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Wednesday, March 4, 2009

Because the IMF says so?

In an interesting move the President paid a surprise visit to the Dar-es-Salaam harbour on Monday, 2 March 2009. The surprise came just over a month after a presidential directive to decongest the port. It is also coming a week before the Tanzania and IMF summit ‘Changes: Successful Partnership for Africa’s Growth Challenge’ that will be co-hosted here in Dar-es-Salaam in 10 – 11 March 2009.

But, one may ask, what does the ‘persistent port congestion’ has to do with the IMF? Why keep sloganeering against the IMF through your own (national) problems? After all isn’t the IMF changing?

The answers are found in a “Letter of Intent of the government of Tanzania, which describes the policies that Tanzania intends to implement in the context of its request for a policy support instrument from the IMF.” The said letter, dated 3 December 2008, is made available at http://www.imf.org/external/country/TZA/index.htm by agreement as a service to IMF website users.

Revealingly, this ‘Letter of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding’ lists import clearance as part and parcel of IMF’s Policy Support Instrument (PSI) for Tanzania. But, one may ask again, what exactly is PSI? What does it have to do with port congestion? Are we so stuck to the extent that we need policy support to decongest our port?

Well, according to IMF’s ‘Factsheet – November 2008’ prepared by its External Relations Department, the PSI, “introduced in 2005, enables the IMF to support low-income countries that do not want – or need – Fund financial assistance.” So, after all, it is not about IMF’s ‘money’! Really?

The reality, as the Factsheet further reveals, is that the “PSI helps countries design effective economic programs that, once approved by the IMF’s Executive Board, signals to donors, multilateral development banks, and markets the Fund’s endorsement of members policies.” Underline, that is, note very well the keywords ‘signals’ and ‘endorsement.’

These two keywords are particularly important in a country that has a national budget that is heavily financed by donors – by nearly 42 percent in 2007/8 and 33 percent in 2008/9 – and that is attempting to be a market economy. No wonder in the wake of grand corruption scandals on the External Payment Arrears (EPA) and the Bank of Tanzania’s (BOT) Twin Towers donors hesitated to support the budget.

It is these ‘hesitations’ that need IMF’s signaling. In fact the IMF Factsheet defines “signaling” as “the information that Fund activities can indirectly provide about countries’ performances and prospects.” “Such information”, the Factsheet further notes, “can be used to inform the decisions of outsiders.”

Those outsiders, we are told, “can include private creditors, including banks and bondholders, who are interested in information on the repayment prospects of loans; official donors and creditors, both bilateral and multilateral, who may be interested in reassurance about the countries they are supporting; and the public at large.”

In low-income countries such as Tanzania, the Factsheet affirms, “such signals previously have been sent mainly in the context of the IMF’s Poverty Reduction and Growth Facility (PRGF), and the related Poverty Reduction Strategy (PRS) process.” Lest we forget, that process was an adjustment to the devastating Structural Adjustment Programs (SAPs). Ironically, it has now been adjusted to become our ‘own-ed’ National Strategy for Growth and Reduction of Poverty (NSGRP/MKUKUTA).

The moment we succumb to historical amnesia under the guise of ‘changes’ subtly piggybacked from Obamamania sloganeering we lose sight of why we tend to do the things the (pathetic) ways we do them. We lose sight of the fact that ‘poverty reduction’ has never been the actual meeting point between Tanzania and the IMF. Nor has it been ‘growth’ either. It has simply been business, as usual.

When we become that historical myopic we forget a Noma Award Economic historian reminder that the IMF and the World Bank “didn’t live up to their advanced billing as possible saviours of Africa” through SAPs. Rather, “they participated in the gory feast of milking Africa dry” whereby, according to the United Nations’ 1988 Report on ‘Financing Africa’s Recovery’, in “1986 and 1987 alone there was a net transfer of close to $1 billion from sub-Saharan African countries alone to the IMF.”

Our meeting point with the IMF is what has ironically been abbreviated LIMP – Liberalize, Marketize and Privatize. We are ‘limping’. That is what we have been doing since we gave up on Mwalimu Julius K. Nyerere’s inspired rhetorical query: ‘Who made the IMF the International Ministry of Finance?’

All this donor politics prompts us to thus “regularly update the IMF” in our Letter of Intent on their PSI: “Progress with the integration of the Customs and Excise Department’s and TISCAN’s system has continued, and is scheduled for completion by the end of 2008 by which time importers will only be required to file a single import declaration…In addition, the plan prepared for a successful transition from private contractors in custom (TISCAN and NECOR) is being implemented as planned.”

Arguably, it is such delays in what the Letter of Intent refers to as “TISCAN’s import clearance processes” that made the President lash “out at Dar-es-Salaam port authorities during a surprise visit to the habour” (The Citizen 3 March 2008). It made him say the “laxity must not be tolerated anymore.”

Surely the presidential move is laudable. Not because the IMF says so. But because Tanzanians say so.

© Chambi Chachage

Source: The Citizen 4 March 2009

3 comments:

Anonymous March 12, 2009 at 12:58 PM  

Chambi i think your a nice man, you sound very brave and articulated.

Anonymous May 3, 2009 at 10:46 AM  

Hi! Chambi nice to know your capacity of thinking. Your coming accrose to the matching style of your rate Brother Chachage Seth Chachage, the man who, was made me to think twice if he was pocessing the normal data memory capacity of thinking.
Nilipata bahati ya kuzungumza nawe kidogo sana wakati wa hafla ya kuhitimisha mkutano wa Leo H. Sullivan, katika Hotel ya Ngurdoto Lodge nje kidogo ya jiji la Arusha.
Kumbukumbu zinaniarifu kuwa katika sherehe hizo uliambatana na Rafiki yako kipenzi na Jamaa yangu sana Assa Mwambene.
Katika kipindi kifupi sana ambacho pia tulikitumia kujadili machache, kupanda basi dogo kwa kubanana sana, nilikufaidi, na kukufurahi sana kuwa kumbe nawe unafuata nyayo za Mwana Pan Africanism ambaye alifikiri vema katika mambo ya msingi na yanayojenga uafrika wa kweli, Chachage Seth.
Naamini bado upo Tumain ukiendelea na kazi za kuijenga fani yako na kufundisha. kaza Budi, Seth hakuanza tu alijijenga na kujengwa. Siku njema na Hongera

Chambi Chachage May 3, 2009 at 11:04 AM  

Anon wa May 3, huyo unayemzungumzia sio mimi ila ni Dr. Bukaza Chachage. Ukinitumia email yako kwenye chambi78@yahoo.com nitakutumia email yake. Pia ana column kwenye gazeti jipya la Kwanza Jamii hivyo unaweza kumsoma na kuwasiliana naye kupitia gazeti hilo. Nitamtumia ujumbe wako. Kila la heri.

Karibu kwenye ulingo wa kutafakari kuhusu tunapotoka,tulipo,tuendako na namna ambavyo tutafika huko tuendako/Welcome to a platform for reflecting on where we are coming from, where we are, where we are going and how we will get there

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