a tripartite report - Unctad

36 VOLUNTARY PEER REVIEW OF CLP: A TRIPARTITE REPORT ON THE UNITED REPUBLIC OF TANZANIA – ZAMBIA – ZIMBABWE
mobilize adequate resources due to Government
intervention and controls in monetary policy
including exchange and interest rate controls;
system and the collapse of the credit system;
Decline of private sector activity and Foreign Direct
Investment (FDI) due to the nationalization of
foreign and domestic investments and assets; and
Transformation of the cooperative movement
and crop authorities serving as single agricultural
marketing channels dependent on public
subsidies.
It was inevitable that such an economic system
was heading for a collapse. Most of the industries
that were established from the late 1970s were
eventually run down and a process of industrial
re-organization and privatization commenced.
Since the mid-1980s, the Government undertook
economic liberalization measures in line with
global economic changes. The main objective was
to improve economic performance by providing
sound macroeconomic policies and adjustment
domestic productivity and consumer welfare 19 .
The formal introduction of the Economic Reform
Programme (ERP) in 1986 facilitated the extension
of the liberalization initiative to include widespread
price decontrol, and the removal of import restrictions.
The ERP introduced a series of measures designed
to establish a market economy based on free
trade through gradual introduction of complementary
policies that facilitate effective implementation
of trade policies. The set of complementary policies
which were put in place since then included liberalization
of agricultural marketing system including
the re-introduction of the cooperative movement;
restructuring and divestiture of State-owned enterprises
in the manufacturing, services and trade
sectors; and public sector reforms to facilitate more
and the establishment of an enabling business environment
through legal and regulatory reforms.
As part of the SAPs, a privatization and commercialization
programme was embarked on, which included
a competition nomenclature. In 1994, the United Re-
Fair Trade Practices Act and set up a department within
the Ministry of Trade to oversee its implementation. In
1996, the country proceeded to review its economic
course and formulated the “Sustainable Industrial Development
Policy 1996–2020” (SIDP). In the SIDP, the
Government of the United Republic of Tanzania (URT)
recognized the role of the private sector as the principal
vehicle in carrying out direct investments in industry.
To facilitate and consolidate this position, the
Government promised to undertake the following20 :
(i) Make enabling amendments in all major
policies, Acts of Law and legislations whose
provisions discriminate or tend to discriminate
against private sector investors;
(ii) Provide a suitable environment for promotion
of private sector investments, ensuring fair
trade practices and competition as well as
(iii) Develop social and economic infrastructure,
including industrial support institutions.
The SIDP rightly underscored that under the economic
reform measures, use of market forces had
replaced the use of central-government-regulated
economic management regime. Measures were
taken to iron out distortions inhibiting the smooth
functioning of the market forces, including price
decontrol, liberalization of marketing and procurement.
The Government further undertook to consolidate
functioning of the market mechanism including
full implementation of the 1994 Fair Trade
Practices Act 21 (which was the forerunner to the Fair
Competition Act of 2003). The Government also
promised to adopt a new trade policy that was to
inter alia, take into account fair trade practices.
edged
comprehensive National Trade Policy of
largely sought to place the trade regime, comprising
of foreign and internal trade for goods and
services at levels from wholesale to retail, under
public sector control and management. The successful
implementation of the National Trade Policy
was understood to depend on 14 fundamental
premises and challenges that served as prerequisites
towards achieving the objectives and the vision
of trade policy that the Government had to
focus on. They were indispensable factors for the
successful implementation of trade policies. The
22 :