailand, the Philippines, Bangladesh, Vietnam, Singapore (already developed, but re-defining itself still), Kazakhstan, Myanmar and Sri Lanka. Traditionally, we have had fruitful cooperation with the now economic superpowers of China and India. This cooperation peaked during Mwalimu Julius Nyerere’s reign, but lessened thereafter.

Recall that the 1864-kilometre Tanzania-Zambia Railway, built by China between 1970 and 1975, was the largest single foreign undertaking by China at the time.

Similarly, our Small Industries’ Development Organization (SIDO), established in 1973, was funded and nurtured by its namesake (SIDO) of India.

This non-neocolonial, solidarity- based cooperation model with India and China may now be embedded in our new economic diplomacy with the nine emerging stars, so as to foster greater financial and economic ties.

The argument of budgetary limitations is valid, but it will be worthy “an investment” subsequently. Our tendency to putting “viability” upfront may deny us life-changing opportunities.

Whoever imagined in 1975 that China would be a world economic superpower today? Perhaps only the “craziest”! How naïve we all were!

The recent “Fortune 500” global list of top companies shows that for the first time, China has the largest number of companies (129) compared to the USA (121).

What a meteoric upswing, considering that China had only 8 companies in the Fortune 500 only 20 years ago. Other statistical indicators exhibit similar trends.

Asia is coming up faster and stronger! The nine countries have niches that meet our strategic intents and development needs.

Renowned for disaster preparedness; fisheries and aqua-farming; apparel; aeronautics engineering; power and mining; technical & vocational education and agro-processing (cashew, coconuts, cotton, coffee, cloves, sisal etc.); Indonesia is the “China” of tomorrow.

We can’t let it slip through our fingers. Thailand’s tourism and hospitality industry are advanced and integrated.

Thailand receives about 20 million tourists a year, with a record number of 32 million in 2017. Receipts from tourism in 2018 reached over USD 50 billion.

Thailand is also Asia’s new automotive and apparel manufacturing hub. The Philippines rank high in the number of skilled workforce worldwide, especially skilled nurses, medical professionals and hospital administrators; as well as managers and information technology (IT) staff and engineers.

This able workforce stems from the country’s excellent educational system; adapted to global standards to enable its nationals compete internationally.

Disaster-prone Bangladesh has hard-working masses as its greatest asset. In spite of the frequent natural disasters, Bangladesh weathers these storms well.

Though small in size than Tanzania (one-seventh in area) but having a large population (three times ours), Bangladesh feeds itself and exports surplus food.

It’s the fourth largest world producer of rice, mangoes and inland fisheries, second in jute production and fifth largest in vegetables. No centimeter of land is left unutilized.

Go and see! Its young and energetic population is digitally savvy and connected. There are 600,000 IT freelancers, said to be the largest freelancing community in the world.

Bangladesh is best known for its workable, affordable and impactful micro-finance schemes for women.

It is also famed for converting petrol/diesel/ octane driven vehicles into CNG (compressed natural gas), which many vehicles and three wheelers in Bangladesh now use.

As a country, we would relish having such a “green” programme; potentially benefitting from Bangladesh’s tested and adapted technology.

The previously war-torn Vietnam typifies our neighbouring Rwanda. Today, Vietnam is an economic success story; manufacturing agroproducts, garments, footwear and electronics.

Mobile phones are its topmost export, generating about USD 40 billion a year. Second only to Brazil in coffee production, Vietnam produces more coffee than the East African Community member states combined.

Its national airline, with about 100 aircraft, aspires to be among the leading airlines in Asia. Singapore offers no comparison to the rest.

It’s a global benchmark in almost everything, scoring number 1 or 2 in virtually every socio-economic parameter.

Bare in size and natural resources, Singapore’s “no-nonsense” leadership transformed the city-state from a third world to a first-rate outfit in 25 years, turning it into a financial, manufacturing, shipping and educational hub. Singapore’s development experience is a delight to academics and practitioners alike.

Kazakhstan, as the most developed country in central Asia, is a hub between Asia and Europe. Its economy is driven by oil and gas, mining-metallurgy, agricultural machinery and grains. It’s endowed with a literate and skilled labour force, legacy of the Communist system.

Kazakhstan harbours the Russian Soyuz Space Station. Dodoma City residents would envy Kazakhstan’s newly built, glittering and futuristic capital, Nur-Sultan, formerly Astana (well, except for the severe cold!).

Myanmar (Burma) offers the benefits of similarities, harbouring many commonalities with Tanzania in terms of urban-rural population divide, large informal sector, young population, large natural resource base, predominance of agriculture and a new capital city.

However, it is manufacturing that steers Myanmar’s economy. And lastly, Sri Lanka caters as a maritime logistics centre, given its geographical position.

Its other niches are tourism, agricultural value addition and jewelry & gems. There are eight other countries in Asia that we need to sustain and deepen our economic diplomacy with them too!

These moderate-growth economies are Malaysia (ICT, automotive industry and petroleum engineering); Iran (pharmaceuticals, nanotechnology); Turkey (textiles, furniture, transportation/ construction equipment, railways and autos); Pakistan (railways, science & technology); UAE (business ethics, seaport operations, innovation); Qatar (gas, aviation); Saudi Arabia (petroleum engineering, general logistics) and Russia (machinery/equipment, gas/oil, nuclear energy, education).

Combined, these 17 countries constitute the economic powerhouses of tomorrow’s Asia (besides China, India and industrialized Japan and S. Korea).

They offer ample prospects for Tanzania and local entrepreneurs. They provide new investment frontiers, benchmarks on best practices and partnerships for joint ventures.

They are potential markets with which to increase and diversify our exports. They are a source of innovation and experience sharing.

Bangladesh, Indonesia, Iran and Pakistan for example, both have a high disaster preparedness and management capability, from which we can learn and grow our own.

In summary, our economic diplomacy towards the “East” would re-energize the traditional south-south cooperation, strengthen solidarity and bilateralism, consolidate mutuality, leverage/mobilize extra resources for private and public sector financing, promote technological transfer, exchange more appropriate solutions to our developmental problems etc.

With all these, time is ripe for placement of (Development) Economists in our foreign missions and at home.

*Abdallah Kiliaki is an Economist (retiree), with experience in international development. Contact: akiliaki52@gmail. com or amkiliaki1952@hotmail. com

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Author: ABDALLAH KILIAKI

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