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Tanzania at a Glance: 2000-01

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Tanzania at a Glance: 2000-01 COUNTRY REPORT Tanzania At a glance: 2000-01 OVERVIEW The political scene will continue to be dominated by campaigning for the October elections and by the current political crisis in Zanzibar. The president, Benjamin Mpaka, has been elected unopposed as the CCM's national presidential candidate. More importantly, Amani Abeid Karume has been selected as the CCM's candidate for the Zanzibar presidential poll. Because of his general acceptablity to all parties on the island—partly the result of his father's legacy—there is now a possibility that political calm may return to Zanzibar. The government remains committed to tight fiscal and monetary policy. Overall, the macroeconomic outlook is positive, with reasonable levels of GDP growth and low inflation. Owing to strong aid inflows, the government will have little difficulty in financing its budget and current-account deficits. Key changes from last month Political forecast • President Benjamin Mpaka has been elected the CCM's presidential candidate. • Amani Abeid Karume is the party's candidate for the presidency of Zanzibar. His appointment improves the chance of a reduction in politically motivated violence on the island. Economic policy outlook • The recently passed budget maintained the government's commitment to its overall economic policy, which is led by a tight fiscal and monetary policy. • In line with Tanzania's PRGF, the budget focused on improving revenue collection and increasing spending on social services. Economic forecast • Driven by the strong supplies of domestic foodstuffs, which are helping to restrain prices, inflation continued its downward trend and is now at a 20-year low. July 2000 The Economist Intelligence Unit 15 Regent St, London SW1Y 4LR United Kingdom The Economist Intelligence Unit The Economist Intelligence Unit is a specialist publisher serving companies establishing and managing operations across national borders. For over 50 years it has been a source of information on business developments, economic and political trends, government regulations and corporate practice worldwide. The EIU delivers its information in four ways: through our digital portfolio, where our latest analysis is updated daily; through printed subscription products ranging from newsletters to annual reference works; through research reports; and by organising conferences and roundtables. The firm is a member of The Economist Group. London New York Hong Kong The Economist Intelligence Unit The Economist Intelligence Unit The Economist Intelligence Unit 15 Regent St The Economist Building 25/F, Dah Sing Financial Centre London 111 West 57th Street 108 Gloucester Road SW1Y 4LR New York Wanchai United Kingdom NY 10019, US Hong Kong Tel: (44.20) 7830 1000 Tel: (1.212) 554 0600 Tel: (852) 2802 7288 Fax: (44.20) 7499 9767 Fax: (1.212) 586 1181/2 Fax: (852) 2802 7638 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Website: http://www.eiu.com Electronic delivery This publication can be viewed by subscribing online at http://store.eiu.com/brdes.html Reports are also available in various other electronic formats, such as CD-ROM, Lotus Notes, on-line databases and as direct feeds to corporate intranets. For further information, please contact your nearest Economist Intelligence Unit office London: Jan Frost Tel: (44.20) 7830 1183 Fax: (44.20) 7830 1023 New York: Alexander Bateman Tel: (1.212) 554 0643 Fax: (1.212) 586 1181 Hong Kong: Amy Ha Tel: (852) 2802 7288/2585 3888 Fax: (852) 2802 7720/7638 Copyright © 2000 The Economist Intelligence Unit Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Intelligence Unit Limited. All information in this report is verified to the best of the author's and the publisher's ability. However, the EIU does not accept responsibility for any loss arising from reliance on it. ISSN 0969-6776 Symbols for tables “n/a” means not available; “–” means not applicable Printed and distributed by Redhouse Press Ltd, Unit 151, Dartford Trade Park, Dartford, Kent DA1 1QB, UK 1 Tanzania Outlook for 2000-01 Political forecast Domestic politics In the lead-up to the national elections on October 29th 2000, the political scene will be dominated by two issues: the election campaign itself, and whether the Zanzibari question can be resolved or will lead to a further escalation of the violence that has plagued the island for the last three years. With the Chama Cha Mapinduzi party (CCM) poised to win a relatively easy victory on the mainland, it had seemed the main problem would be in Zanzibar. However, the recent election of Aman Abeid Karume as the CCM’s candidate for the island’s presidential poll does present an opportunity for national reconciliation, both on the island and between the island and the mainland. The positive turning point in the political situation in Zanzibar can be traced to the decision made by the ruling CCM at a special meeting in Dodoma, in June 2000, that Zanzibar’s current president, Salmin Amour, should not run for a third term. This decision substantially strengthened the position of President Benjamin Mkapa, and he was subsequently chosen to be the party’s national presidential candidate. The decision also weakened the position of Mr Amour within his own party, and led the CCM in Zanzibar to nominate four presidential candidates for the island in the recent party elections. Although one of these four was Dr Bilal, the current Zanzibar chief minister and Mr Amour’s chosen successor, Mr Amour’s waning position with the party encouraged the campaign to support Aman Abeid Karume, the minister for communications and transport. Importantly, Mr Karume is also the son of the late Abeid Aman Karume, who founded the Zanzibar revolutionary government and—along with Julius Nyerere—was the main driving force behind the union of Tanganyika and Zanzibar. Following Mr Karume’s selection as the CCM candidate, there was spontaneous and widespread public support for him throughout the island, both from the general population and, surprisingly, from the opposition parties. This positive reaction to his election gives him a strong chance of being able to reunite the divided CCM in Zanzibar. Moreover, as he is a candidate who is seen as being more acceptable to the opposition, there is a chance of that there will be less harassment of the main opposition party on the island, the Civic United Front (CUF). Moreover, it is also much more likely that, if elected, Mr Karume would seek to achieve consensus on the island by implementing the Commonwealth’s peace accord—without the modifications proposed by the outgoing president, Mr Amour. Finally, as the inheritor of his father’s pro- union mantle, he is likely to play down demands for independence from the mainland, although initially they will not be easy to ignore. Election watch The election process in Tanzania is now well under way. The registration of candidates is to start on August 1st, and voting will take place on October 29th. Divisions within the CCM have now been resolved, and the party should easily win re-election. What is uncertain is the size of the CCM’s majority, and EIU Country Report July 2000 © The Economist Intelligence Unit Limited 2000 2 Tanzania whether the opposition will win enough seats to give it an effective voice in parliament. The ruling party has several important advantages. Many Tanzanians, especially those in rural areas, regard the CCM as the natural governing party and they are unlikely to change their allegiance. Years of one- party rule have also built up a considerable political infrastructure, which penetrates to village level and has financial resources superior to those of any of the opposition parties. The opposition parties are hindered further by the fact that they have failed to establish formal or informal electoral alliances. As a result they face the prospect of vote-splitting, even in the urban areas where they are comparatively strong. Durable electoral arrangements are unlikely to materialise. Probably the best that can be expected is for the leading opposition party, the National Convention for Construction and Reform (NCCR-Mageuzi), to make the most of its perceived image as the only real alternative to the CMM, thereby attracting both undecided and tactical anti-government voters to its camp. The forthcoming elections will be broadly free and fair, but the harassment of opposition parties will remain a feature of the campaign. The CCM has actively spoken out against such intimidation, but it has not acted against the actions of some members of the police because many senior officers have close links with the party. International relations Political stability and steady—if unspectacular—progress in implementing economic reforms have traditionally been the main reasons why Tanzania has attracted substantial foreign support, and these factors are expected to continue throughout the 2000-01 outlook period. There is some concern over the government’s apparent disregard for political pluralism, but it is unlikely to attract serious criticism from foreign donors. This is partly because the conflict in neighbouring states of the Great Lakes and Central Africa has increased the importance of Tanzania as a centre of regional stability. The main international issue for the country is the problem of refugees fleeing the civil war in Burundi, of whom there are now around 320,000 living in displacement camps in western Tanzania. Concern over this influx is behind the government’s involvement in peace talks on the Burundian conflict. The talks are held in Arusha, Tanzania, under the mediation of the former South African president, Nelson Mandela. Economic policy outlook Policy trends Economic policy during the 2000-01 outlook period will be driven by requirements recently agreed with the IMF, under the poverty reduction and growth facility (PRGF).
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