WRONG TURN AT ARUSHA         p. 2 of 2

The Arusha Declaration 

          The TANU Executive met for a week in Arusha early in February. Here Nyerere arrived at the end of his tour of rural areas, and it was immediately apparent that important policy decisions would be taken during the week. A Presidential Commission was to have been set up to define Tanzanian socialism, but Nyerere announced that the country could not wait for its report. At the end of the week, the Arusha Declaration was announced. 

          The Declaration stressed from the outset that there is no room for class divisions in Tanzania, or for one person to live off the labor of another. All Tanzanians must be workers or peasants, and the State must control the major means of production. The industries and resources comprising that category were defined. 

          Money was the subject of a long discourse intended to show that Tanzanians could not hope to solve their problems solely through its use; Tanzania is too poor, and outside assistance inadequate. Tanzania’s major resource was its people. The document regretted the amount of stress put on industry, citing again the inadequate finances and technical knowledge. Increased production of agricultural crops would be the only road to development. The Declaration warned that there are many kinds of exploitation, and in Tanzania there is the danger that exploitation of the peasants by the town dwellers may occur. 

          The last part of the paper is devoted to outlining the leadership qualifications for the party and the Government. It is not a list of desirable virtues, but a set of severe restrictions on the uses of influence and private wealth. No party leader, Government minister or civil servant down through the middle ranks should in any way be associated with the practices of capitalism or feudalism; that is, none should hold directorships in private companies, have two or more salaries, or own houses rented to others. (16) 

          The Declaration was followed in a week by the nationalization of all banks, eight milling companies, all life insurance companies, and eight import-export firms. Full and fair compensation was promised. Seven other firms were notified that the Government wished to buy a controlling interest in their businesses, and the sisal plantations were slated for nationalization or partnership with the Government. The Government then gave assurances that no other industries or businesses were to be affected, and appointed as Minister of Commerce and Industry a man in whom the private sector had confidence. 

          There is some evidence that even Ministers with direct responsibility for commercial and financial affairs were not advised of the nationalizations in advance. Certainly the civil service had not been prepared for the event. 

          Most attention outside and inside Tanzania focused on the nationalization measures, but they were probably not foremost in the mind of the President. His emphasis was on Self-Reliance and the quality of the nation’s leadership. He was apparently not displeased by the furor surrounding nationalization and later remarked to the press that “this little explosion about nationalization . . . has prepared the mood for everything else.” (2) But he was not pleased with the reactions to the strictures on party leaders. The President offered to clarify the Declaration for Members of Parliament and received 21 questions from them. In his responses, published by the Tanzanian Government Press, the President remarked with displeasure on the fact that every question concerned “qualifications for leadership” and none concerned “self reliance.”  The questions all implied criticism of the severity of the restrictions. (17) One observer commented that the Declaration is popular because it is directed against domination from abroad and for self-reliance -- but the former is better understood than the latter. (25) 

          The Arusha Declaration was followed in March by “Education for Self-Reliance,” recommending a radical departure from the inherited educational system. The President wrote it without consultation with the Ministry of Education. The document suggests a reorientation of the system to meet the needs of the vast majority who will have only primary schooling and spend their lives on the land. It recommends that Swahili be the language of instruction and that every school in rural Tanzania have a farm attached to it. The statement is widely admired by educators concerned with African problems, and would repay further discussion, but unfortunately it bears only peripherally on the topic of this paper. (19) 

          Nyerere’s third major policy declaration of the year was issued in September. “Socialism and Rural Development” begins with a romantic version of traditional African family life, extolling the virtues of mutual respect, common ownership of property, and a general obligation to work. This is the concept of Ujamaa, or familyhood, in which every member of a family must have a minimum standard of food, shelter and clothing before anyone received anything extra. Nyerere had spelled out the meaning of Ujamaa before, in the introduction to a collection of his writings published in January 1966 (18) and possibly elsewhere, but in this document he extended the implications of the parable considerably. 

          He said that the ideas of selfishness and individual advancement came from colonialism, as did the growth of urban centers and wage employment. In the countryside, cash crops have led to larger farms and competition. “The moment . . . a man extends his farm to the point where it is necessary for him to employ laborers in order to plant or harvest the full acreage, then the traditional system of Ujamaa has been killed . . . Thus we have the beginnings of a class system in the rural areas.”  The President believes a class system can be avoided by the introduction of “economic and social communities where people live together and work together for the good of all.” (21) He does not expect this to happen in a short time, nor does he believe that the basic productive unit will in all cases be the same. He suggests that, to begin, people should be persuaded to move their houses into a single village, then to plant a communal plot, and finally to grow all crops communally. 

          Since publication of this policy, the President has spent 40 days popularizing it in the rural areas, including a 138-mile walk from Butiama, his home village, to Mwanza, where the first meeting since Arusha of the TANU Executive Committee was held. (6)   

Influences on Policy 

          In this section an attempt will be made to identify some of the personal influences on Nyerere as well as the objective factors bearing on these policies. Personal influences are of unusual importance in Tanzania because of the President’s eminent position. It has already been noted that “Education for Self-Reliance” and the nationalization decisions were taken without consultation with the Ministers or civil servants directly involved. It is also likely that the Ministry of Agriculture had little or nothing to do with “Socialism and Rural Development.”  The education and rural development policies were promulgated between meetings of the TANU Executive Committee, so that body could have had nothing to do with their preparation. The policies came from Nyerere alone, and personal influences on him are thus an important subject to consider when they can be identified. 

          It was earlier noted that several dangerous economic trends have become visible since independence. To recapitulate briefly, the wage bill of the economy went up sharply while the number employed actually declined by one-sixth. Nyerere said in October that wages have nearly doubled since independence. (27) Agricultural production showed a healthy increase, but the major program designed to modernize rural methods had failed. Agricultural incomes were up only 5% since independence, according to an official estimate, which cannot be expected to be erring on the side of under­estimation. (7) It is reasonable to assume that most, if not all, the increased income went to the relatively small areas where the large production increases of cotton and coffee arose. For the rest of the peasant economy, incomes probably have declined in absolute terms since independence. 

          It is possible to see how this happened. The small industrialization that did take place was of an import-substitution nature. Import substitution often has the immediate effect of raising prices to cover the less efficient domestic producers. Wage increases in the towns received by the employed few (9% of the labor force) also tended to raise the prices of the simple goods the peasants bought in the shops. 

          The growth of producers and marketing cooperatives since independence was substantial (they doubled in number to 1600), but they failed to offer better terms for the farms. Mismanagement was so wide­spread that in September 1967, the Government suspended the registration of 450 of them. (5) In the marketing field this was a particularly significant failure. Asians have dominated the marketing and distribution sectors in Tanzania for many years; the failure of cooperatives to supplant them was a political and economic problem. 

          There is an interesting possibility that Nyerere chose the businesses the Government was to nationalize with a particular analysis of the marketing situation in mind, and that this analysis was not quite accurate. Ian Livingstone, former economics professor at Makerere College in Uganda, analyzed the marketing system in Tanganyika for an international seminar in September 1964. He described the system as having three levels, each controlled by the one above. Primary buyers cover the countryside buying pro­duce from the peasants. They sell to the merchants in the larger up-country towns, who in turn sell to export firms on the coast. Livingstone found very large credit advances were common from the coastal exporters to the mer­chants and from the merchants to the traders. He concluded that the exporters thus controlled the merchants, and the traders were little more than agents for the merchants. As an example, he said that 95% of the produce of Tahora was exported through five or six large exporting houses. (12) 

          Whether Nyerere read the piece by Livingstone, or came to similar conclusions by some other route, his choice of targets for nationalization seems based on that analysis. Nationalization of the banks put the Government in a position to break the credit control exercised by the large firms. The milling companies and export-import firms became eligible by similar reasoning. The latter case is particularly interesting because when the Government took over the export firms thought to be the largest, it found itself in control of only 10-15% of the trade. Livingstone’s article implied much greater centralization. 

          Distribution is similarly almost entirely in the hands of the Asians. A study done by the Economist Intelligence Unit in 1962 revealed that Asian shopkeepers were exceptionally low-cost distributors, largely because the Asians do not consider family labor an overhead expense. The Government nevertheless set up a State trading firm, COSATA, to distribute goods, and found that it could not compete profitably with the older system. COSATA retrenched, but again it is politically difficult to abandon efforts to wrest control of distribution from the Asians. (27) 

          Another scholarly work which may have influenced Nyerere was an article titled “Trade and Aid in Tanzania” by a young Canadian economist at the University College. The article was not published until April, but was the subject of a lecture given on February 10, the week following Arusha. The article was based on the premise that in this decade the rising prices of imports and the falling prices of exports have erased the value of the gains in export volume achieved by developing nations. It went on to state that when allowance is made for increasing prices in the produce of donor countries, the real value of aid has fallen since 1963, and the author predicted that the underdeveloped world would have to continue its battle for development on the terms of the present system of international economic organization. (9) Again, Nyerere may have independently reached the same conclusions, but the rationale is here for his emphasis on self-reliance in the Arusha Declaration, and it may be significant that he had the article reproduced and distributed to all senior civil servants. 

          These factors all contributed to what appears to have become a powerful conviction of Nyerere that privileged classes were emerging in Tanzanian society. The benefits of the modest gains so far made by Tanzania were not going to those who had produced them, the peasants. They were being absorbed by the trade unionists, the civil servants, the students, and some of the cooperatives. 

          Another powerful influence on Nyerere became apparent shortly after Arusha.  Rene Dumont, a 63-year old French agronomist with broad experience in Indochina and West Africa, published a controversial book called L’Afrique Noire est Mal Partie in 1962. It was published in English in 1966 under the title False Start in Africa. Dumont is much like Nyerere in many ways, although perhaps without the President’s subtlety of mind. Dumont’s book is an opinionated account of West African development pro­blems, a collection of sound lessons in agronomy interspersed with moralistic strictures on wastefulness and folly. But the social ills he singles out for the most scathing attacks were sharply relevant to those of Tanzania. Dumont, for example, hits out at what he calls “class colonialism” -- privileged African groups overly aware of their new dignity, with large official cars and high salaries. He calls the civil service a new type bourgeoisie, and ridicules the jacket and tie in hot countries as a symbol of the alienation of the bureaucrats from the “true proletarians of modern times,” the peasants. He lashes the metropolitan educational systems, still in style virtually throughout Africa, for divorcing their products from the soil. He criticizes the South Americanization of the cities, by which he means the flocking of rural underemployed to the towns where they swell the ranks of urban unemployed. He favors the introduction of draft animals, not tractors, and believes full employment can be immediately achieved by convincing the peasants to donate labor to development schemes. (4) 

          All this coincided closely with Nyerere’s own assessment of the problems of Tanzania. Much of his “Education for Self-Reliance” comes almost verbatim from False Start in Africa, although much more comes from Nyerere. In August, Dumont arrived in Dar es Salaam at the request of the President to advise the Government on rural development and to submit a personal report to Nyerere. He was in the country for six weeks and left, typically, with a blast at the young civil servants who arrive at work at 9:30 while he, at sixty-three, is on the job each day by 6:30. Nyerere’s “Socialism and Rural Development” was issued in September, just after Dumont’s departure. (21) It would be difficult to say which portions of that document come from Nyerere and which from Dumont, they appear to think so much alike. Therein lies part of the problem. Dumont’s strengths are Nyerere’s strengths, and his weaknesses are also to some extent shared by the President. 

An Assessment of Arusha and After 

          It is impossible not to admire the courage and intelligence with which President Nyerere has analyzed his country’s baffling problems and set out to do something about them. Few leaders anywhere are prepared to slash the salaries of their Ministers, to make them turn in their big cars, and then to tell them that if by chance they have any money the only acceptable return on it is the interest rate in the State bank. He doesn’t stop with the Ministers, of course; the peasant who has followed the advice of the Government extension agent and increased his income, and hence his holding, may feel equally misjudged when told he is exploiting the men he hires to help him farm. But the problems of Tanzania, as a primary producer in a world of falling export prices, are staggering, and the need for action urgent. 

          Much of what the President has done will not be criticized here. Salary reductions and smaller ministerial cars are positive steps, and the general policy of turning from urban and industrial development, under the present conditions, to rural development is surely correct. If the full range of policies set forth in the Arusha Declaration and “Socialism and Rural Development” are vigorously implemented, however, the result is likely to be very unfavorable for Tanzania’s growth. 

          Most of my doubts revolve around the question of incentives to work and save, and this is a difficult area to deal with without letting personal values prejudge the issues. Value judgments may be impossible to avoid, but I will try to use examples to back up opinion as much as possible. 

          First, the limitation on returns to savings imposed by the Arusha Declaration. The four to six per cent interest rate likely to prevail may well lead to an increase in luxury consumption. In a country like Tanzania, where returns on investment are normally several times that rate, the bank is unlikely to attract many savings out of current income. It would be possible to raise the interest rate the amount needed to attract additional savings, but this would have some of the same moral arguments against it as private investment, that it would tend to create a privileged class with relatively high earnings. 

          Ironically, the rigid restrictions may actually foster corruption, particularly if resentment against the regulations is widespread, and there is some evidence that it is. In this situation, being unable to earn extra income legally, the dissatisfied party leader or civil servant may accept bribes or engage in other forms of corruption, his guilt lessened by the knowledge that his peers feel as he does that his earnings are unfairly limited. This sort of behavior could become widespread. 

          It is still possible, of course, for Tanzanians who are not in leadership positions to invest in profit-making enterprises, and several in high positions have already decided to leave Government. But this creates class divisions just as the old system allegedly did, and the dividing line is greatly sharpened. There is the additional point that the prohibition will leave greater opportunities for Asian entrepreneurs, and this can hardly be a policy objective. 

          The prohibition against having more than one salary is likely in obvious ways to reduce the hours of effort a man is willing to make. There are admitted dangers in a one-party state when Government and party leaders are permitted to be directors of important international business organizations, but this abuse could perhaps have been handled with conflict-of-interest legislation without the necessity of a blanket prohibition against any form of “moonlighting.”  In a country where the single largest constraint is qualified high-level manpower, a policy encouraging full utilization of what is available would seem more sensible. * 

*A. 0. Hirshman, for example, has recommended a policy almost directly opposite to the Tanzanian: “The art of promoting development may consist primarily in multiplying the opportunities to engage in these dissonance-arousing actions (pursuit of individual profit, entrepreneurial risk-taking, promotion according to merit, etc.), and in inducing an initial commitment to them.” (11) 

          It is in the agricultural field where the adverse results of the new policies are likely to be most severe. While it is generally accepted that the long-term elasticity of demand for primary products lies somewhere below 0.7 (24), this is not necessarily true for African products because of their small share of the world market and their low labor costs. This comparative advantage can be maintained or even increased as development successes in Latin America raise labor costs on that continent still further (23), but this is only possible if African production costs remain low, that is, if emphasis is put on efficiency in both production and marketing. 

          The new policies are unlikely to promote this necessary efficiency. The record of Tanzania’s state enterprises has been miserable to date. Big game hunting, nationalized in early 1966, was denationalized in October 1967, after the state company lost $250,000. (14) Investment by state enterprises, as we have already noted, is running at only 30% of plan targets. To turn a substantial responsibility for agricultural credit, marketing and milling over to the state is to increase the demand for managers at a time when the public sector is already in critically short supply.  

          There is an important psychological point in connection with the conduct of state enterprises. People have been led to believe that the main reason Tanzania is poor is due to foreign exploitation rather than low productivity. They are therefore likely to expect loans to be cheaper and more available from nationalized banks, prices to be lower at state trading companies, and wages to go up in nationalized businesses. (25) 

          There is little evidence that the peasants will welcome the communal farm idea. John de Wilde has noted that where Government has fostered African producers’ cooperatives, for example in Mali, the cooperative fields have remained extremely modest and their cultivation generally has had a lower claim on a farmer’s time than his private crop. Also, the standard of cultivation is usually below that of individual farms. (3) Berg points out that there is a tendency to coercion inherent in communal effort, but peasants cannot readily be bullied because the retreat to subsistence cultivation is fairly easy. (1) It seems quite likely that a farmer faced with the choice of joining a producers’ cooperative or curtailing production to the level that he and his family can handle, will choose the latter. 

          President Nyerere’s undeniable charisma may help him over some of these shoals, but not all of them, and not for long. He seems, with commendable purity of purpose, to be leading his poor country down the road to continued poverty. It was, perhaps, particularly unfortunate that his path should cross with Dumont’s just at this time. Each has reinforced the other’s belief that if people can only be made to stop exploiting other people, all will be well. Both rely on the same methods, largely exhortation well seasoned with paternalism. Dumont said, “The need now is to take the African peasant in hand, with understanding and skill, and show him the advantages and necessity of the modern techniques of cultivation and livestock management.”  A noble ambition, and Mwalimu took many a peasant by the hand on his 138-mile walk, but one fears that moral encouragement may not be enough. 

          One can readily sympathize with the President and share his frustrations about the six years since independence. The failure of the settlement schemes and the fall in sisal prices in particular dealt him severe blows. But in retreating from pragmatism to ideology, he is accepting a heavy moral burden. He is committing ten million people along with himself. He will be judged, not by his conception of social justice, but by the accuracy of his judgment of human behavior. If he is wrong in assuming that people will respond to the moral incentives he offers, and there is evidence that he is, then the results for Tanzania could be tragic.  

Bibliography 

1.       Berg, E. J.  “Socialism and Economic Development in Tropical Africa.”  Quarterly Journal of Economics, November 1964, pp. 549-574. 

2.       Cliffe, L.  “The Arusha Declaration: Challenge to Tanzanians.”  East African Journal, March 1967, pp. 3-10. 

3.       De Wilde, J. C.  Agricultural Development in Tropical Africa, Vol. 1.  Johns Hopkins Press, Baltimore, 1967. 

4.       Dumont, Rene.  False Start in Africa.  Praeger, New York, 1966. 

5.       East African Reporter.  October 6, 1967. 

6.       East African Reporter.  November 17, 1967. 

7.       Government of Tanzania.  “Background to the Budget.”  June 1967. 

8.       Government of Tanzania.  “Five Year Plan for Economic and Social Development.”  1964. 

9.       Helleiner, G.  “Trade and Aid in Tanzania.”  East African Journal, April 1967. 

10.       Hendrix, W. E.  “The Experience of More Rapidly Developing Countries,” in Economic Development of Agriculture.  Iowa State University Center for Agricultural and Economic Development, Iowa State University Press, 1965, pp. 12-24. 

11.       Hirshman, A. 0.  “Obstacles to Development: A Classification and a Quasi-Vanishing Act.”  Economic Development and Cultural Change, Vol. XIII No. 4, July 1965, pp. 385-393. 

12.       Livingstone, Ian.  “Marketing of Crops in Uganda and Tanganyika,” in Steward and Urd (see below), pp. 125-147. 

13.       McAusland, J. P. W.B. and Y. P. Ghai.  “Constitutional Innovation and Political Stability in Tanzania: A Preliminary Assessment.”  Journal of Modern African Studies, Vol. 4 No. 4, 1966, pp. 479-515. 

14.     New York Times.  “Government of Tanzania Denationalizing Big Game Hunting.” November 13, 1967. 

                      15.              Nye, J.  “Tanganyika’s Self-Help.”  Transition, Vol. III, November 1963.  

                       16.          Nyerere, J. K.  “The Arusha Declaration.” Government Printer, Dar es Salaam, February 1967. 

17.     . . . . . .  “Arusha Declaration: Answers to Questions.”  Government Printer, Dar es Salaam, April 1967. 

18.     . . . . . .  Freedom and Unity.  Oxford University Press, London, 1967. 

19.     . . . . . .  “Education and Self-Reliance.”  Government Printer, Dar es Salaam, March 1967. 

20.     . . . . . .   “Principles and Development.”  Government Printer, Dar es Salaam, June 1966. 

21.     . . . . . .  “Socialism and Rural Development.”  Government Printer, September 1967. 

22.       Ruthenberg, H.  Agricultural Development in Tanganyika.  Springer-Verlag, Berlin, 1964. 

23.     Seers, Dudley.  “International Trade and Development - The Special Interests of Africa,” in Stewart and Urd (see below), pp. 19-25. 

24.       Stewart, I. G., and H. W. Urd, Eds. African Primary Products and International Trade. Seminar, University of Edinburgh, September 1964, University of Edinburgh Press. 

25.       Svendsen, K. E.  “Socialist Problems After the Arusha Declaration.”  East African Journal, May 1967, pp. 9-15. 

26.       Venture, Vol. 19 No. 6.  Fabian Society, London, June 1967. 

27.     The Standard.  Dar es Salaam, October 18, 1967. 

28.     World Bank (IBRD).  The Economic Development of Tanganyika.  Johns Hopkins Press, Baltimore, 1961.