TH© POLITICS OF ECONOMIC LIBERALISATION IN URBAN TANZANIA Bulbul Dhar Submitted to the University of London for the PhD Degree 1995 School of Oriental and African Studies 1 ProQuest Number: 10673195 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a com plete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. uest ProQuest 10673195 Published by ProQuest LLC(2017). Copyright of the Dissertation is held by the Author. All rights reserved. This work is protected against unauthorized copying under Title 17, United States C ode Microform Edition © ProQuest LLC. ProQuest LLC. 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106- 1346 Abstract This thesis examines the political responses of urban Tanzanians to the policies of economic liberalisation implemented since the late 1980s by the Government of Tanzania as part of the Structural Adjustment Programme sponsored by the International Monetary Fund and the World Bank. It also examines their political responses to the issue of multiparty politics. The argument is that even though Structural Adjustment has been initiated in Tanzania, it crucially needs public support to engender the kind of government commitment and capability that is required to enable the government to implement it fully. It looks at three categories of respondents, those of the urban lower classes, those in the government and party bureaucracy and those in the educational and media sectors, who form part of the intelligentsia. The analysis is based on fieldwork carried out in the three major towns of Dar-es-Salaam, Arusha and Dodoma where open-ended interviews were conducted with more than 290 citizens. One wide-spread response to the economic hardship, since the early 1980s, has been to work in the informal sector, which along with the illegal underground economy, has been termed the Second Economy. The responses largely indicate a willingess to put up with the hardships imposed by the economic austerity of the liberalisation measures, over and above that caused by the economic crisis of the early and mid-1980s. But whether this public tolerance will continue in the absence of further short-term benefits is not clear. Also, regarding the moves towards political liberalisation and multiparty politics, these late-1980s developments are seen as improving governance, with a general feeling being that it has served to improve the functioning of the single-party. But clearly urban Tanzanians do not feel that more parties means greater democracy. However, the related phenomena of ‘disengagement’ from the state and the ‘informalisation’ of the economy, with their diversion of state resources including human capital away from the formal economy, do not augur well for the future success of structural adjustment. If, consequently, growth in the formal sector does not respond to structural adjustment as it is intended to, the political legitimacy of the leadership in the post-colonial Tanzanian state may well be under threat. 2 Contents page List of Tables and List of Maps 6 Acknowledgements 8 Map of Tanzania showing Regions and Districts 10 Chapter 1 : Introduction : State, Civil Society and 11 Structural Adjustment in Africa 1.1. High to Low Politics : ‘Disengagement’ of Civil Society in Africa 1.2. The Politics of Structural Adjustment in Africa 1.3. The Structure of the Analysis Chapter 2 : The Frame and Method of Analysis 25 2.1. Introduction 2.2. The Political Significance of the Urban Sector 2.3. Framework of analysis 2.3.1. The Implementation of Reform 2.3.2. Determinants of Political Response 2.3.3. Feedback Impacts of Political Responses on Reform 2.4. Methodology 2.4.1. The Sample of Respondents 2.4.2. Data Collection Methods 2.4.3. Limitations and Biases Implicit in the Analysis Chapter 3 : The Political and Economic Context of Liberalisation 51 in Tanzania 3.1. Introduction 3.2. From Independence to Arusha 3.3. Ujamaa and Statism 3.3.1. Ujamaa and the Arusha Declaration 3.3.2. The Development of the One-Party State 3.3.3. The State and Economic Development 3.4. The Economic Crisis and the Second Economy 3.4.1. Manifestations of the Crisis 3.4.2. Explanations for the Crisis 3.4.3. The Rise of the Parallel Economy 3.5. Conclusions 3 Chapter 4 : Indigenous and Sponsored Liberalisation in Tanzania 83 4.1. Introduction 4.2. Structural Adjustment and the IMF 4.2.1. IMF and Crisis Management : The Initial Years 4.2.2. Conditionalities and Indigenous Liberalisation (1982 - 1986) 4.2.3. IMF and Structural Adjustment (1986 - 1991) 4.3. The Impact of Liberalisation 4.3.1. The Implementation of Reforms : The Direct Effects 4.3.2, The Implementation of Reforms : The Indirect Effects 4.4. Ethical Duality and Political Re-assessment 4.4.1. Ethical Duality 4.4.2. Decision-making for Economic Reform 4.4.3. Pressure from Within : The Quest for Economic Reform 4.4.4. Demands for Multipartyism : The Quest for Political Reform 4.4.5. Political Reform and the Zanzibar Declaration of 1991 4.5. Conclusions Chapter 5 : The Urban Lower Classes 120 5.1. Introduction 5.2. Crisis, Adjustment and Survival : A Brief Account 5.2.1. Economic Hardship in the Early Eighties 5.2.2. Structural Adjustment and the Urban Lower Classes 5.2.3. Survival Strategies to Second Economy: The Rise of the Informal Sector 5.2.4. Government Responses to the Second Economy 5.3. Sample Description 5.4. Assessing Sample Responses to Structural Adjustment 5.4.1. Perceptions of the Direct and Indirect Impacts of SAP 5.4.2. Responses to Austerity Measures 5.5. Political Responses to Reform and their Implications 5.5.1. Views on Government Performance 5.5.2. Views on Multipartyism 5.6. Conclusions : Political Implications for Further Reform Chapter 6 : The Administrative and Party Bureaucracy 169 6.1. Introduction 6.2. The Bureaucracy of the Single-Party State : Essential Features 6.2.1. The Party-State Interphase 6.2.2. The Party Bureaucracy : Patronage and Accountability 6.2.3. The Administrative Bureaucracy : Roles and Responses 6.2.4. The Institutional Context of Bureaucratic Functioning 6.2.5. Corruption Within the Bureaucracy 6.2.6. Crisis and Liberalisation : The Impact on the Bureaucracy 4 6.3. Sample Description 6.4. Responses to Structural Adjustment 6.4.1. Economic Background of Sample 6.4.2. Economic Response to Hardship : From Crisis to SAP 6.4.3. The Impact of SAP Measures 6.5. Political Responses of the Bureaucracy : CCM and Multiparty Politics 6.5.1. Perceptions of Policy Prescriptions 6.5.2. Perspective on Political Parties 6.6. Conclusions : Bureaucratic Impressions of Future Reform Chapter 7 : The Intelligentsia 221 7.1. Introduction 7.2. The Education System in Tanzania : Three Phases of Development 7.2.1. The Early Years : 1961 - 1969 7.2.2. Education for Self Reliance : 1969 - 1984 7.2.3. Education and Liberalisation : 1984 - 1991 7.3. The Media in Tanzania : An Outline 7.3.1. A Profile of the Media 7.3.2. Communication Policy in the Single-Party State 7.3.3. Official Disinformation and the Rumour Culture 7.3.4. Liberalisation and Press Freedom 7.4. The Sample of Respondents 7.5. Responses to Economic Liberalisation 7.6. Perspectives on Political Liberalisation 7.7. Conclusions : The Political Responses of the Intelligentsia Chapter 8 : Political Responses in Perspective : Structural Adjustment, Civil Society and State in Contemporary Tanzania 281 8.1. Introduction 8.2. The Tanzanian State and its Commitment to Economic Reform 8.2.1. The Post-Colonial Tanzanian State and Structural Adjustment 8.2.2. Government Commitment to SAP in Tanzania 8.3. A Perspective on Political Responses to SAP 8.3.1. Reactions to Economic Liberalisation 8.3.2. Responses to Multipartyism 8.3.3. Political Pluralism : Structural Adjustment of Politics? 8.3.4. Political Responses to SAP : The Impact on Government Commitment 8.4. Conclusions : Structural Adjustment, Civil Society and State in Contemporary Tanzania Bibliography 306 5 List of Tables Chapter 2 : The Frame and Method of Analysis Table 2.1 : Sample Description Chapter 5 : The Urban Lower Classes Table 5.2.1 : Cost of Living (Retail Price) Index 1977-1986 (1970 = 100) Table 5.2.2 : Minimum Wage Levels, Nominal and Real (1966-1986) Table 5.2.3 : Index of Real Wages by Salary Level (1965-1985) Table 5.2.4 : Distribution of Government Expenditure by Sector (1977-1986) Table 5.2.5 : The Structure of Social Policy Expenditures Table 5.2.6 : Amount of Money allocated for the Ministry of Health Table 5.2.7 : The Structure of Annual School Fees Introduced in 1987 Table 5.2.8 : Informal sector units by year of establishment Table 5.2.9 : Estimated size of the Second Economy in Tanzania (1978-86) Table 5.3.1 : Distribution of the 143 Respondents of the Urban Lower Classes Table 5.3.2 : Number of Women Respondents in the Sample Table 5.3.3 : Occupational Structure of the Informal Sector Respondents Table 5.3.4 : Occupational Structure of the Formal Sector Respondents Table 5.4.1 : Responses to the Structural Adjustment Programme Table 5.4.2 : Relative prices for items of mass consumption Table 5.4.3 : Monthly Basic Necessary Income (BNI) Table 5.4.4 : Informal-Sector Activity by Respondents in the Sample Table 5.4.5 : Secondary Occupations of Informal Sector Respondents Table 5.5.1 : Party membership within the Sample Table 5.5.2 : For and against multipartyism Table 5.5.3 : Responses to the Prospect