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Briley Holbrook

UHON 3550

Capitalism and Socialism

25 October 2018

Traps- The Tanzanian Downfall

The United Republic of Tanzania is a developing nation that is rich in natural resources

and has a relatively strong democratic government structure that has helped to progress the

nation out of its once extremely impoverished state. Tanzania, although progressing, is ridden

with a surplus of traps that prevents advancement of the country and halts its economic growth.

The paramount traps present in the Tanzanian society include a surplus of resources that hinder

trade and government transparency, as well as bad governance within the country that collapses

the internal foundations of the society. These traps, although deprecating, are being addressed by

the Tanzanian government and strategies to avoid traps can be implemented to avoid the

potential of economic collapse.

Tanzania is a country rich in natural resources, such as oil and gas. The surplus of such

resources, although beneficial in the realm of trade relations, impedes growth for the country.

This trap is described as a “‘resources curse”- whereby natural resources lead to rampant

corruption and macroeconomic instability” (The Guardian). This resource anathema can be

explained through the concept of the Dutch Disease and distinctively impacts the country in three

ways: 1. when there is an abundance of such resources in developing countries, the government
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is not required to tax exports, causing the absence of governmental transparency and a distrust

from citizens when the money received is not localized and citizens are unaware of where their

money is going; 2. conflict arises within countries when ownership of resources is unclear,

producing internal conflict; 3. resource surplus makes domestic currency worth less, causing

foreign investors to be less inclined to invest in foreign product when prices swell, in turn

affecting the country on an economic level. Tanzania’s law structure further restricts this resource

trap in many ways, including articles like the Petroleum Act, Tanzania Extraction Industries Act

of 2015, and the Oil and Gas Revenue Management Act (the Guardian). Revision on such

legislature at the governmental level would assist in improving the economic effects the resource

curse has on the nation. Without the revision of such acts, the resource trap has the potential to

swallow the nation’s economic status and sabotage the integrity of the Tanzanian government, “If

robust regulations and institutions are not in place to ensure that gas revenues are appropriately

managed and invested into diversifying the economy, Tanzania may become an unstable

country” (The Guardian). The resource trap directly impacts the economic and governmental

state of Tanzania and acts as a significant complication that needs attention.

The governmental structure of Tanzania has and will make a significant impact on how

the resource curse will affect its structure. Tanzania, formally considered a democratic republic,

is considered relatively secure and inclusive as compared to its totalitarian neighbors. The

democratic state of Tanzania allows for the community opinion of voters and voters have more of

an impact on the outcome of political issues and election results. Although the political structure

can be seen as relatively progressive, the majoritarian expression is commonly overcast,

specifically due to bad governance. The International Growth Centre explains the impact
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deliberative democracy has on the fate of the country, “In a democracy like Tanzania, choosing

how to use natural resources shouldn’t be reserved for technocrats. The fact that people’s

carefully considered opinions on gas policy differ significantly from their naïve first reactions

demonstrates that ordinary Tanzanians – mostly rural, many illiterate and poor – have the

capacity to wrestle with complex policy issues” (IGC). The inclusion of the voice of the people

in a democracy like Tanzania is crucial in escaping the resource trap. The IGC’s research on

Tanzanian voter response against fuel subsidies and saving gas revenue long term offers a new

perspective on how the resource trap influences the Tanzanian economy and more attention to

citizenry ideals could potentially remove the threat of the resource curse and insure better

governance.

The presence of bad governance in Tanzania is a trap that thwarts economic progression

in the sense that the nation struggles for the social dimensions of democracy and stability of the

socio-economic and political states of the nation. The lack of “good” governance in a nation is a

major inhibitor of progression that affects all other aspects of the nations issues when the

foundational structure of the nation is unstable. This faulty foundation impacts the legislature on

things like trade, resources, socio-economic standards and essentially touches all aspects of a

nation. Issa Shivji’s analysis of the democratic and governance state of Tanzania touches on this

disparity in the structural system. Shiviji discusses the liberalization of the nation and the push

towards socialism and how these economic structures through governance forced Tanzania into a

liberalized state, commencing the stature of bad governance on the nation.

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African states, including the most nationalist among them, such as Tanzania, were in no

position to resist (the market liberalization). They eventually gave in, wreaking havoc,

on the one hand, in the already fragile economies and, on the other hand, on the welfare

of the most disadvantaged of their people. Import-substitution industrialization, which

had been one of the developmental planks of the nationalist period, was virtually wiped

out, as industry after industry was bankrupted, unable to withstand the imports of cheap

goods. Agriculture stagnated. There was little the governments could do beyond

exhorting the peasants to work harder. Social indicators such as education, health, water

and electricity began to decline (Shivji, 2).

This market liberalization and the shift towards a democratic state acts as a trap in itself, forcing

Tanzania into an economic decline correlated with the progression of the governmental and

political structures of the country. The bad governance trap is complex and the response to such a

trap is centered in the implementations of government structures and the legislation in place to

fight against impeding pitfalls.

The weak infrastructure of the Tanzania government is a trap that especially influences

the economic status of Tanzania, as well as the welfare of its citizens. Tanzania has little

protection against corruption and no safety net for economic disparity. Its citizens, although

considered wealthy when compared to Tanzania’s neighboring countries, experience extreme

poverty despite Tanzania’s economic growth. The government, although poor in many ways, has

some legislature to fight collapse, including articles on resource curses and framework against

money laundering, extortion and other economic crimes that affect the nation’s fiscal stability.
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The nation is aware of the traps that exist and have worked to revise legislature that further

entices its downfall into such traps. Revision of legislation on natural resources is one significant

way the government of Tanzania could work to address such challenges, as well as a shift to

democratic legislator and consideration of the voice of the people to confront systematic issues.

Emendation of regulations and ordinances, as well as a push towards a more social-democratic

form of government could continue to advance the nation away from possible traps, in turn

avoiding exclusion of the people and improving economic conditions. The democratic republic

state of Tanzania is one significant reason Tanzania has grown and bettered its structure in

comparison to its neighbors. The ongoing push towards a more socialized society will continue

to move the nation of Tanzania in the right direction, in turn addressing the resource and bad

governance traps and improving the state of poverty and development of the country.

Works Cited

Patrick, Stewart M. “Why Natural Resources Are a Curse on Developing Countries and

How to Fix It.” The Atlantic, Atlantic Media Company, 30 Apr. 2012, www.theatlantic.com/international/

archive/2012/04/why-natural-resources-are-a-curse-on-developing-countries-and-how-to-fix-it/256508/

“Tanzania Corruption Report.” Business Anti-Corruption Portal, www.business-anti-

corruption.com/country-profiles/tanzania/.

The Guardian. Tanzania’s Gas Sector: Potentially Explosive, www.ippmedia.com/en/business/

tanzania%E2%80%99s-gas-sector-potentially-explosive.

Sandefur, Justin. “Can Deliberative Democracy Cure Tanzania's Resource Curse?” IGC, 25 Aug.

2016, www.theigc.org/blog/tanzania-poll-results-can-deliberative-democracy-cure-the-resource-curse/.
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Shiviji, Issa. “Good Governance, Bad Governance and the Quest for Democracy in Africa: An

Alternative Perspective”. http://hakielimu.org/files/publications/

document67good_bad_governance_en.pdf