INTRODUCTION
This journal work will discuss the concept of social Exclusion. The focus will be on the following key areas:-
(i) Definition /Meaning of Social Exclusion
(ii) Literature review of social Exclusion
(iii) Causes of social exclusion
(iv) Social exclusion in Relation to Marginalization and poverty
(v) Approaches in fighting social exclusion (Empirical)
(vi) ANTI – Social Exclusion policies (Policy).
(vii) Anti-social exclusion policies – Tanzania context.
(viii) Conclusion based on lessons learned and my own opinions.
(ix) References
MEANING OR DEFINITION OF SOCIAL EXCLUSION
The first paradigm, sees exclusion as a breaking of the society and the individual.
Implicitly there is a core of shared values and rights a moral Community, around which social order is constructed; a variety of institutions provide the mechanisms for integrating individuals in society, and exclusion reflects their failure and a possible danger to the social body. This Model provides the underpinnings of the Republican notion of the French state. It is within this model that the present notion of exclusion originated. It is rather obvious why; there is a clear and unitary notion of what it is, that individuals and groups are excluded from.
The second paradigm sees exclusion as resulting from individual behaviors and exchanges. Societies are composed of individuals with diverse interests and capabilities, and the structure of society is built around a division of labor and exchange in both economic and social spheres. Individuals may excluded because the part ten of interests or contractual relationship among other actors, or their exclusion may occur as a result of discrimination of market failure or unforced rights. Society can be seen as composed of domains and are excluded from others.
Exclusion from one social domain does not imply exclusion from all. The third paradigm, sees society as hierarchical, with different groups controlling resources. Insiders protect their domains against outsiders by constructing barriers and restricting access to occupations, to cultural resources, to goods and services. At the same time, they promote solidarity within the group. Membership of society is therefore necessarily within the group. Membership of society may be complex, with a hierarchy of inclusions in the solidarity model. The rules determining access to the move privileged groups also determine vulnerability and determine who is excluded. The identity of excluded is thus socially constructed. The same mechanisms may exclude immigrants in one situation the illiterate in another and religions minorities in a third.
Exclusion is a central aspect of this paradigm; mechanism which underpins the existing structure of society.
NB:- These paradigms exhaust the different ways in which social integration can be conceptualized, at the same time they providing the meaning of the concept of social of social exclusion. Social exclusion can then be defined basing on two main frame works:-
☼ Social exclusion on an individual point of view:- Focuses directly on the nature of the lives of which people are leading. Excluded persons or groups are seen to be in a situation of disadvantage, just as those with low incomes are seen to be disadvantaged. To describe persons as “Socially excluded” (Rather than to describe them as “poor”)is to suggest that they are socially isolated in some sense, that they “have” or experience weak social relatedness. The socially excluded may lack social ties to the family, local community, voluntary associations, trade unions, or even the nation. They may be disadvantaged interims of the extent of their legal rights.
☼ Social exclusion as a property of societies this an institutional perspective in which social exclusion is a property of the basic institutional frame work and on going institutional arrangements within which individuals and groups “make choices and go about their daily business of making a living. The focus of social exclusion in this sense is not person, but rather the institutions, the rules, formal and informal, explicit and tacit, which enable and constrain human interaction. Social exclusion is present as a structural property of a socio-economic system. A society is divided segment ally and “the various segments of society organize around different rules, processes, and institutions that produce different system of incentives and disincentive to which individuals respond”
☼ Despite the diverse definitions, social exclusion is always seen as a state of ill-being and disablement, which individuals and groups experience. Social exclusion encompasses both welfare as congenially understood in economic analysis of poverty; i.e an –inability of persons to find employment; to make a live hood etc. Finally, the studies have shown that social exclusion can be analyzed as both a process and state. In both cases, this entails going beyond resources allocation, power relations, culture and social identity.
LITRATURE REVIEW OF SOCIAL EXCLUSION:-
As an analytical concept, the term social exclusion was originally coined in France in 1974 to refer to various categories of people-labeled “social problems’ and who were unprotected by social insurance. Social exclusion in this context referred to a process of social disintegration, in the sense of a progressive rupture of the relation ships between the individual and society. But since the late 1980s, the term social exclusion “has also been propagated the European commission, which was increasing concerned with the problems of long-term unemployment and of unskilled workers and immigrants.
Whilst the use and power of the nation of social exclusion was well established in Western Europe and also to some extent in the USA , with the label of the “underclass”, it was largely absent from the social development debate in the non-industrialized World. And I was precisely one of the objective of the IILS/UNDP Project to test its relevance and value.
CAUSES OF SOCIAL EXCLUSION / SOCIAL DISADVANTAGE:-
The study which was conducted in certain Countries, including Peru in Latin America, Tanzania in Africa, India and Thailand in South and South-east Asia, Yemen from the Arab World; and Russia from the former USSR; the study shows that there is a variety of possible causes of social exclusion. Some of them are:-
☼ In some Countries social exclusion has been found to be caused by policies and institutions, mostly on individual levels.
☼ In other Countries the cause has been found to be brought about by the institutional structures, both formal and informal, and exuberated by the working of the markets; the scope and configuration of citizenships rights and the pattern of associational life, including discrimination Tory practices, of civil society. The associational life and pervasive values in civil society intertwine with the working of the markets and states to reinforce, or counteracts, social exclusion in the study of perm social exclusion is found in economic, political and cultural processes, and the basic markets of labor, credit, and insurance because they do not clear through price adjustments and, quantitative rationing, based on screening devices and selection procedures occurs. Some of the people who are capable and willing to participate in market exchange are excluded or relegated to segments which are less profitable or more risky. Secondly, exclusions from universal rights and political processes are derived from a number of counter veiling tendencies. For example, the elite might be willing to share certain powers and recognize certain rights for the population as a whole. Finally, cultural exclusions arise in the sense that certain individuals cannot participate in social networks, eg clubs. There is a hierarchy of these networks and ruling classes set restrictive conditions membership in high class networks in order to preserve privileges. The studies of India and Yemen both identifying factors which facilitate and constrain the ability of the state to deliver, to all citizens, basic social rights such as education, health and social security. This was found to be due to slow economic growth (or stagnation) limits the amount of financial resources available for social expenditures, whilst at the household level, low incomes limit the ability of the poor to pay for services. Administrative inefficiencies, weak organization, lack of priority setting and of accountability and poor planning, a wrongly focused structure of expenditure, all compound the problem of lack of resources. But the critical factor which prevents the realization of these rights which the government recognize as desirable, is the working of the political system.
☼ The other cause of social exclusion has been identified to be brought about by international relationships among nations. International relationships have important effects on domestic economic, social and political institutions. Although social exclusion within Countries in the result of the way in which their economic, social and political institutions are changing and the nature of domestic policies, the studies make it clear that social exclusion cannot simply be attributed by “internal factors’, but international relationships are increasingly and ever more deeply implicated in what is happening in Countries. In Tanzania, India and Russia, a major event shaping social exclusion is the reform programmes which are encouraging economic activities. In each case, reforms which are geared to open up economies to competition from the erosion world have been associated with the erosion of old social integration. In this process, citizenship rights have shrink.
SOCIAL EXCLUSION – RELATED TO MARGINALIZATION AND POVERTY:-
Social exclusion can be seen as an element within a narrow definition of poverty in terms of the minimum standard of living below terms the minimum standard of living below which one is absolutely poor. This is implemented using a consumption – based poverty line, which would include not simply food and other basic material needs, but also an amount reflecting the cost of participating in the everyday life of society. In the other hand social exclusion can be seen as replacement for poverty. This two nations leads to conclude that social exclusion is a broader notion of poverty. In the study carried in Tanzania and Russia, material deprivation and possessions is one aspect of social exclusion.
SOCIAL EXCLUSION – CURRENT STATUS (EMPIRICAL REVIEW)
The studies carried in a set of Countries, both rich and poor, suggest that social exclusion appears to occur within all economies. But it manifests itself in different forms and intensities as the result of the cultural and institutional specifities, and the differences in perception of which are the most critical processes. In Industrialized (rich) Countries, social exclusion is particularly related to long term unemployment and the loss of acquired rights, particularly those associated with work.. social exclusion in developing (poor) Countries takes different forms which are related to the degree and nature of incorporation into wider society through processes of market formation and the provision of citizenship rights.
APPROACHES IN FIGHTING SOCIAL EXCLUSION
Three approaches has been distinguished; and they are based on the premises that poverty reduction required goods people and institutions
☼ “Goods – Centered approach”:- Here the focus is command over commodities, seen as a source of welfare of utility. The goods centered approach identifies peoples as being poor when their living standard falls below same minimum worm. This is most basically seen as having income insufficient to obtain a food – intake which maintains physical efficiency; and other basic needs.
☼ The “people – Centered “ approach:- This approach; focuses on improving peoples lives. Here what matters is the nature of the live which people lead, and in particular their freedom of choice in terms of achieving valued “function” such as being well – nourished, healthy, literate. This approach sees poverty as lack of human development which is reflected in the actual achievements of people, with regards to living long lives, being adequately nourished etc.
☼ Institution Centered approach :- This approach focus on the institutional arrangements which are in place, i.e. the rules which provide the enabling framework within which individuals and groups make choices and go about their daily business of making a living. The approach is is sensitive to consequences of institutions for poverty outcomes. The overriding goal of an institution center approach to poverty reduction of civil and political rights. This implies that a necessary condition and implementation is the existence of democratic governance.
ANTI-SOCIAL EXCLUSION POLICIES:-
The main policy arena in institutional approach to poverty reduction are macro-policies. These are policies which seeks to influence the relationship between macro-policies and individual outcomes. The basic assumption is that the outcomes of macro-policies and the pattern of growth depend on the social matrix within which policies are introduced and growth occurs. The central issue of policy design is how to change institutions so that poverty in the sense of well being is reduced.
In the institution centered approach founded on a social exclusion perspective, it is necessary to extend the scope of meso-policy analysis to production sectors. Industrial organization including for example relations between small-scales and large-scale enterprises, wage settings institutions agrarian institutions including linked credit and product market contracts, poverty rights systems, are important elements of a meso-policy.
ANTI-SOCIAL EXCLUSION POLICIES IN TANZANIA
Since independence in 1961, the government of Tanzania has had strategies to fight social exclusion or poverty; and it has been the nation main goal. In 1997, the government adopted the National poverty reduction strategy, which spells out a vision of society without abject poverty, and hence reduce social exclusion. This vision which is in line with International development goals (MDGS) remains as a point of reference for fighting social exclusion (Marginalization of the rural poor) or poverty.
The most important action document is the “poverty reduction strategy paper” (PRSP). The final draft was adopted in 2000, incorporating the views of stakeholders, with objectives and programs. Among adopted strategies are the MKUKUTA and MKURABITA.
CONCLUSION
Social exclusion, not only demise Citizens, to contribute potentially in bringing about their own economic development, but social exclusion can lead to social insecurity brought about by social inequalities, where the majority of the citizens lives in abject poverty. In a situation where fewer citizens are very rich and the majority are marginalized; the marginalized part of society tends to create hate rage as well as getting engaged in spontaneous crimes for example drugs abuse, high level robbery etc.
In order to avoid such situation and eliminate social exclusion a justice system must be in place. This includes system, which not only builds human capital but also socializes individuals as citizens; the right to access and owns tools of production for example land, capital are vital in creating a just society.
REFERENCE
International Institute for labor studies (IILS). Part tens and causes of social exclusion; ISBN 92 – 90014-587-0, Firstr published 1996.
http://WWW.ilo.org/public/english/bureu/inst/papers/synth/socex/index.htm
United Republic of Tanzania – interim poverty reduction strategy paper (PRSP) – Prepared by the Tanzania Authorities, March 14th 2000.
Internet, Microsoft ® Encrata ® Enclopedia 2004.
Saturday, November 8, 2008
PovertyConcept
INTRODUCTION
This paper document will envisage on explaining the meaning of poverty. The work will have four major areas of concern.
- The theoretical review of poverty concept
- Empirical review of poverty concept generally.
- Policy review – efforts, plans and programs being undertaken to alleviate poverty globally and in the Tanzania context.
- A conclusion based on the factors provided and personal views and comments.
THEORETICAL OR LITERATURE REVIEW
POVERTY THROUGHT HISTORY:- Poverty has been a concern in societies since before the beginning of recorded history. According to sociologists and anthropologists, social stratification the division of society into a hierarchy of wealth, power and status-was a defining characteristic of the earliest civilizations, including those of acient Egypt, summer in the Middle East and the Indus Valley of what is now India.
The rulers and other powerful or wealthy members of these civilizations frequently mistreated the poor, sometimes subjecting them to hard labor on enslaving them.
Babylonian Talmudic and early Christian writings from later times entreat people with resources and good fortune to relate to the poor with compassion.
As the powerful nations of western civilization become established, they codified relationships between the poor and non-poor into law, as was done in Babylonia (see of Hummurabi). The present-day welfare systems of the United Kingdom, the United States and Canada envolved from a 17th Century British legal act known commonly as the poor laws.
The rise of civilizations also led to stratifications among nations and territories around the glob. Powerful and wealthy nations maintained and increased their power and wealth and build empires by using the labor and resources of less powerful Regions.
This dynamic took a new form in the era of colonialism. Through two colonial period from the 15th Century to the early 19th Century to the mid 20th Century Countries in Western Europe and later United State and Japan laid claim to territories and created colonies, in Asia, Africa, and Latin America. These are areas where people still lived.
During the first period of colonialism, several western European Countries used their colonial territories to provide them with goods for consumption and trade. In the late 18th Century the Industrial revolution brought mechanized production to many nations; with increased in technology. Industrialized Countries could be able to produce larger quantities goods. To achieve this level of production they relied on colonies to provide raw materials the industrialized Countries and many of their people experienced increase in wealth and ease of essential needs, clothing food and shelter.
The colonies deprived of their resources continue to be more poor.
In other colonies were centers of slave trade. Many European Nations, set up outposts in Western Africa from which they shipped slaves to the colonies of Americas and Caribbean.
These Countries used slaves for free labor in their own land. Slaves suffered a total loss of home, land and livelihood.
The economies of the former colonies in Africa, Asia and Latin America began to change in the Mid 20th Century when they gained political independence. Most former colonies came to be known as developing Countries (Third World) the known as developing Countries (Third World) the home of the poorest people in the World.
CAUSES OF POVERTY: Many different factors have been cited to explain why poverty occurs. However no single explanation has gained universal acceptance. Seven Primary factors that may lead to poverty which includes:
(1) Overpopulation
(2) Unequal distribution of resources in the World economy.
(3) Inability to meet high standards of living and costs of living
(4) In adequate education and employment opportunities.
(5) Environmental degradation.
(6) Certain economic and demographic trends and
(7) Welfare incentives.
§ Over population:- Is a situation of having large numbers of people with too few resources and too little space. This situation is associated with poverty. Excessively high population densities put stress on available resources. For example, Bangladesh has the highest population in the World, with 938 persons per SQ KM. High rate contribute to over population in many developing Countries. Children are assets to many poor families, because they provide labor (Manual), usually for farming.
§ Unequal Distribution of resources:- Most of experts agrees that the legacy of slavery and colonialism accounts for much of the unequal distribution of resources in the World economy. In many developing Countries the problems of poverty are massive. Same social scientists argue that wealthier Nations continue to practice a form of colonialism known as Neo-colonialism. Developed or rich Nations have been able to get cheap raw materials and natural resources from poorer Countries for manufacturing Industrial goods which later sell at very high prices, (Unfair terms of Trade). The poor Nations has no Industries, so they continue to depend on imported Industrial goods.
§ High standard of living and costs of living: People in developed Nations may have more wealth and resources than those in developing Countries, their standard of living is also generally higher. Thus people who have what would be considered adequate wealth and resources in developing Countries may be considered poor in developed Countries.
§ Inadequate Education and Employment:
Illiteracy and lack of education are common in poor Countries often cannot afford
to provide for good public schools, especially in rural areas. Where as virtually
all children in Industrialization Countries have access to education.
Without education, most people cannot find income-generating work. Poor people also often forego schooling in order to concentrate on making a minimal living. In addition developing Countries tend to have few employment opportunities, especially for women when people do not have work, they do not make any money; thus high unemployment leads to high levels of poverty.
§ Environmental Degradation:- In many parts of the world, environmental degradation, the deterioration of the natural environment, including the atmosphere bodies of water, soil and forests, is an important cause of poverty. Environmental problems have led to shortages of food, clean water, materials for shelter and other essential resources. As forests, land, air, and water are degraded people suffers and poverty problems shoot to its peak.
§ Economic and demographic trends: Poverty in many developed Countries can be linked to economic trends. In the 1950s and 1960s for example, most people in the united states experienced strong income growth. However, between the early 1970s and the early 1990s typical incomes, adjusted for inflation grew little while the cost of living increased. Periods of economic recession tend to particularly affect young and less-educated people, who may have difficulty in finding jobs. Changes in labor markets in developed Countries have also contributed to increased level of poverty. The level of poverty also increase in the developed nations due to rising disparities in the distribution of resources. For example in 1970s, the poorest 20 percent of all U.S households have earned smaller percentage of the total national Income (generally less than 5 percent), while the richest 5 percent of households have earned greater percentage 45 percent of the total national income. Demographic shifts is also cited to contribute to overall poverty. For example the change of family structure; leading to a single parent status. Single parent families with children have a much more difficult time escaping poverty than do two families.
§ Individual Responsibility and Welfare dependency: There are differing beliefs about individual responsibility for poverty. Some people believes that poverty is part of society structure and inevitably in it there must be poor people. Other believes that poverty is an outcome of lack of the employment and education. Other people believes that poverty carries an element of personal responsibility. For example if people or a person voluntarily choose to use drugs which leads them to be poor, then they are to blame themselves. On the welfare Dependency factor, some people believes that these programs provide incentives for people to stay poor in order to continue receiving payments and other supports. This argument also suggest that welfare support, discourages work and Marriage. In the United states and other developed Countries getting a job results in reduced welfare support; the same is true when a single parent gets married.
§ Effects of poverty: Poverty has wide-ranging and often devastating effects. Many of its effects, such as poor nutrition and physical health problems, result directly from having too little income or too few resources. As a result of poor nutrition and health problems, infant mortality rates among the poor are higher than average; and life expectancy in lower than average. Other effects of poverty may includes infections disease mental illness and drug dependence. Some other effects of poverty may not easily be identified. For example extended hunger and lack of employment may lead to depression, which may sometimes to criminal behavior.
§ Long Term Effects of Poverty: People who grows up in poverty may experience life long problems. They are disadvantage in things such as education, because they have limited income and resources. All children need adequate nutrition and health care for good physical and mental development. Poor children are of malnourished and sick. Studies has shown that people who grow up in persistent poor households experience more difficulties throughout their lives than those raised in household with good income. In addition, poverty tends to perpetuate itself in many cases, those who had poor parents are poor themselves. They may also have learned a mindset that keeps them from getting out of poverty.
IMPERICAL REVIEW OF POVERTY
POVERTY: CURRENT GLOBAL ESTIMATES AND OUTLOOK
Poverty projections indicate that over the next 15 years the share of the population living in extreme poverty is expected to decline in all developing Regions. Over all poverty millennium development goals (NDG..) of reducing extreme poverty by 50 per cent from its 1990 level by 2015 will be achieved. At the global level, this means that by 2015, only 12 percent of the population in developing Countries will live on less than $1 a day or less, down from 29 percent in 1990. The sharp drop terms is only partially reflected in the absolute number of poor is expected to be 721 million in 2015 as compared to 1.2 billion in 1990 and 1.1 billion in 2002.
However, the decline in poverty across regions is highly uneven. For example in East Asia regions extreme poverty has already been halved. At the other extreme is Sub-saharan Africa where despite a 4.7 percentage point decline in the share of people in poverty in 1999 and 2004, some 36 percent of Africans will still be in extreme poverty by 2015 according to projections based the on latest data, this is far higher portion than MDG target of 23 percent. Further more, due to higher population growth absolute number of Africans living at or below the one dollar a day level, is projected to increase. And because per capital incomes elsewhere are projected to grow faster, the continent will continue to fall further behind the rest of the world, unless steps are taken to improve economic growth in Africa. The region now accounts for 30 percent of the world’s extreme poor, compared with 19 in 1990 only 11 percent of the in 1981.
In regions, the risk of falling short is even greater for the human development goals. In particular, on current trends, most regions will fall short of health related goals, including child and maternal mortality, the reversal of HIV/AIDS pandemic, and increased access to sanitation. Prospects are brighter in Education.
§ Poverty in Developing countries:- Many developing nations experience severe and widespread poverty, which often leads to disease epidemics, starvation and deaths. In the past few decades, millions of people have starved and died as a result of famine. For example in countries like Bangladesh, Ethiopia, Somalia , Sudan. Recently in 1998, almost one person in four (23 percent) residing in developing countries lived in less than $1 per day. Poverty in Most cases affects women, have low social status and are restricted in their access to both education and income generating work. They commonly depend on men for support, but often get little.
People who do not work such as young children the elderly and many people with disabilities depend on families and other support networks for basic necessities. However, neither poor families nor the governments of many developing countries ca adequately support the non working . Thus the poorest countries have high rates of child morbidity (diseases) and mortality. Children also have very low social status and often suffer from parental neglect and abuse because they are not considered important. Like women in may developing Countries , children may be exploited as prostitutes or as workers for little or no pay.
§ Poverty In Developed countries. The nature of poverty in the developed world differs greatly from that in the developing world. In developed countries, the majority of people commonly earn over 200 times the per capital income of the poorest developing countries. For this reason, developed nations usually measure the income lever of poverty as a portion of average income of as an amount below which a person or family cannot afford basic need, including housing for people with low or no income, poverty often takes the form of homelessness; those in less extreme poverty often live in substandard and sometimes dangerous housing. Many of the poor in developed countries are also exposed to high level of violence associated with drug dealing, child abuse and other bad crimes. The \united state has the highest rates of poverty compared to most of other developed countries.
§ A study of 16 developed nations conducted in the early 1990’s used a single measure of comparison: Poverty was defined as earning below half the median of all incomes. The result showed that about 19 percent of the U.S population lives in some degree of poverty. The rate were between 10 and 15 percent in Australia, Canada, Ireland, Japan, Spain and the United kingdom. Many of the other countries of Western Europe including Belgium, France, Germany, Italy, The Netherlands and Scandinavian countries (Finland, Norway and Sweden) all had poverty rates of between 5 and 8 percent. Poverty rates in some developed countries, including the United States and United Kingdom are higher among racial minorities. Indigenous people in developed countries tend to suffer from very high rates of poverty. In the United states, Many native Americans lives and work on economically depressed Native American reservations and experience high rate of joblessness and alcoholism. For example in Australia, many Aboriginal people live in similar conditions.
§ MEASURING POVERTY. Poverty can be measured in a variety of ways or options. Economists have traditionally chosen income as the basis for measuring and defining poverty but even that choice allows for a multitude of options. While no one measure is necessarily correct but some are better that others.
§ INTERNATIONAL MEASUREMENT. In international economics such as in statistics kept by the United Nations (UN) the measure of a country wealth is generally based on its gross domestic product (GDP). GDP measures the aggregates yearly monetary income of all of a country’s people and businesses. For the purpose of figuring poverty levels, GDP figures are usually calculated as GDP per capital.
If two countries have the same aggregate GDP, the one with a smaller population will have a higher GDP per capital. In the 1990s developed countries typically enjoyed average per capital incomes in excess of $15,000and of ten $20,000. At the other extreme, the poorest countries often had per capital income in Mozambique, one of the world poorest countries was about $100 at the end of 1990s.
NB: Levels of poverty also depend on how income and resources are distributed. Countries with
High GDPs can have low levels of poverty if people have relatively equal amounts of
Income and resources, such as in Scandinavia. On the other hand, countries with equally
high GDPs will have higher level of poverty if a few people have far more income and
resources than the rest. The united state is a good example.
§ GLOBAL – POLICY REVIEW UPON POVERTY.
National Government uses poverty measurements to develop programs that provide assistance to the poor. All developed countries have existence to the poor. All developed countries have existence antipoverty programs, primarily in the form of social security and welfare systems. And for most of developing countries the same forms of social security programs are in place. Nevertheless little has been achieved in getting people out of poverty. International organizations also use poverty measurement to decide how much money to give to national governments and how to advise Countries on strategies for reducing poverty.
FIGHTING POVERTY IN DEVELOPING COUNTRIES (Policy)
The Governments of most developing Countries provides limited assistance to prevent poverty. Most have minimum social security programs, which provide benefits during periods unemployment, illness, disability at retirement and to families of diseased workers. A variety of organizations, such as the UN, Aids agencies, non govemental organizations and private development banks, supports antipoverty programs in developing Countries.
Many international Govemental organizations have anti-poverty programs. These includes many regional organizations such as the organization of American states and the European Union, as well as the UN, which encompasses Countries around the World. The United Nations operates many of the largest antipoverty programs through its agencies. Other UN agencies involved in alleviating poverty in the developing world include the United Nations Children’s fund which
provides food, medicine and education programs for children worldwide and the United Nations food and Agriculture organization, which supports increased agricultural productivity and improve food distribution and nutrition.
(Reviewed by Thomas J. Corbett)
Microsoft ® Encarta ® Enyclopedia 2004 (c) 1993 – 2003 Microsoft cooperation.
FIGHTING POVERTY – GLOBAL EFFORTS (POLICY)
Against this backdrop, and with less than 10 years to 2015, achieving the goals is a huge challenge, which calls for a concerted effort by developing and developed countries. actions are needed in the following Areas:-
(i) Anchoring efforts to achieve the MDGS in Country led development strategies is central to coherent and effective scaling up of development progress. Framed against a long-term development vision, these strategies should set medium-term targets tailored to Country circumstances for progress toward the MDGS and related development outcomes and they should define clear national plans and priority in achieving those targets, linking policy agendas to medium-term fiscal frame works of August 2007. 54 low-income Countries had prepared reduction strategies.
To improve the effectiveness of its support, the world Bank aligns its activities to
these National plans through Country assistance strategies. The National strategies
also serve as a basis for harmonization with other development.
(ii) Aids effectiveness can be increased by strengthening the Country-driven development model. In March 2005 developing Countries and donors committed to the Paris Declaration on Aid effectiveness. Months later, at Gleneagles donors reaffirmed their commitment to scaling up aids to help meet the millennium development Goals, starting that this would amount to doubling of development to Africa by 2010.
For this aid to translate to poverty reduction, close attention must be paid to the
quality of aid. The Country-based development model comprises of three principal
results-oriented development strategies which rely on strengthened domestic
institutions. Pillar two is base on donor alignment behind Country strategies to
deliver timely and predictable assistance in a way which reinforces, rather than strains
these institutions pillar, three encompasses the mechanisms of mutual accountability
which ensure what both national governments and donors are responsible for meeting
their commitments to Country-based development. Progress under the three pillars
for Country-based development model indicates that the scaling up of aid is feasible
in variety of contexts.
(From WWW.worldbank.org/poverty), up-to-date September 2007.
(iii) Shared growth is key to poverty reducing reduction:
Growth although extremely important, does not explain all the variation in poverty
reduction. Frequently affects the pace at which growth is translated into poverty reduction. Growth is less efficient in lowering poverty levels in Countries with high inequality or Countries where the distribution pattern of growth favor the non-poor
(see WWW.workldbank.org/poverty) up to date September 2007.
EFFORTS IN FIGHTING POVERTY – TANZANIA RESPOND – POLICY
Since independence in 1961, we Government of Tanzania has had poverty reduction as its main goal. In 1997, the government adopted the National poverty eradication strategy, which spells out a vision of a society without abject poverty, and with-improved social conditions. This vision which in line with the International development Goals (MDGS) remains a point of reference for current poverty actions.
The most important action document is the “Poverty Reduction strategy paper. A committee of Ministers and the governor of the Bank of Tanzania has been established to steer the preparation of the PRSP. The committee began its work in mid-October 1999. The national workshop to discuss draft of PRSP was held in June 2000. Final draft incorporating the views of stakeholders, with objectives and program priorities is in targeted in the budget in July 2000.
(see WWW.imf.org/external/NP/prsp/2000/tz/01/INDEX.HTM)
CONCLUSION:
Historically, there has been a general tendency to approach development as a process of acquiring and using Western-style systems, standards, expertise and problem solving methods, resources, Capital, technology and so on. Obviously, this approach is problematic because there is move to development than looking outward for solutions of a country’s or society’s problems. Sustainable development should be homegrown and not something that is easily exported or imported from one place to another. The poor nations, Tanzania included, must realize that their underdevelopment (poverty) would never be solved by non-stakeholders. Hence the poor nations should not rely 100percent to such external actors like IMF the World Bank. To deal effectively with poverty and Underdevelopment, grass root efforts are required These include; (i) Good domestic leadership (ii) Commitment of the poor people themselves to cooperate and work together towards attainment of their own development. This entails active citizenship of the ordinary citizen to fully participate in the design and implementation of policies, programs and projects that affect them.
Over-dependent has to the large extend brought a pull-back in terms of improving the living standards of most the African societies; Tanzania included. Economic and social conditions have deteriorated in many African countries that it is not unusual to find older people arguing that life during the colonial period was actually much better .
REFERENCE:
1. OKECHUKWU UKAGA OSITIG AFOAKU – STSTAINABLE DEVELOPMENTIN AFRICA, AFRICA WORLD PRESS, INC (2005), P.OBOX 48 ASMARA ERITREA.
2. UNITED REPABLIC OF TANZANIA – INTERIM POVERTY REDUCTION STRATEGY PAPER (PRSP) – PREPARED BY THE TANZANIA AUTHORITIES MARCH 14th 2000.
3. INTERNET; WEB WORLDBANK.ORG/WBSITE/EXTERNAL/NEWS/O; 29/10/2007.
4. INTERNET;MICROSOFT (R) ENCARTA (R)ENCYCLOPEDIA 2004
5. THE UNITED REPUBLIC OF TANZANIA A PRESIDENT OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT. THE OPPORTUNIES AND OBSTACLES TO DEVELOPMENT – A COMMUNITY PARTICIPATORY METHODOLOGY HAND BOOK – BOX 1923 DODOMA APRIL 2004.
INTRODUCTION:
This research paper will examine on sustainable Agricultural development in Tanzania in relation to community economic development the research work will focus on providing”
- Some theoretical definitions of key terms and concepts, before getting into the analytical part.
- A brief literature review on past agricultural practices in Tanzania.
- Literature on current Agricultural development practices in Tanzania and challenges to sustainable agricultural development in Tanzania.
- Guiding policies for sustainable agricultural development in Tanzania and ways to address the factors which hinders sustainable agricultural development in Tanzania.
- Conclusion - Basing on lessons learned and my own opinions.
DEFINITION OF KEY TERMS AND CONCEPTS:
SUSTAINABLE AGRICULTURE: Sustainable agriculture refers to the ability of a farm to produce food indefinitely, without causing irreversible damage to ecosystem health. Two key issue are; biophysical (the long-term effects of various practices on soil properties and process essential for crop productivity); the other is social-economic (the long-term ability of farmers to obtain inputs and manage resources such as labor). Sustainable agriculture integrates three main goals (i) Environmental stewardship, (ii) Farm profitability and (iii) Prosperous farming communities. These goals have been defined by a variety of disciplines and may be looked at from the vantage point of the farmer and consumer.
Two of the many possible practices of sustainable agriculture are:-
(i) Crop rotation and
(ii) Soil amendment, both designed to ensure that crops being cultivated can obtain the necessary nutrients for health growth. In practice, there is no single approach to sustainable agriculture, as the precise method. (From: Wikipedia, the free encyclopedia).
COMMUNITY: A community is a social group sharing an environment, in one geographical area, with shared interests, goals, beliefs, resources, preferences needs and number of many other conditions may be present and common (From: Wikipedia; the free encyclopedia).
ECONOMIC DEVELOPMENT:- From the academic and institutional approaches; economic development can be seen as a complex multidimensional concept; involving improvements of human well being.
Professor Dudley Seers argues that development is about outcomes that can be seen through reduction and elimination of poverty; inequality, and unemployment, within a certain community.
COMMUNITY ECONOMIC DEVELOPMENT (CED):
Community economic development is local action to create economic opportunities (From the Canadian economic development network in 2003). The British Colombia working group on CED, 1991; Community directed process that explicitly combines social and economic and it is directed towards fostering the economic, social, ecological and cultural well being of communities.
REVIEW LITRATURE OF PAST SUSTAINABLE AGRICULTURAL DEVELOPMENT PRACTICES IN TANZANIA
In Tanzania agriculture remained largely traditional and subsistence oriented. It has been so before the colonial era, during the colonial era and even after attainment of independence from the colonizers. Before the colonial era farming was purely traditional, whereby traditional crops and life stock for a substance living was the order of the day. During the colonial era, farmers were pushed to produce crops that are recognized as raw materials in European Industries. A significant amount of quality land was devoted to cash crops to meet external colonial desires instead of using it to produce food for the local population. Many traditional crops and animals useful to the local people and compatible to local environment were displaced by colonial rules. In most cases quality land was confiscated from the indigenous people and given to white farmers and converted to plantations; to produce raw materials to serve the foreign Industries. As a result Tanzania like other many African Countries found itself providing cheap raw-materials to foreign Industries and markets for expensive foreign industrial goods. Due to this nature of agriculture the local people are left without enough food and poor state life. After independence 1961 to date; more than forty years, the state of agricultural has little improvement due to a variety of factors. The most affecting factors are:
(i) The rate of population growth is very high in relation to farm output.
(ii) Continued use of traditional farming methods
(iii) Poor Infrastructure.
The government since independence has bee putting much efforts to ensure a sustainable agriculture development as agriculture is central and a major mainstay of more than 80% of the country population, and it accounts for about 50% of the Gross Domestic product and more than 75% of the foreign exchange earnings.
IMPERICAL REVIEW – FOR SUSTAINABLE AGRICULTURAL DEVELOPMENT IN TANZANIA
The Agricultural sector has maintained a steady annual rate of over 3 per cent during the last decade. This is greater than the rate of total population growth of 2.9 percent, so there has been a small but steady increase in annual per capital agricultural output. However, given the importance of agriculture as the mainstay of rural livelihoods, agriculture must grow much faster if rural poverty reduction (community Economic Development) is to become a reality in Tanzania. The recurrent budget allocations to the sector for the past years shows that there is gradual increase in overall funding from Us $ 36.94 million for 2002/03 to Us $ 55.92 million in 2003/04 and to Us $ 59.84 million in 2004/05. These figures do into take into account inflation.
Apart from the recurrent budget allocations to the Agricultural sector; the government also brought forward what is called Agricultural Sector Development Strategy (ASDS). The objective of the ASDS is to create an enabling rural poverty and for ensuring household food security. Based on 2002 household Budget surveys the specific agricultural sector growth targets are:
(i) Reducing the rural population below the basic poverty line from 38.7 percent in 2000/01 to 20.4 percent in 2010
(ii) Reducing the percentage of rural food – poor people from the current 20.4 percent to 11.6 percent in 2010 and
(iii) Achieving a growth rate in Agriculture of at least 5 percent in 2003.
The ASDS provides guidance for future interventions. First it focuses on productive and gainful agriculture. Substance Agriculture must become profitable smallholder agriculture.
(UNITED REPUBLIC OF TANZANIA) AGRICULTURAL SECTOR DEVELOPMENT PROGRAMME –DOCUMENT (2003)
CHALLENGES TO SUSTAINABLE AGRICULTURAL DEVELOPMENT IN TANZANIA
The challenges to agriculture are many diverse and complex, no single factor is solely responsible. Four major factors can be cited:
(i) Natural factors
(ii) Structural factors
(iii) Social and political factors and
(iv) External factors
(i) NATURAL FACTORS:- Agriculture in Tanzania like many other African Countries
is pronominally rain fed and therefore vulnerable to drought. Rains are generally
Unpredictable and sometimes scanty. A part from being unpredictable and scanty
sometimes irregular patterns are experienced eg. Eli-nino rains of 1997. These types
of rains leads to deterioration of soil structure with consequence loss of nutrients and
increased erosion. Also when rains are so forceful associated with foods, it displace a large number of people thereby aggravating the agricultural problems as well as the supply and distribution of food. In this cases sustainability in agricultural development becomes unrealistic and in turn hampered community economic development.
(ii) STRUCTUAL FACTORS:- Agricultural sector in Tanzania lack adequate infrastructure for production, storage, processing, marketing and distribution. Poor transportation system and bad roads makes it difficult for farmers to get inputs and their produce out of their farms. Incomes tends to be relatively low in areas with poor access roads. This lack of infrastructure has hampered Agricultural development. Further move many farmers are not skillful in strategic marketing, they tend to focus on production first and worry later. In most cases buyers are the one who dictate prices of produce.
(iii) SOCIAL AND POLITICAL FACTORS:- Social and political problems such as poverty, corruption, inter-ethnic conflicts and civil wars also helps to impede sustainable agricultural development. In Tanzania poverty be the biggest hindering problem forwards sustainable Agricultural development. The majority of Tanzania farmers are small holds farmers able only to produce little their survival (subsistence living) and no surplus. In most cases this has been due to poverty, in ability to acquire big capital and other agricultural inputs. Modernized agriculture and modern agricultural techniques lids to high productivity (Huge surplus). Very unfortunate since independence to date a great majority of Tanzania farmers are still applying the traditional methods of farming. The use of hand hoe, poor quality seeds and poor farming techniques; is the order of the day. The government should extend resources to the rural peasants and empower them to acquire agricultural inputs and provide them with modern agricultural techniques, through extension workers.
Another threatening factor affecting sustainable agricultural development in Tanzania is human diseases. Diseases such as HIV/AIDS, Malaria, Water born diseases are imposing a big pullback in agricultural development, by reducing the labor resource (Oxfam, 2002). In Tanzania HIV/AIDS pandemic has been declared a national disaster. The government, local institutions, non-governmental organizations, society groups, together launching educational campaigns to combat the HIV/AIDS pandemic. The HIV/AIDS largely undermines the agricultural sector in many ways. Decline in agricultural productivity caused by HIV/AIDS by limiting the availability of time labor and financial resources, necessary to maintain agricultural sector. Impact on labor-labor shortage due to family members taking time off to care for the victim.
Diseases like Malaria and HIV/AIDS are taking the lead in Tanzania claiming a lot of lives and reducing the labor resource and bring a negative effect on sustainable agricultural development and in turn aggravated poverty to the large majority of Tanzanian communities.
EXTERNAL FACTORS:- Tanzania being one of the poorest Countries of the world, in the African continent one of the least developed continents in the departure of the colonizers continues to suffer with poverty and economic stagnation. This has been brought about mainly by unfair economic and trade practices between the rich and the poor. The rich Countries through the Breton wood institutions (World Bank, and IMF) continue to pressurize the poor Countries to open their markets and remove barriers for the favorable penetration of manufactured goods from the west. While in the other hand the western Countries continue to maintain high tariffs and maintain huge subsides in favor of their economies and trade. The subsidies which the rich Countries put into their agriculture sector are almost equal to the total debt burden of Africa; (According to N. stern of the world Bank Research). It shows agricultural subsides in rich Countries is about 300 Billion U.S Dollars a year. This suppressive world prices especially third world exports, Tanzania included. Because Tanzania depends largely on Agricultural outputs especially cash crops for her export earnings, for years the Country economic growth which depends largely on Agricultural sector about 60% has not attained any significant achievement for years. There have been loud voices throughout the world to bring about fair world trade but little or nothing has been achieved. In this perspective the question of sustainable Agricultural development in Tanzania has a log way to go, and will continue to have negative impact on community economic development.
ADDRESSING THE CHALLENGES – TOWARDS SUSTAINABLE AGRICULTURE DEVELOPMENT IN TANZANIA .
To address the challenges, comprehensive and integrated efforts of both players are needed, in fostering sustainable Agricultural Development in Tanzania. The players should includes farmers, policy makers, academicians, civil societies (e.g Cooperatives), agribusiness and international organizations. Foremost and above all the government must give Agriculture the priority encourage farmers and peasants, by providing them with subsidized farming inputs and ensuring stable and fair prices for their produce.
In Tanzania the following hindering factors has to be addressed:-
(i) YIELD AND PRODUCTIVITY:- To successfully increase yields and productivity and farming practices such as intensive agriculture, excessive nutrients mining in form of harvest cultivating marginal lands and so on, tend to deplete the soil and degrade the environment. To sustainability increase yield therefore; such environment degradation must be minimized and compensated through proper resource management and rejuvenation of land. Sustainable options for increasing yields should include appropriate use of inputs (eg.; fertilizers, improved animal and crop varieties). With a view to optimizing rather than maximizing yield and productivity. It is always pertinent to note that the main natural factor limiting agricultural productivity in many parts of Tanzania is scarcity and poor distribution of rainfall, which means that irrigation is also key in certain areas where there is adequate water to raise agricultural productivity.
(ii) PESTS AND DISEASES:- Concerted efforts at the local, national and international levels are needed to eradicate major diseases and pests; such as Rift Valley Fever in Tanzania and Kenya. It would not been possible for farmers themselves to combat the problems without concerted efforts of both government, farmers and even international organizations or institutions. At the farmer level, the direct effects of agricultural diversity on the prevalence of pests and diseases are very important. For example a diverse and well balanced agricultural environment not only discourages pests and diseases, but also enables crops and animal within such environments to be healthier and better able to withstand attacks.
(iii) INPUTS AND SERVICES:- The Tanzania government must use a variety of schemes to improve farmers access to supplies and services that are necessary to smooth and for the time being has schemes to support rural marketing and finance institutions, such as local savings and credit cooperatives (SACCOS) and village cooperatives Banks (VICOBA) and loan groups, production and marketing Cooperatives, these government efforts will promote access to inputs, and improvement of farmers markets and help them to overcome risks inherent in agriculture. However while the government can play an important role in promoting such schemes the private sector should always be allowed and encouraged to initiate or take over these efforts this is important because the private sector tends to be more efficient and realistic. Further these initiatives must be developed from the bottom-up approach, basing on the peoples need and managed in participatory fashion with transparency, accountability, efficiently and effectiveness for the benefit and success of the farmers. A participatory bottom-up approach, would help ensure that farmers needs are fully understood and their input, cooperation and ownership secured for sustainable community economic development.
(iv) DROUGHT AND FLOODS:- In Tanzania, draught and floods in many parts of the Country has led to poor yield and productivity as well as displacement of people and their resources, together with damaging roads and hamper access to food and other supplies. These natural factors had negative impacts on sustainable Agricultural development. The government should set up strategies to mitigate these disasters. Such strategies are for example:
- Instituting national and Regional systems for detecting early warning signs of impeding disasters, as well as effective mechanism for dealing with them before things get out of control.
- Establishing affordable irrigation facilities as treadle pumps and in Tanzania money maker pumps.
- Catching the infrequent rains in man made furrows that force the water into the soil rather than letting it run off in flash floods that leaves the soil dry eroded.
- Using drip irrigation technology to efficiently target watering of crops.
- Promoting better in field water management for the dual purpose of making efficient use of water in dry conditions and mitigating flood damage in cases of heavy rains.
All the above mitigating efforts to drought and floods disasters can bring about positive results in sustainable Agricultural development and in turn Community economic development.
(v) SOIL FERTILITY:- Tanzania is faced with poor soil fertility due to poor farming methods
accelerated erosion and soil degradation caused by overgrazing uncovered land, deforestation and poor tillage techniques, as well as inappropriate use of fertilizers. If soil fertility continues to be depleted, the end result is low yields and poor productivity which leads to poor Agricultural development and in turn low level of Community economic development. Farmers and peasants must be encouraged to utilize locally appropriate cost-effective and easy to implement approaches agriculture production such approaches are like the use of mulching, minimum tillage, agro-forestry and many others which guards the biophysical loss of soil fertility.
GUIDING AGRICULTURAL DEVELOPMENT POLICIES CURRENTLY IN PLACE (TANZANIA)
The evaluation Agricultural policy in Tanzania has been strongly influenced by changing Macro-economic policies. The post-independence period (1961 – 1967) was marked by an emphasis on improved peasant farming through extensions services and provision of credit and marketing structures at the sometime the government continues to support large-scale farming in selected areas. Following the Arusha declaration (1967) the government became the manager and investor in virtually all sectors, including agriculture. Most large-scale estates were nationalized. Collective farming was promoted and systems of national pricing of agricultural produce were established. By the mid-eighties the government adopted to move production, processing and marketing functions away from public sector. This process is still underway. The government now retains responsibility for policy, the regulations and maintenance of law and order. Inevitably, there has been a need to redefine sectoral policies to support this macro-economic reforms agenda. This has resulted in the agricultural and livestock policy of 1997; simultaneously a new approach to rural development, which focuses on decentralization and empowering local communities and local government authorities (LGA) has been developed. The macro-economic reforms that started during the mid-eighties have yielded steady agricultural sector growth. Nonetheless, there are many challenges that still need to be overcome to accelerate growth and reduce rural poverty. The Tanzania development vision (TDV) 2025 provides guidance on national long-term strategic goals for social and economic development and highlights the change in approach and mindset needed to get there. It envisages in raising the living standards of Tanzania communities, especially farmers. This will achieved through increased productivity and investments in human capital, which are central themes of the ASDP – Agricultural sector development programme. The poverty reduction strategy paper, (PSRP) which was approved in 2000, priority to agriculture and rural development and targets poverty reduction as the central goal of national development. Subsequently, the rural development strategy (RDS) and the agricultural sector development strategy the government’s approach in 2001, have redefined the government’s approach in these areas.
LEADING AGRICULTURAL SECTOR POLICIES AND STRATEGIES:-
There has been considerable recent evolution in public relating to agricultural sector. Some of the most important are summarized bellow:-
(i) The agricultural and livestock policy of 1997:-
entails the following:
* Liberalization of agricultural markets and removal of state monopolies in the export and
import of agricultural goods and produce.
* Clear definition of the roles of government and the private sector in the production and
position of support services.
* Government responsibility of Industry regulation through commodity boards.
* Emphasis on food security at the national and household levels as opposed to national and
household levels as opposed to national food self-sufficiency.
(ii) The cooperative development policy of 1997 is intended to:-
* Provide a framework for the structured cooperatives to operates on the basis of independent,
voluntary and economically viable principles of good management.
(iii) The local government reform programme; of 1998:- The main strategy is
decentralization. The move from centrally planned agriculture locally planned agriculture is
one of the key strategic pillars of ASDP.
(iv) The land policy of 1995:- This provided the basis for the land and village land acts of
1999. This provides the framework for stronger local control of land resources, especially
by villagers; and establishes the basis of more effective land market.
(v) The micro-finance policy of 200…:- Intended to establish a basis for efficient and effective
micro-financial system in the Country that serves the low-income segment of the society;
therefore contribute to economic growth and poverty reduction.
(vi) Rural development strategy of 2001:- This focuses on stimulating economic growth and
poverty reduction in the rural areas; through good governance, social justice and
intervention to promote shared growth and poverty reduction in the rural areas; through
good governance, social justice and intervention to promote shared growth in rural and
urban areas; as well as increasing access to services and inputs.
(vii) The agricultural sector development strategy (ASDS) of 2001:- I s builds on the
Agricultural and Livestock, and cooperative development policies. ASDS is important
because,
* It targets improvements in farm incomes, upon which the majority of the rural population
depend which the majority of the rural population depend this is principal in rural poverty
reduction.
* It emphasizes availability and access to food, and thus advances food security.
* It provides a comprehensive, sector-wide programme for Agricultural development which is
key to national economic development.
(viii) The small and medium enterprise policy 2002:- This policy aims to promote income-
generating activities and support diversification of private sector activities. In the context
of the Agricultural sector, this includes the development of commercial opportunities in
marketing and processing agricultural produce.
NB: New policies and strategies in the rural sector offer a new focus on productivity, cular ASDS, objective is to create an enabling environmental for improving agricultural productivity and profitability. In particular ASDS, objective is to create an enabling environment for improving Agricultural productivity and profitability, improving farm incomes reducing rural poverty and ensuring house hold food security.
Specific sector growth targets for agriculture that will contribute to achieve the poverty reduction strategy targets are:-
(a) Reducing percentage of the rural population below basic poverty line from 38.7 percent in 2001/01 to 20.4 percent in 2010.
(b) Reducing the of rural food-poor people from 20.4 percent in 2010.
(c) Growth rate in agriculture of at least 3.4 percent in 2000 to 5 percent by 2003.
CONCLUSION:
Well articulated policies, strategies and programmes formulated by experts and professionals has been a common tradition in trying to look for the correct therapy in addressing economic stagnation and eradication of abject poverty in the Tanzania community and in the developing countries. For a number of decades now these policies, strategies and programmes were imposed to the rural and urban people without their full knowledge and participation, as a result little outcomes in terms of solving their problems had always been realized. The recently different approach of bottom-up methodology should be more emphasized and applied in all plans aimed at community economic development. The government also should give top priority to the Agricultural development sector in terms of budgets allocation. “Because of the importance of agriculture in our development, one would expect that agriculture and the needs of the Agricultural producers would be the beginning and the central reference point of all our economy planning. Instead we have treated agriculture as if it was something peripheral, or just another activity in the Country, to be treated on a par with all the others and used by the others without having any special claim upon them……we are neglecting Agriculture. If we were not, every Ministry without exception and every parastatal and every party meetings would be working on the direct and indirect needs of the agricultural producers…we must now stop this neglect of Agriculture. We must now give it the central place in all our development planning. For agriculture is indeed the foundation of all our progress” (By President JULIUS K. Nyerere 20/10/1982).
REFERENCE:
1. OKECHUKWU UKAGA AND OSITA G. AFOAKU; SUSTAINABLE DEVELOPMENT IN AFRICA; AFRICA WORLD PRESS, INC. P.O.BOX 48 ASMARA, ERIT, 2005
2. UNITED REPUBLIC OF TANZANIA, AGRICULTURAL SECTOR DEVELOPMENT PROGRAMME FRAME WORK AND PROCESS DOCUMENT – FINAL DRAFT MARCH 2005.
3. THE UNITED REPUBLIC OF TANZANIA; MINISTRY OF AGRICULTURAL CY OF TANZANIA MINISTRY OF AGRICULTURE MARCH 31st 1983; PRINTED BY THE GOVERNMENT PRINTER, DAR ES SALAAM - TANZANIA.
4. INTERNET; FROM WIKIPEDIA THE FREE ENCYCLOPEDIA; - SUSTAINABLE AGRICULTURE.
5. UNITED REPUBLIC OF TANZANIA; INTERIM POVERTY REPDUCTION STRATEGY PAPER (PRSP); PREPARED BY THE TANZANIA AUTHORITIES MARCH 14th 2000.
6. THE UNITED REPUBLIC OF TANZANIA, PRESIDENT’S OFFICE; REGINAL ADMINISTRATION AND LOCAL GORVENMENT; A PARTICIPATORY PLANNING METHODOLOGY, HAND BOOK. P.O.BOX 1923 DODOMA; APRIL 2004.
7. I LIVINGSTONE AND H.W. ORD; ECONOMICS FOR EASTERN AFRICA (REVISED AND ENLARGED EDITOIN) (1980), HEINEMANN NAIROBI.
8. NORMAN HUDSON; SOIL CONSERVATION (1985), PRINTED BY DETESIONS PRINTERS LTD. G. BRITAIN.
9. THE UNITED REPUBLIC OF TANZANIA, COOPERATIVE DEVELOPMENT POLICY, 2002; GOVERNMENT PRINTERS DAR-ES SALAAM TANZANIA.
10. JEFFERY SACHS-FOREWORD BY BONO; THE END OF POVERTY, HOW WE CAN MAKE IT HAPPEN IN OUR LIFETIME, PRINTED IN ENGLAND BY CLAYS LTD, ST. IVES PLC; 2005
CASE STUDY
TO: THE MANAGING DIREDTOR CED LIMITED
FROM: JANE JULIUS MANAGEMENT CONSULTANCY FIRM
DEAR SIR/ MADAM
REF: A REPORT ON THE BENEFITS OF MANAGEMENT ACCOUNTING SYSTEM FOR CED LIMITED; AND PROBLEMS INHERENT IN QUANTIFYING BENEFITS
INTRODUCTION:- The definition of management accounting system:
Management Accounting is concerned with the provisions and use of accounting information to managers within organizations to provide them with the basis in making informed business decisions that would allow them to be better equipped in their management and control functions unlike financial Accountancy information (which for the most part, is public information), management accounting information is used within an organization (typically for decision – making) and is usually confidential and access to which is only available to a selected few.
According to the chartered Institute of Management Accountants (CIMA) Management Accounting is “the process of identification measurement, accumulation, analysis, preparation, interpretation and communication of information used by management to plan evaluate and control within an entity and to ensure appropriate use of and accountability for its resources. Management Accountability also comprises the preparation of financial reports for non management groups such as shareholders, creditors, regulatory agencies and tax authorities.
THE MANAGEMENT ACCOUNTING SYSTEM IS AN AIDING TOOL IN THE CONTROL FUNCTION OF MANAGEMENT
The management function of control ensures that the events and activities occurring within the organization are conforming to plans. A variety of controls are designed to evaluate the performance of different segments of the organization and over different periods of time (long term and short term). Specifically management will require information on the efficiency with which resources are being used in the many operations of the organization particularly the manufacturing, marketing, and administrative activities.
The control function at this operational level is closely associated with the management accounting system.
RULES OR CONVENTIONS OF MANAGEMENT ACCOUNTING
The rules or conventions; guides of a management Accountant in performing his duties. The rules are as follows: -
1. Accounting concerns itself with the recording of business transactions
2. As far as possible costs and revenues should be properly matched.
3. Profits should be credited on realization basis while losses should be provided in advance
4. The methods, procedures and principle should be consistent
5. The principle of matching costs with revenues should be strictly followed.
6. The accounting records should be kept as objective as possible.
7. The entire accounting information past, present, or future, in any form should be designed to meet the particular needs of the business.
8. The principles of reporting of exceptions should be followed when presenting information to the management.
9. The object of “Control at source accounting” should be followed. It means that the control mechanism should be established at the points where costs are incurred.
10. a profit cannot be said to be earned unless the capital employed is maintained intact in real terms.
11. For measuring the efficiency of business, techniques of measuring the return on capital employed should be adopted.
12. The management information should be fully integrated,
13. Overall costs should be apportioned to the costs be apportioned to the costs centers and recovered by products.
BENEFITS OF MANAGEMENT ACCOUNTING SYSTEM FOR CED LIMITED
In the present complex macro-economic environment, management accounting has become an integral part of management It guides and advises management at every step.
THE ADVANTAGESS OF MANAGEMENT ACCOUNTING SYSTEM:
It increases the efficiency of various business functions. The targets of different departments are fixed in advance. The achievement of these goals is a tool for measuring their efficiency.
The activities of the organization are planned in a systematic manner, various operations ca be planned with the help of accounting information budgeting and forecasting.
The different tools of management accounting have provided validity, objectivity, and reliability in business management.
Different techniques of management accounting help in effective control for business operations. The maximum utilization of capital, and maximum return on capital invested in business becomes feasible through application of accounting techniques.
It creates harmony in the relationship between the management to improve its service to its customers.
The management aims to control the costs of production and at the same time increase the efficiency of employees. When the cost of production is reduced, it will increase the profit.
The business gets rid of seasonal and cyclical fluctuations on account of the use of management accounting.
Unacceptable standards or sub standards which are often responsible for unhealthy and bad relations between management and employees, ca be removed by the use of management accounting. There arises improved and healthy relationship.
The use of management accounting helps to control of even eliminates various types of wastages production defectives etc.
Management accounting helps in communicating updated information to various parties interested in successful working of the business organization.
THE FUCTION OF CONTROL AS THE CENTRAL CORE OF MANAGEMENT ACCOUNTING
A greater part of management Accounting system is directed to the control function of management. The purpose of management function of control is to ensure that the events and activities occurring within the organization are conforming to plans. Plans leads to outcomes, and outcomes carries a quantitative and qualitative elements. Most of the events and the activities can either be measured quantitatively or qualitatively.
PROBLEMS INHERENT IN QUANTIFYING BENEFITS OF MANAGENTS ACCOUNTING SYSTEM.
No standards measurements are in place to measure non physical things like morale of employees good image derived from customers or general public etc.
Management accounting is recent discipline and therefore, it is in the process of development, hence it has few techniques to apply to measure some of quantitative and qualitative benefits.
NGOs ACT OF 2002 (QST NO. 6)
DEFINITION: Non-governmental organizations (NGOs) have bee defined by the worlds Bank as “Private organizations, that have activities to relief suffering, promote the interests of the poor protect the environment, provide basic social and undertake community development NGOs can be local, national or international. NGOs has contributed much in the development of communities. NGOs activities can be local national or international; NGOs are important partners of governments in bringing about development.
CRITICAL REVIEW OF TANZANIA NGOs ACT OF 2002 (WHETHER THE ACT HAS ADEQUATELY EXPRESSED THE FINANCIAL MATTERS)
By reading through the Tanzania NGOs Act of 2002, very little has been put forward to elaborate how the NGOs will handle their finances in terms of accountability and types of financial reports they should produce: the following are sections of the act which in one way or another deals with the issues of finances.
With Reference to section 32 of NGO Act 2002 Fund – Raising Activities:- It states that the NGO registered under this act shall be entitled to engage in legally acceptable fund raising activities.
Weaknesses of this section:-
a) The act did not mention the type of legal or illegal fund raising activities.
b) It does not stipulate which type of currency to be used to raise funds.
c) The section does not show where the funds raised be deposited i.e. in local banks or in foreign banks.
d) The section also did not state anything regarding how the fund raised should be spend.
Section 29: A of NGOs Act 2002: Each Non governmental organization shall for every calendar year prepare a report of its activities. Which shall be made available ………………….
This section has the following weaknesses:-
a) The act is silent on the feedback from the stakeholder.
b) Format for reporting is not mentioned by this necessary for the purpose of control and uniformity.
c) The section is also silent of material requirements by various stakeholders, such as public board etc.
Section 29 B of NGOs Act 2002: Prepare annual audit report and submit copies thereof to council and board.
This section has the following weaknesses:-
a) The act did not mention the type of auditors i.e. external or both
b) The act did not provide for the access by the public to the access by the public to the audited report
c) The act also is silent on the contents of the audited report.
d) The act does not provide mandate to the board to organize financial audit incase they are not satisfied by the audited report. Neither the act do not mention types of books of accounts to be maintained by NGOs, or types of activities which can not be quantified e.g. volunteering services etc.
CONCLUSION:
The Tanzania NGOs Act of 2002, needs to be revised in order to fill gaps which seems to be not fully stipulated in the current Act..
The following major areas are to be revised and fully elaborated.
a) The definition of NGOs should be provided in its broader sense, and the types of NGOs relevant to this act.
b) Type and capacity of the people managing the NGOs, this is in a bid to safeguard the sustainability of the NGOs.
c) Relevant Accounting systems, standards and formats.
d) Objective Based funds raising e.g. “Chama cha Madaktari Wanawake Tanzania” they raised funds specifically to treat women who are suffering from breast cancer. In general the Tanzania NGO Act 2002 desires much more analysis in all its sections, in order to broaden its long term vision and to provide the NGOs more accountabilities and responsibilities, to bring about realistic community economic development
REFERENCE
1. Calvin Angler (1988), management accounting; The Maple- Vail book manufacturing group ISBN 0-256 – 06986 -7
2. Bagavathi R.S.N Pillai, (2005), Management accounting, Rajendra Ravindrai Printers (PVt
Ltd) 1st edition
3. Carrick Martin; An Introduction to Accounting; third edition, Negraw – Hill book company
syduey - 1990
4. Tanzania NGO Act 20025. Internet – Google (The free Diction
This paper document will envisage on explaining the meaning of poverty. The work will have four major areas of concern.
- The theoretical review of poverty concept
- Empirical review of poverty concept generally.
- Policy review – efforts, plans and programs being undertaken to alleviate poverty globally and in the Tanzania context.
- A conclusion based on the factors provided and personal views and comments.
THEORETICAL OR LITERATURE REVIEW
POVERTY THROUGHT HISTORY:- Poverty has been a concern in societies since before the beginning of recorded history. According to sociologists and anthropologists, social stratification the division of society into a hierarchy of wealth, power and status-was a defining characteristic of the earliest civilizations, including those of acient Egypt, summer in the Middle East and the Indus Valley of what is now India.
The rulers and other powerful or wealthy members of these civilizations frequently mistreated the poor, sometimes subjecting them to hard labor on enslaving them.
Babylonian Talmudic and early Christian writings from later times entreat people with resources and good fortune to relate to the poor with compassion.
As the powerful nations of western civilization become established, they codified relationships between the poor and non-poor into law, as was done in Babylonia (see of Hummurabi). The present-day welfare systems of the United Kingdom, the United States and Canada envolved from a 17th Century British legal act known commonly as the poor laws.
The rise of civilizations also led to stratifications among nations and territories around the glob. Powerful and wealthy nations maintained and increased their power and wealth and build empires by using the labor and resources of less powerful Regions.
This dynamic took a new form in the era of colonialism. Through two colonial period from the 15th Century to the early 19th Century to the mid 20th Century Countries in Western Europe and later United State and Japan laid claim to territories and created colonies, in Asia, Africa, and Latin America. These are areas where people still lived.
During the first period of colonialism, several western European Countries used their colonial territories to provide them with goods for consumption and trade. In the late 18th Century the Industrial revolution brought mechanized production to many nations; with increased in technology. Industrialized Countries could be able to produce larger quantities goods. To achieve this level of production they relied on colonies to provide raw materials the industrialized Countries and many of their people experienced increase in wealth and ease of essential needs, clothing food and shelter.
The colonies deprived of their resources continue to be more poor.
In other colonies were centers of slave trade. Many European Nations, set up outposts in Western Africa from which they shipped slaves to the colonies of Americas and Caribbean.
These Countries used slaves for free labor in their own land. Slaves suffered a total loss of home, land and livelihood.
The economies of the former colonies in Africa, Asia and Latin America began to change in the Mid 20th Century when they gained political independence. Most former colonies came to be known as developing Countries (Third World) the known as developing Countries (Third World) the home of the poorest people in the World.
CAUSES OF POVERTY: Many different factors have been cited to explain why poverty occurs. However no single explanation has gained universal acceptance. Seven Primary factors that may lead to poverty which includes:
(1) Overpopulation
(2) Unequal distribution of resources in the World economy.
(3) Inability to meet high standards of living and costs of living
(4) In adequate education and employment opportunities.
(5) Environmental degradation.
(6) Certain economic and demographic trends and
(7) Welfare incentives.
§ Over population:- Is a situation of having large numbers of people with too few resources and too little space. This situation is associated with poverty. Excessively high population densities put stress on available resources. For example, Bangladesh has the highest population in the World, with 938 persons per SQ KM. High rate contribute to over population in many developing Countries. Children are assets to many poor families, because they provide labor (Manual), usually for farming.
§ Unequal Distribution of resources:- Most of experts agrees that the legacy of slavery and colonialism accounts for much of the unequal distribution of resources in the World economy. In many developing Countries the problems of poverty are massive. Same social scientists argue that wealthier Nations continue to practice a form of colonialism known as Neo-colonialism. Developed or rich Nations have been able to get cheap raw materials and natural resources from poorer Countries for manufacturing Industrial goods which later sell at very high prices, (Unfair terms of Trade). The poor Nations has no Industries, so they continue to depend on imported Industrial goods.
§ High standard of living and costs of living: People in developed Nations may have more wealth and resources than those in developing Countries, their standard of living is also generally higher. Thus people who have what would be considered adequate wealth and resources in developing Countries may be considered poor in developed Countries.
§ Inadequate Education and Employment:
Illiteracy and lack of education are common in poor Countries often cannot afford
to provide for good public schools, especially in rural areas. Where as virtually
all children in Industrialization Countries have access to education.
Without education, most people cannot find income-generating work. Poor people also often forego schooling in order to concentrate on making a minimal living. In addition developing Countries tend to have few employment opportunities, especially for women when people do not have work, they do not make any money; thus high unemployment leads to high levels of poverty.
§ Environmental Degradation:- In many parts of the world, environmental degradation, the deterioration of the natural environment, including the atmosphere bodies of water, soil and forests, is an important cause of poverty. Environmental problems have led to shortages of food, clean water, materials for shelter and other essential resources. As forests, land, air, and water are degraded people suffers and poverty problems shoot to its peak.
§ Economic and demographic trends: Poverty in many developed Countries can be linked to economic trends. In the 1950s and 1960s for example, most people in the united states experienced strong income growth. However, between the early 1970s and the early 1990s typical incomes, adjusted for inflation grew little while the cost of living increased. Periods of economic recession tend to particularly affect young and less-educated people, who may have difficulty in finding jobs. Changes in labor markets in developed Countries have also contributed to increased level of poverty. The level of poverty also increase in the developed nations due to rising disparities in the distribution of resources. For example in 1970s, the poorest 20 percent of all U.S households have earned smaller percentage of the total national Income (generally less than 5 percent), while the richest 5 percent of households have earned greater percentage 45 percent of the total national income. Demographic shifts is also cited to contribute to overall poverty. For example the change of family structure; leading to a single parent status. Single parent families with children have a much more difficult time escaping poverty than do two families.
§ Individual Responsibility and Welfare dependency: There are differing beliefs about individual responsibility for poverty. Some people believes that poverty is part of society structure and inevitably in it there must be poor people. Other believes that poverty is an outcome of lack of the employment and education. Other people believes that poverty carries an element of personal responsibility. For example if people or a person voluntarily choose to use drugs which leads them to be poor, then they are to blame themselves. On the welfare Dependency factor, some people believes that these programs provide incentives for people to stay poor in order to continue receiving payments and other supports. This argument also suggest that welfare support, discourages work and Marriage. In the United states and other developed Countries getting a job results in reduced welfare support; the same is true when a single parent gets married.
§ Effects of poverty: Poverty has wide-ranging and often devastating effects. Many of its effects, such as poor nutrition and physical health problems, result directly from having too little income or too few resources. As a result of poor nutrition and health problems, infant mortality rates among the poor are higher than average; and life expectancy in lower than average. Other effects of poverty may includes infections disease mental illness and drug dependence. Some other effects of poverty may not easily be identified. For example extended hunger and lack of employment may lead to depression, which may sometimes to criminal behavior.
§ Long Term Effects of Poverty: People who grows up in poverty may experience life long problems. They are disadvantage in things such as education, because they have limited income and resources. All children need adequate nutrition and health care for good physical and mental development. Poor children are of malnourished and sick. Studies has shown that people who grow up in persistent poor households experience more difficulties throughout their lives than those raised in household with good income. In addition, poverty tends to perpetuate itself in many cases, those who had poor parents are poor themselves. They may also have learned a mindset that keeps them from getting out of poverty.
IMPERICAL REVIEW OF POVERTY
POVERTY: CURRENT GLOBAL ESTIMATES AND OUTLOOK
Poverty projections indicate that over the next 15 years the share of the population living in extreme poverty is expected to decline in all developing Regions. Over all poverty millennium development goals (NDG..) of reducing extreme poverty by 50 per cent from its 1990 level by 2015 will be achieved. At the global level, this means that by 2015, only 12 percent of the population in developing Countries will live on less than $1 a day or less, down from 29 percent in 1990. The sharp drop terms is only partially reflected in the absolute number of poor is expected to be 721 million in 2015 as compared to 1.2 billion in 1990 and 1.1 billion in 2002.
However, the decline in poverty across regions is highly uneven. For example in East Asia regions extreme poverty has already been halved. At the other extreme is Sub-saharan Africa where despite a 4.7 percentage point decline in the share of people in poverty in 1999 and 2004, some 36 percent of Africans will still be in extreme poverty by 2015 according to projections based the on latest data, this is far higher portion than MDG target of 23 percent. Further more, due to higher population growth absolute number of Africans living at or below the one dollar a day level, is projected to increase. And because per capital incomes elsewhere are projected to grow faster, the continent will continue to fall further behind the rest of the world, unless steps are taken to improve economic growth in Africa. The region now accounts for 30 percent of the world’s extreme poor, compared with 19 in 1990 only 11 percent of the in 1981.
In regions, the risk of falling short is even greater for the human development goals. In particular, on current trends, most regions will fall short of health related goals, including child and maternal mortality, the reversal of HIV/AIDS pandemic, and increased access to sanitation. Prospects are brighter in Education.
§ Poverty in Developing countries:- Many developing nations experience severe and widespread poverty, which often leads to disease epidemics, starvation and deaths. In the past few decades, millions of people have starved and died as a result of famine. For example in countries like Bangladesh, Ethiopia, Somalia , Sudan. Recently in 1998, almost one person in four (23 percent) residing in developing countries lived in less than $1 per day. Poverty in Most cases affects women, have low social status and are restricted in their access to both education and income generating work. They commonly depend on men for support, but often get little.
People who do not work such as young children the elderly and many people with disabilities depend on families and other support networks for basic necessities. However, neither poor families nor the governments of many developing countries ca adequately support the non working . Thus the poorest countries have high rates of child morbidity (diseases) and mortality. Children also have very low social status and often suffer from parental neglect and abuse because they are not considered important. Like women in may developing Countries , children may be exploited as prostitutes or as workers for little or no pay.
§ Poverty In Developed countries. The nature of poverty in the developed world differs greatly from that in the developing world. In developed countries, the majority of people commonly earn over 200 times the per capital income of the poorest developing countries. For this reason, developed nations usually measure the income lever of poverty as a portion of average income of as an amount below which a person or family cannot afford basic need, including housing for people with low or no income, poverty often takes the form of homelessness; those in less extreme poverty often live in substandard and sometimes dangerous housing. Many of the poor in developed countries are also exposed to high level of violence associated with drug dealing, child abuse and other bad crimes. The \united state has the highest rates of poverty compared to most of other developed countries.
§ A study of 16 developed nations conducted in the early 1990’s used a single measure of comparison: Poverty was defined as earning below half the median of all incomes. The result showed that about 19 percent of the U.S population lives in some degree of poverty. The rate were between 10 and 15 percent in Australia, Canada, Ireland, Japan, Spain and the United kingdom. Many of the other countries of Western Europe including Belgium, France, Germany, Italy, The Netherlands and Scandinavian countries (Finland, Norway and Sweden) all had poverty rates of between 5 and 8 percent. Poverty rates in some developed countries, including the United States and United Kingdom are higher among racial minorities. Indigenous people in developed countries tend to suffer from very high rates of poverty. In the United states, Many native Americans lives and work on economically depressed Native American reservations and experience high rate of joblessness and alcoholism. For example in Australia, many Aboriginal people live in similar conditions.
§ MEASURING POVERTY. Poverty can be measured in a variety of ways or options. Economists have traditionally chosen income as the basis for measuring and defining poverty but even that choice allows for a multitude of options. While no one measure is necessarily correct but some are better that others.
§ INTERNATIONAL MEASUREMENT. In international economics such as in statistics kept by the United Nations (UN) the measure of a country wealth is generally based on its gross domestic product (GDP). GDP measures the aggregates yearly monetary income of all of a country’s people and businesses. For the purpose of figuring poverty levels, GDP figures are usually calculated as GDP per capital.
If two countries have the same aggregate GDP, the one with a smaller population will have a higher GDP per capital. In the 1990s developed countries typically enjoyed average per capital incomes in excess of $15,000and of ten $20,000. At the other extreme, the poorest countries often had per capital income in Mozambique, one of the world poorest countries was about $100 at the end of 1990s.
NB: Levels of poverty also depend on how income and resources are distributed. Countries with
High GDPs can have low levels of poverty if people have relatively equal amounts of
Income and resources, such as in Scandinavia. On the other hand, countries with equally
high GDPs will have higher level of poverty if a few people have far more income and
resources than the rest. The united state is a good example.
§ GLOBAL – POLICY REVIEW UPON POVERTY.
National Government uses poverty measurements to develop programs that provide assistance to the poor. All developed countries have existence to the poor. All developed countries have existence antipoverty programs, primarily in the form of social security and welfare systems. And for most of developing countries the same forms of social security programs are in place. Nevertheless little has been achieved in getting people out of poverty. International organizations also use poverty measurement to decide how much money to give to national governments and how to advise Countries on strategies for reducing poverty.
FIGHTING POVERTY IN DEVELOPING COUNTRIES (Policy)
The Governments of most developing Countries provides limited assistance to prevent poverty. Most have minimum social security programs, which provide benefits during periods unemployment, illness, disability at retirement and to families of diseased workers. A variety of organizations, such as the UN, Aids agencies, non govemental organizations and private development banks, supports antipoverty programs in developing Countries.
Many international Govemental organizations have anti-poverty programs. These includes many regional organizations such as the organization of American states and the European Union, as well as the UN, which encompasses Countries around the World. The United Nations operates many of the largest antipoverty programs through its agencies. Other UN agencies involved in alleviating poverty in the developing world include the United Nations Children’s fund which
provides food, medicine and education programs for children worldwide and the United Nations food and Agriculture organization, which supports increased agricultural productivity and improve food distribution and nutrition.
(Reviewed by Thomas J. Corbett)
Microsoft ® Encarta ® Enyclopedia 2004 (c) 1993 – 2003 Microsoft cooperation.
FIGHTING POVERTY – GLOBAL EFFORTS (POLICY)
Against this backdrop, and with less than 10 years to 2015, achieving the goals is a huge challenge, which calls for a concerted effort by developing and developed countries. actions are needed in the following Areas:-
(i) Anchoring efforts to achieve the MDGS in Country led development strategies is central to coherent and effective scaling up of development progress. Framed against a long-term development vision, these strategies should set medium-term targets tailored to Country circumstances for progress toward the MDGS and related development outcomes and they should define clear national plans and priority in achieving those targets, linking policy agendas to medium-term fiscal frame works of August 2007. 54 low-income Countries had prepared reduction strategies.
To improve the effectiveness of its support, the world Bank aligns its activities to
these National plans through Country assistance strategies. The National strategies
also serve as a basis for harmonization with other development.
(ii) Aids effectiveness can be increased by strengthening the Country-driven development model. In March 2005 developing Countries and donors committed to the Paris Declaration on Aid effectiveness. Months later, at Gleneagles donors reaffirmed their commitment to scaling up aids to help meet the millennium development Goals, starting that this would amount to doubling of development to Africa by 2010.
For this aid to translate to poverty reduction, close attention must be paid to the
quality of aid. The Country-based development model comprises of three principal
results-oriented development strategies which rely on strengthened domestic
institutions. Pillar two is base on donor alignment behind Country strategies to
deliver timely and predictable assistance in a way which reinforces, rather than strains
these institutions pillar, three encompasses the mechanisms of mutual accountability
which ensure what both national governments and donors are responsible for meeting
their commitments to Country-based development. Progress under the three pillars
for Country-based development model indicates that the scaling up of aid is feasible
in variety of contexts.
(From WWW.worldbank.org/poverty), up-to-date September 2007.
(iii) Shared growth is key to poverty reducing reduction:
Growth although extremely important, does not explain all the variation in poverty
reduction. Frequently affects the pace at which growth is translated into poverty reduction. Growth is less efficient in lowering poverty levels in Countries with high inequality or Countries where the distribution pattern of growth favor the non-poor
(see WWW.workldbank.org/poverty) up to date September 2007.
EFFORTS IN FIGHTING POVERTY – TANZANIA RESPOND – POLICY
Since independence in 1961, we Government of Tanzania has had poverty reduction as its main goal. In 1997, the government adopted the National poverty eradication strategy, which spells out a vision of a society without abject poverty, and with-improved social conditions. This vision which in line with the International development Goals (MDGS) remains a point of reference for current poverty actions.
The most important action document is the “Poverty Reduction strategy paper. A committee of Ministers and the governor of the Bank of Tanzania has been established to steer the preparation of the PRSP. The committee began its work in mid-October 1999. The national workshop to discuss draft of PRSP was held in June 2000. Final draft incorporating the views of stakeholders, with objectives and program priorities is in targeted in the budget in July 2000.
(see WWW.imf.org/external/NP/prsp/2000/tz/01/INDEX.HTM)
CONCLUSION:
Historically, there has been a general tendency to approach development as a process of acquiring and using Western-style systems, standards, expertise and problem solving methods, resources, Capital, technology and so on. Obviously, this approach is problematic because there is move to development than looking outward for solutions of a country’s or society’s problems. Sustainable development should be homegrown and not something that is easily exported or imported from one place to another. The poor nations, Tanzania included, must realize that their underdevelopment (poverty) would never be solved by non-stakeholders. Hence the poor nations should not rely 100percent to such external actors like IMF the World Bank. To deal effectively with poverty and Underdevelopment, grass root efforts are required These include; (i) Good domestic leadership (ii) Commitment of the poor people themselves to cooperate and work together towards attainment of their own development. This entails active citizenship of the ordinary citizen to fully participate in the design and implementation of policies, programs and projects that affect them.
Over-dependent has to the large extend brought a pull-back in terms of improving the living standards of most the African societies; Tanzania included. Economic and social conditions have deteriorated in many African countries that it is not unusual to find older people arguing that life during the colonial period was actually much better .
REFERENCE:
1. OKECHUKWU UKAGA OSITIG AFOAKU – STSTAINABLE DEVELOPMENTIN AFRICA, AFRICA WORLD PRESS, INC (2005), P.OBOX 48 ASMARA ERITREA.
2. UNITED REPABLIC OF TANZANIA – INTERIM POVERTY REDUCTION STRATEGY PAPER (PRSP) – PREPARED BY THE TANZANIA AUTHORITIES MARCH 14th 2000.
3. INTERNET; WEB WORLDBANK.ORG/WBSITE/EXTERNAL/NEWS/O; 29/10/2007.
4. INTERNET;MICROSOFT (R) ENCARTA (R)ENCYCLOPEDIA 2004
5. THE UNITED REPUBLIC OF TANZANIA A PRESIDENT OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT. THE OPPORTUNIES AND OBSTACLES TO DEVELOPMENT – A COMMUNITY PARTICIPATORY METHODOLOGY HAND BOOK – BOX 1923 DODOMA APRIL 2004.
INTRODUCTION:
This research paper will examine on sustainable Agricultural development in Tanzania in relation to community economic development the research work will focus on providing”
- Some theoretical definitions of key terms and concepts, before getting into the analytical part.
- A brief literature review on past agricultural practices in Tanzania.
- Literature on current Agricultural development practices in Tanzania and challenges to sustainable agricultural development in Tanzania.
- Guiding policies for sustainable agricultural development in Tanzania and ways to address the factors which hinders sustainable agricultural development in Tanzania.
- Conclusion - Basing on lessons learned and my own opinions.
DEFINITION OF KEY TERMS AND CONCEPTS:
SUSTAINABLE AGRICULTURE: Sustainable agriculture refers to the ability of a farm to produce food indefinitely, without causing irreversible damage to ecosystem health. Two key issue are; biophysical (the long-term effects of various practices on soil properties and process essential for crop productivity); the other is social-economic (the long-term ability of farmers to obtain inputs and manage resources such as labor). Sustainable agriculture integrates three main goals (i) Environmental stewardship, (ii) Farm profitability and (iii) Prosperous farming communities. These goals have been defined by a variety of disciplines and may be looked at from the vantage point of the farmer and consumer.
Two of the many possible practices of sustainable agriculture are:-
(i) Crop rotation and
(ii) Soil amendment, both designed to ensure that crops being cultivated can obtain the necessary nutrients for health growth. In practice, there is no single approach to sustainable agriculture, as the precise method. (From: Wikipedia, the free encyclopedia).
COMMUNITY: A community is a social group sharing an environment, in one geographical area, with shared interests, goals, beliefs, resources, preferences needs and number of many other conditions may be present and common (From: Wikipedia; the free encyclopedia).
ECONOMIC DEVELOPMENT:- From the academic and institutional approaches; economic development can be seen as a complex multidimensional concept; involving improvements of human well being.
Professor Dudley Seers argues that development is about outcomes that can be seen through reduction and elimination of poverty; inequality, and unemployment, within a certain community.
COMMUNITY ECONOMIC DEVELOPMENT (CED):
Community economic development is local action to create economic opportunities (From the Canadian economic development network in 2003). The British Colombia working group on CED, 1991; Community directed process that explicitly combines social and economic and it is directed towards fostering the economic, social, ecological and cultural well being of communities.
REVIEW LITRATURE OF PAST SUSTAINABLE AGRICULTURAL DEVELOPMENT PRACTICES IN TANZANIA
In Tanzania agriculture remained largely traditional and subsistence oriented. It has been so before the colonial era, during the colonial era and even after attainment of independence from the colonizers. Before the colonial era farming was purely traditional, whereby traditional crops and life stock for a substance living was the order of the day. During the colonial era, farmers were pushed to produce crops that are recognized as raw materials in European Industries. A significant amount of quality land was devoted to cash crops to meet external colonial desires instead of using it to produce food for the local population. Many traditional crops and animals useful to the local people and compatible to local environment were displaced by colonial rules. In most cases quality land was confiscated from the indigenous people and given to white farmers and converted to plantations; to produce raw materials to serve the foreign Industries. As a result Tanzania like other many African Countries found itself providing cheap raw-materials to foreign Industries and markets for expensive foreign industrial goods. Due to this nature of agriculture the local people are left without enough food and poor state life. After independence 1961 to date; more than forty years, the state of agricultural has little improvement due to a variety of factors. The most affecting factors are:
(i) The rate of population growth is very high in relation to farm output.
(ii) Continued use of traditional farming methods
(iii) Poor Infrastructure.
The government since independence has bee putting much efforts to ensure a sustainable agriculture development as agriculture is central and a major mainstay of more than 80% of the country population, and it accounts for about 50% of the Gross Domestic product and more than 75% of the foreign exchange earnings.
IMPERICAL REVIEW – FOR SUSTAINABLE AGRICULTURAL DEVELOPMENT IN TANZANIA
The Agricultural sector has maintained a steady annual rate of over 3 per cent during the last decade. This is greater than the rate of total population growth of 2.9 percent, so there has been a small but steady increase in annual per capital agricultural output. However, given the importance of agriculture as the mainstay of rural livelihoods, agriculture must grow much faster if rural poverty reduction (community Economic Development) is to become a reality in Tanzania. The recurrent budget allocations to the sector for the past years shows that there is gradual increase in overall funding from Us $ 36.94 million for 2002/03 to Us $ 55.92 million in 2003/04 and to Us $ 59.84 million in 2004/05. These figures do into take into account inflation.
Apart from the recurrent budget allocations to the Agricultural sector; the government also brought forward what is called Agricultural Sector Development Strategy (ASDS). The objective of the ASDS is to create an enabling rural poverty and for ensuring household food security. Based on 2002 household Budget surveys the specific agricultural sector growth targets are:
(i) Reducing the rural population below the basic poverty line from 38.7 percent in 2000/01 to 20.4 percent in 2010
(ii) Reducing the percentage of rural food – poor people from the current 20.4 percent to 11.6 percent in 2010 and
(iii) Achieving a growth rate in Agriculture of at least 5 percent in 2003.
The ASDS provides guidance for future interventions. First it focuses on productive and gainful agriculture. Substance Agriculture must become profitable smallholder agriculture.
(UNITED REPUBLIC OF TANZANIA) AGRICULTURAL SECTOR DEVELOPMENT PROGRAMME –DOCUMENT (2003)
CHALLENGES TO SUSTAINABLE AGRICULTURAL DEVELOPMENT IN TANZANIA
The challenges to agriculture are many diverse and complex, no single factor is solely responsible. Four major factors can be cited:
(i) Natural factors
(ii) Structural factors
(iii) Social and political factors and
(iv) External factors
(i) NATURAL FACTORS:- Agriculture in Tanzania like many other African Countries
is pronominally rain fed and therefore vulnerable to drought. Rains are generally
Unpredictable and sometimes scanty. A part from being unpredictable and scanty
sometimes irregular patterns are experienced eg. Eli-nino rains of 1997. These types
of rains leads to deterioration of soil structure with consequence loss of nutrients and
increased erosion. Also when rains are so forceful associated with foods, it displace a large number of people thereby aggravating the agricultural problems as well as the supply and distribution of food. In this cases sustainability in agricultural development becomes unrealistic and in turn hampered community economic development.
(ii) STRUCTUAL FACTORS:- Agricultural sector in Tanzania lack adequate infrastructure for production, storage, processing, marketing and distribution. Poor transportation system and bad roads makes it difficult for farmers to get inputs and their produce out of their farms. Incomes tends to be relatively low in areas with poor access roads. This lack of infrastructure has hampered Agricultural development. Further move many farmers are not skillful in strategic marketing, they tend to focus on production first and worry later. In most cases buyers are the one who dictate prices of produce.
(iii) SOCIAL AND POLITICAL FACTORS:- Social and political problems such as poverty, corruption, inter-ethnic conflicts and civil wars also helps to impede sustainable agricultural development. In Tanzania poverty be the biggest hindering problem forwards sustainable Agricultural development. The majority of Tanzania farmers are small holds farmers able only to produce little their survival (subsistence living) and no surplus. In most cases this has been due to poverty, in ability to acquire big capital and other agricultural inputs. Modernized agriculture and modern agricultural techniques lids to high productivity (Huge surplus). Very unfortunate since independence to date a great majority of Tanzania farmers are still applying the traditional methods of farming. The use of hand hoe, poor quality seeds and poor farming techniques; is the order of the day. The government should extend resources to the rural peasants and empower them to acquire agricultural inputs and provide them with modern agricultural techniques, through extension workers.
Another threatening factor affecting sustainable agricultural development in Tanzania is human diseases. Diseases such as HIV/AIDS, Malaria, Water born diseases are imposing a big pullback in agricultural development, by reducing the labor resource (Oxfam, 2002). In Tanzania HIV/AIDS pandemic has been declared a national disaster. The government, local institutions, non-governmental organizations, society groups, together launching educational campaigns to combat the HIV/AIDS pandemic. The HIV/AIDS largely undermines the agricultural sector in many ways. Decline in agricultural productivity caused by HIV/AIDS by limiting the availability of time labor and financial resources, necessary to maintain agricultural sector. Impact on labor-labor shortage due to family members taking time off to care for the victim.
Diseases like Malaria and HIV/AIDS are taking the lead in Tanzania claiming a lot of lives and reducing the labor resource and bring a negative effect on sustainable agricultural development and in turn aggravated poverty to the large majority of Tanzanian communities.
EXTERNAL FACTORS:- Tanzania being one of the poorest Countries of the world, in the African continent one of the least developed continents in the departure of the colonizers continues to suffer with poverty and economic stagnation. This has been brought about mainly by unfair economic and trade practices between the rich and the poor. The rich Countries through the Breton wood institutions (World Bank, and IMF) continue to pressurize the poor Countries to open their markets and remove barriers for the favorable penetration of manufactured goods from the west. While in the other hand the western Countries continue to maintain high tariffs and maintain huge subsides in favor of their economies and trade. The subsidies which the rich Countries put into their agriculture sector are almost equal to the total debt burden of Africa; (According to N. stern of the world Bank Research). It shows agricultural subsides in rich Countries is about 300 Billion U.S Dollars a year. This suppressive world prices especially third world exports, Tanzania included. Because Tanzania depends largely on Agricultural outputs especially cash crops for her export earnings, for years the Country economic growth which depends largely on Agricultural sector about 60% has not attained any significant achievement for years. There have been loud voices throughout the world to bring about fair world trade but little or nothing has been achieved. In this perspective the question of sustainable Agricultural development in Tanzania has a log way to go, and will continue to have negative impact on community economic development.
ADDRESSING THE CHALLENGES – TOWARDS SUSTAINABLE AGRICULTURE DEVELOPMENT IN TANZANIA .
To address the challenges, comprehensive and integrated efforts of both players are needed, in fostering sustainable Agricultural Development in Tanzania. The players should includes farmers, policy makers, academicians, civil societies (e.g Cooperatives), agribusiness and international organizations. Foremost and above all the government must give Agriculture the priority encourage farmers and peasants, by providing them with subsidized farming inputs and ensuring stable and fair prices for their produce.
In Tanzania the following hindering factors has to be addressed:-
(i) YIELD AND PRODUCTIVITY:- To successfully increase yields and productivity and farming practices such as intensive agriculture, excessive nutrients mining in form of harvest cultivating marginal lands and so on, tend to deplete the soil and degrade the environment. To sustainability increase yield therefore; such environment degradation must be minimized and compensated through proper resource management and rejuvenation of land. Sustainable options for increasing yields should include appropriate use of inputs (eg.; fertilizers, improved animal and crop varieties). With a view to optimizing rather than maximizing yield and productivity. It is always pertinent to note that the main natural factor limiting agricultural productivity in many parts of Tanzania is scarcity and poor distribution of rainfall, which means that irrigation is also key in certain areas where there is adequate water to raise agricultural productivity.
(ii) PESTS AND DISEASES:- Concerted efforts at the local, national and international levels are needed to eradicate major diseases and pests; such as Rift Valley Fever in Tanzania and Kenya. It would not been possible for farmers themselves to combat the problems without concerted efforts of both government, farmers and even international organizations or institutions. At the farmer level, the direct effects of agricultural diversity on the prevalence of pests and diseases are very important. For example a diverse and well balanced agricultural environment not only discourages pests and diseases, but also enables crops and animal within such environments to be healthier and better able to withstand attacks.
(iii) INPUTS AND SERVICES:- The Tanzania government must use a variety of schemes to improve farmers access to supplies and services that are necessary to smooth and for the time being has schemes to support rural marketing and finance institutions, such as local savings and credit cooperatives (SACCOS) and village cooperatives Banks (VICOBA) and loan groups, production and marketing Cooperatives, these government efforts will promote access to inputs, and improvement of farmers markets and help them to overcome risks inherent in agriculture. However while the government can play an important role in promoting such schemes the private sector should always be allowed and encouraged to initiate or take over these efforts this is important because the private sector tends to be more efficient and realistic. Further these initiatives must be developed from the bottom-up approach, basing on the peoples need and managed in participatory fashion with transparency, accountability, efficiently and effectiveness for the benefit and success of the farmers. A participatory bottom-up approach, would help ensure that farmers needs are fully understood and their input, cooperation and ownership secured for sustainable community economic development.
(iv) DROUGHT AND FLOODS:- In Tanzania, draught and floods in many parts of the Country has led to poor yield and productivity as well as displacement of people and their resources, together with damaging roads and hamper access to food and other supplies. These natural factors had negative impacts on sustainable Agricultural development. The government should set up strategies to mitigate these disasters. Such strategies are for example:
- Instituting national and Regional systems for detecting early warning signs of impeding disasters, as well as effective mechanism for dealing with them before things get out of control.
- Establishing affordable irrigation facilities as treadle pumps and in Tanzania money maker pumps.
- Catching the infrequent rains in man made furrows that force the water into the soil rather than letting it run off in flash floods that leaves the soil dry eroded.
- Using drip irrigation technology to efficiently target watering of crops.
- Promoting better in field water management for the dual purpose of making efficient use of water in dry conditions and mitigating flood damage in cases of heavy rains.
All the above mitigating efforts to drought and floods disasters can bring about positive results in sustainable Agricultural development and in turn Community economic development.
(v) SOIL FERTILITY:- Tanzania is faced with poor soil fertility due to poor farming methods
accelerated erosion and soil degradation caused by overgrazing uncovered land, deforestation and poor tillage techniques, as well as inappropriate use of fertilizers. If soil fertility continues to be depleted, the end result is low yields and poor productivity which leads to poor Agricultural development and in turn low level of Community economic development. Farmers and peasants must be encouraged to utilize locally appropriate cost-effective and easy to implement approaches agriculture production such approaches are like the use of mulching, minimum tillage, agro-forestry and many others which guards the biophysical loss of soil fertility.
GUIDING AGRICULTURAL DEVELOPMENT POLICIES CURRENTLY IN PLACE (TANZANIA)
The evaluation Agricultural policy in Tanzania has been strongly influenced by changing Macro-economic policies. The post-independence period (1961 – 1967) was marked by an emphasis on improved peasant farming through extensions services and provision of credit and marketing structures at the sometime the government continues to support large-scale farming in selected areas. Following the Arusha declaration (1967) the government became the manager and investor in virtually all sectors, including agriculture. Most large-scale estates were nationalized. Collective farming was promoted and systems of national pricing of agricultural produce were established. By the mid-eighties the government adopted to move production, processing and marketing functions away from public sector. This process is still underway. The government now retains responsibility for policy, the regulations and maintenance of law and order. Inevitably, there has been a need to redefine sectoral policies to support this macro-economic reforms agenda. This has resulted in the agricultural and livestock policy of 1997; simultaneously a new approach to rural development, which focuses on decentralization and empowering local communities and local government authorities (LGA) has been developed. The macro-economic reforms that started during the mid-eighties have yielded steady agricultural sector growth. Nonetheless, there are many challenges that still need to be overcome to accelerate growth and reduce rural poverty. The Tanzania development vision (TDV) 2025 provides guidance on national long-term strategic goals for social and economic development and highlights the change in approach and mindset needed to get there. It envisages in raising the living standards of Tanzania communities, especially farmers. This will achieved through increased productivity and investments in human capital, which are central themes of the ASDP – Agricultural sector development programme. The poverty reduction strategy paper, (PSRP) which was approved in 2000, priority to agriculture and rural development and targets poverty reduction as the central goal of national development. Subsequently, the rural development strategy (RDS) and the agricultural sector development strategy the government’s approach in 2001, have redefined the government’s approach in these areas.
LEADING AGRICULTURAL SECTOR POLICIES AND STRATEGIES:-
There has been considerable recent evolution in public relating to agricultural sector. Some of the most important are summarized bellow:-
(i) The agricultural and livestock policy of 1997:-
entails the following:
* Liberalization of agricultural markets and removal of state monopolies in the export and
import of agricultural goods and produce.
* Clear definition of the roles of government and the private sector in the production and
position of support services.
* Government responsibility of Industry regulation through commodity boards.
* Emphasis on food security at the national and household levels as opposed to national and
household levels as opposed to national food self-sufficiency.
(ii) The cooperative development policy of 1997 is intended to:-
* Provide a framework for the structured cooperatives to operates on the basis of independent,
voluntary and economically viable principles of good management.
(iii) The local government reform programme; of 1998:- The main strategy is
decentralization. The move from centrally planned agriculture locally planned agriculture is
one of the key strategic pillars of ASDP.
(iv) The land policy of 1995:- This provided the basis for the land and village land acts of
1999. This provides the framework for stronger local control of land resources, especially
by villagers; and establishes the basis of more effective land market.
(v) The micro-finance policy of 200…:- Intended to establish a basis for efficient and effective
micro-financial system in the Country that serves the low-income segment of the society;
therefore contribute to economic growth and poverty reduction.
(vi) Rural development strategy of 2001:- This focuses on stimulating economic growth and
poverty reduction in the rural areas; through good governance, social justice and
intervention to promote shared growth and poverty reduction in the rural areas; through
good governance, social justice and intervention to promote shared growth in rural and
urban areas; as well as increasing access to services and inputs.
(vii) The agricultural sector development strategy (ASDS) of 2001:- I s builds on the
Agricultural and Livestock, and cooperative development policies. ASDS is important
because,
* It targets improvements in farm incomes, upon which the majority of the rural population
depend which the majority of the rural population depend this is principal in rural poverty
reduction.
* It emphasizes availability and access to food, and thus advances food security.
* It provides a comprehensive, sector-wide programme for Agricultural development which is
key to national economic development.
(viii) The small and medium enterprise policy 2002:- This policy aims to promote income-
generating activities and support diversification of private sector activities. In the context
of the Agricultural sector, this includes the development of commercial opportunities in
marketing and processing agricultural produce.
NB: New policies and strategies in the rural sector offer a new focus on productivity, cular ASDS, objective is to create an enabling environmental for improving agricultural productivity and profitability. In particular ASDS, objective is to create an enabling environment for improving Agricultural productivity and profitability, improving farm incomes reducing rural poverty and ensuring house hold food security.
Specific sector growth targets for agriculture that will contribute to achieve the poverty reduction strategy targets are:-
(a) Reducing percentage of the rural population below basic poverty line from 38.7 percent in 2001/01 to 20.4 percent in 2010.
(b) Reducing the of rural food-poor people from 20.4 percent in 2010.
(c) Growth rate in agriculture of at least 3.4 percent in 2000 to 5 percent by 2003.
CONCLUSION:
Well articulated policies, strategies and programmes formulated by experts and professionals has been a common tradition in trying to look for the correct therapy in addressing economic stagnation and eradication of abject poverty in the Tanzania community and in the developing countries. For a number of decades now these policies, strategies and programmes were imposed to the rural and urban people without their full knowledge and participation, as a result little outcomes in terms of solving their problems had always been realized. The recently different approach of bottom-up methodology should be more emphasized and applied in all plans aimed at community economic development. The government also should give top priority to the Agricultural development sector in terms of budgets allocation. “Because of the importance of agriculture in our development, one would expect that agriculture and the needs of the Agricultural producers would be the beginning and the central reference point of all our economy planning. Instead we have treated agriculture as if it was something peripheral, or just another activity in the Country, to be treated on a par with all the others and used by the others without having any special claim upon them……we are neglecting Agriculture. If we were not, every Ministry without exception and every parastatal and every party meetings would be working on the direct and indirect needs of the agricultural producers…we must now stop this neglect of Agriculture. We must now give it the central place in all our development planning. For agriculture is indeed the foundation of all our progress” (By President JULIUS K. Nyerere 20/10/1982).
REFERENCE:
1. OKECHUKWU UKAGA AND OSITA G. AFOAKU; SUSTAINABLE DEVELOPMENT IN AFRICA; AFRICA WORLD PRESS, INC. P.O.BOX 48 ASMARA, ERIT, 2005
2. UNITED REPUBLIC OF TANZANIA, AGRICULTURAL SECTOR DEVELOPMENT PROGRAMME FRAME WORK AND PROCESS DOCUMENT – FINAL DRAFT MARCH 2005.
3. THE UNITED REPUBLIC OF TANZANIA; MINISTRY OF AGRICULTURAL CY OF TANZANIA MINISTRY OF AGRICULTURE MARCH 31st 1983; PRINTED BY THE GOVERNMENT PRINTER, DAR ES SALAAM - TANZANIA.
4. INTERNET; FROM WIKIPEDIA THE FREE ENCYCLOPEDIA; - SUSTAINABLE AGRICULTURE.
5. UNITED REPUBLIC OF TANZANIA; INTERIM POVERTY REPDUCTION STRATEGY PAPER (PRSP); PREPARED BY THE TANZANIA AUTHORITIES MARCH 14th 2000.
6. THE UNITED REPUBLIC OF TANZANIA, PRESIDENT’S OFFICE; REGINAL ADMINISTRATION AND LOCAL GORVENMENT; A PARTICIPATORY PLANNING METHODOLOGY, HAND BOOK. P.O.BOX 1923 DODOMA; APRIL 2004.
7. I LIVINGSTONE AND H.W. ORD; ECONOMICS FOR EASTERN AFRICA (REVISED AND ENLARGED EDITOIN) (1980), HEINEMANN NAIROBI.
8. NORMAN HUDSON; SOIL CONSERVATION (1985), PRINTED BY DETESIONS PRINTERS LTD. G. BRITAIN.
9. THE UNITED REPUBLIC OF TANZANIA, COOPERATIVE DEVELOPMENT POLICY, 2002; GOVERNMENT PRINTERS DAR-ES SALAAM TANZANIA.
10. JEFFERY SACHS-FOREWORD BY BONO; THE END OF POVERTY, HOW WE CAN MAKE IT HAPPEN IN OUR LIFETIME, PRINTED IN ENGLAND BY CLAYS LTD, ST. IVES PLC; 2005
CASE STUDY
TO: THE MANAGING DIREDTOR CED LIMITED
FROM: JANE JULIUS MANAGEMENT CONSULTANCY FIRM
DEAR SIR/ MADAM
REF: A REPORT ON THE BENEFITS OF MANAGEMENT ACCOUNTING SYSTEM FOR CED LIMITED; AND PROBLEMS INHERENT IN QUANTIFYING BENEFITS
INTRODUCTION:- The definition of management accounting system:
Management Accounting is concerned with the provisions and use of accounting information to managers within organizations to provide them with the basis in making informed business decisions that would allow them to be better equipped in their management and control functions unlike financial Accountancy information (which for the most part, is public information), management accounting information is used within an organization (typically for decision – making) and is usually confidential and access to which is only available to a selected few.
According to the chartered Institute of Management Accountants (CIMA) Management Accounting is “the process of identification measurement, accumulation, analysis, preparation, interpretation and communication of information used by management to plan evaluate and control within an entity and to ensure appropriate use of and accountability for its resources. Management Accountability also comprises the preparation of financial reports for non management groups such as shareholders, creditors, regulatory agencies and tax authorities.
THE MANAGEMENT ACCOUNTING SYSTEM IS AN AIDING TOOL IN THE CONTROL FUNCTION OF MANAGEMENT
The management function of control ensures that the events and activities occurring within the organization are conforming to plans. A variety of controls are designed to evaluate the performance of different segments of the organization and over different periods of time (long term and short term). Specifically management will require information on the efficiency with which resources are being used in the many operations of the organization particularly the manufacturing, marketing, and administrative activities.
The control function at this operational level is closely associated with the management accounting system.
RULES OR CONVENTIONS OF MANAGEMENT ACCOUNTING
The rules or conventions; guides of a management Accountant in performing his duties. The rules are as follows: -
1. Accounting concerns itself with the recording of business transactions
2. As far as possible costs and revenues should be properly matched.
3. Profits should be credited on realization basis while losses should be provided in advance
4. The methods, procedures and principle should be consistent
5. The principle of matching costs with revenues should be strictly followed.
6. The accounting records should be kept as objective as possible.
7. The entire accounting information past, present, or future, in any form should be designed to meet the particular needs of the business.
8. The principles of reporting of exceptions should be followed when presenting information to the management.
9. The object of “Control at source accounting” should be followed. It means that the control mechanism should be established at the points where costs are incurred.
10. a profit cannot be said to be earned unless the capital employed is maintained intact in real terms.
11. For measuring the efficiency of business, techniques of measuring the return on capital employed should be adopted.
12. The management information should be fully integrated,
13. Overall costs should be apportioned to the costs be apportioned to the costs centers and recovered by products.
BENEFITS OF MANAGEMENT ACCOUNTING SYSTEM FOR CED LIMITED
In the present complex macro-economic environment, management accounting has become an integral part of management It guides and advises management at every step.
THE ADVANTAGESS OF MANAGEMENT ACCOUNTING SYSTEM:
It increases the efficiency of various business functions. The targets of different departments are fixed in advance. The achievement of these goals is a tool for measuring their efficiency.
The activities of the organization are planned in a systematic manner, various operations ca be planned with the help of accounting information budgeting and forecasting.
The different tools of management accounting have provided validity, objectivity, and reliability in business management.
Different techniques of management accounting help in effective control for business operations. The maximum utilization of capital, and maximum return on capital invested in business becomes feasible through application of accounting techniques.
It creates harmony in the relationship between the management to improve its service to its customers.
The management aims to control the costs of production and at the same time increase the efficiency of employees. When the cost of production is reduced, it will increase the profit.
The business gets rid of seasonal and cyclical fluctuations on account of the use of management accounting.
Unacceptable standards or sub standards which are often responsible for unhealthy and bad relations between management and employees, ca be removed by the use of management accounting. There arises improved and healthy relationship.
The use of management accounting helps to control of even eliminates various types of wastages production defectives etc.
Management accounting helps in communicating updated information to various parties interested in successful working of the business organization.
THE FUCTION OF CONTROL AS THE CENTRAL CORE OF MANAGEMENT ACCOUNTING
A greater part of management Accounting system is directed to the control function of management. The purpose of management function of control is to ensure that the events and activities occurring within the organization are conforming to plans. Plans leads to outcomes, and outcomes carries a quantitative and qualitative elements. Most of the events and the activities can either be measured quantitatively or qualitatively.
PROBLEMS INHERENT IN QUANTIFYING BENEFITS OF MANAGENTS ACCOUNTING SYSTEM.
No standards measurements are in place to measure non physical things like morale of employees good image derived from customers or general public etc.
Management accounting is recent discipline and therefore, it is in the process of development, hence it has few techniques to apply to measure some of quantitative and qualitative benefits.
NGOs ACT OF 2002 (QST NO. 6)
DEFINITION: Non-governmental organizations (NGOs) have bee defined by the worlds Bank as “Private organizations, that have activities to relief suffering, promote the interests of the poor protect the environment, provide basic social and undertake community development NGOs can be local, national or international. NGOs has contributed much in the development of communities. NGOs activities can be local national or international; NGOs are important partners of governments in bringing about development.
CRITICAL REVIEW OF TANZANIA NGOs ACT OF 2002 (WHETHER THE ACT HAS ADEQUATELY EXPRESSED THE FINANCIAL MATTERS)
By reading through the Tanzania NGOs Act of 2002, very little has been put forward to elaborate how the NGOs will handle their finances in terms of accountability and types of financial reports they should produce: the following are sections of the act which in one way or another deals with the issues of finances.
With Reference to section 32 of NGO Act 2002 Fund – Raising Activities:- It states that the NGO registered under this act shall be entitled to engage in legally acceptable fund raising activities.
Weaknesses of this section:-
a) The act did not mention the type of legal or illegal fund raising activities.
b) It does not stipulate which type of currency to be used to raise funds.
c) The section does not show where the funds raised be deposited i.e. in local banks or in foreign banks.
d) The section also did not state anything regarding how the fund raised should be spend.
Section 29: A of NGOs Act 2002: Each Non governmental organization shall for every calendar year prepare a report of its activities. Which shall be made available ………………….
This section has the following weaknesses:-
a) The act is silent on the feedback from the stakeholder.
b) Format for reporting is not mentioned by this necessary for the purpose of control and uniformity.
c) The section is also silent of material requirements by various stakeholders, such as public board etc.
Section 29 B of NGOs Act 2002: Prepare annual audit report and submit copies thereof to council and board.
This section has the following weaknesses:-
a) The act did not mention the type of auditors i.e. external or both
b) The act did not provide for the access by the public to the access by the public to the audited report
c) The act also is silent on the contents of the audited report.
d) The act does not provide mandate to the board to organize financial audit incase they are not satisfied by the audited report. Neither the act do not mention types of books of accounts to be maintained by NGOs, or types of activities which can not be quantified e.g. volunteering services etc.
CONCLUSION:
The Tanzania NGOs Act of 2002, needs to be revised in order to fill gaps which seems to be not fully stipulated in the current Act..
The following major areas are to be revised and fully elaborated.
a) The definition of NGOs should be provided in its broader sense, and the types of NGOs relevant to this act.
b) Type and capacity of the people managing the NGOs, this is in a bid to safeguard the sustainability of the NGOs.
c) Relevant Accounting systems, standards and formats.
d) Objective Based funds raising e.g. “Chama cha Madaktari Wanawake Tanzania” they raised funds specifically to treat women who are suffering from breast cancer. In general the Tanzania NGO Act 2002 desires much more analysis in all its sections, in order to broaden its long term vision and to provide the NGOs more accountabilities and responsibilities, to bring about realistic community economic development
REFERENCE
1. Calvin Angler (1988), management accounting; The Maple- Vail book manufacturing group ISBN 0-256 – 06986 -7
2. Bagavathi R.S.N Pillai, (2005), Management accounting, Rajendra Ravindrai Printers (PVt
Ltd) 1st edition
3. Carrick Martin; An Introduction to Accounting; third edition, Negraw – Hill book company
syduey - 1990
4. Tanzania NGO Act 20025. Internet – Google (The free Diction
Journal On Foreign Aids
INTRODUCTION
This journal on foreign Aids is set-up to discuss on the impact of foreign aids in relation to economic growth of the recipient countries moreless Asia, Latin America and Africa. The journal will also re-visit literatures and empirical will reviews provided by prominent world Bank and other renounced economic researchers. The journal will further cover some of the following important sub-topics:-
Definition of foreign Aids
Literature and Empirical Reviews done by Burnside and Dollar (2000)
Impact of foreign Aids on Economic Growth
Conditionally in foreign Aids
Evaluation of foreign Aids
Realistic vision for foreign Aids
Conclusion based on lessons learned and my own views and opinions.
DEFINITION OF FOREIGN AIDS
Foreign Aid, consists of economic or military assistance that one Country gives to help another. Many Countries give foreign aid, including Japan, Great Britain, and the U.S; and much of these foreign aids are extended to poor nations.
Foreign aid can take many forms, including donations of money, goods, services, and technical expertise. Foreign aid can be bilateral, which means it is given by one Country bilateral, which means it is given by one Country to another. It can also be multilateral that is given by a group of Countries. The term foreign aid is also sometimes used to describe assistance given to a Country by a private organization in another Country.
Basing on Burnside and Dollar (2000) paper, foreign aid is the “grant element of aid, excluding the loan component of concessional loans, which are made at extremely low interest rates. The (OECD) organization for economic cooperation and development; defined foreign aid as “Official development assistance which consist of loans, grants that one government or multilateral organizations gives to developing Countries to promote economic development and welfare” the assistance must be granted on concessional terms, which in the case of case of loan means that at least 25 percent of it must be in the form of a grant. Data on officially development assistance also include technical co-operation, such as teaching farmers new techniques or providing advice on marking economic reforms; they exclude military assistance, political development programs, export credits, and debts forgiveness for military loans.
For the sake of a broader definition, the foreign assistance is considered as all money classified as official development assistance. These includes military assistance, political development programs, export promotion, debt forgiveness, and non concessional lending by all bilateral and multilateral organizations. any money that benefits a developing Country-grants, concessional loans or non-concessional loans, from a governmental or quasi-governmental organization is considered of credit from the International Monetary Fund (IMF), which is excluded unless otherwise noted. NB – Aid give for different purposes of, course will probably have different effects on development for example assistance designed to foster economic reforms or improve production methods is likely to have a greater impact on development growth than military assistance.
LITRATURE AND IMPERICAL REVIEWS-DONE BY BURNSIDE
AND DOLLAR (2000).
The above two authors set out to investigate the relationship between foreign aid economic policy and growth of per capital GDP using a new database on foreign aid, that had just been developed by the World Bank. They run a number of regressions in which the dependent variable of growth rates in developing Countries depends on initial per capital national income, an index that measures institutional and policy distortions; foreign aid and problems that aid interacted by policies. To avoid the problems that aid and growth may be correlated over periods of a few years, but not on year to year basis, they divided their sample into six four-year time periods, running from 1970-1973 to 1990-1993. In certain specifications, they also include variables for ethnic fractionalization, whether assassinations occurred, dummy variables for certain regions and even a measure of arms imports. In many of their specifications, they found the interaction term between foreign aid and good policy to be significantly positive; and they summarized that, “aid has a positive impact on growth in developing Countries with good fiscal, monetary and trade policies, but has little effect in the presence of poor policies.”
The paper has become a healthy stimulus to further research; and their paper had been the basic of a policy recommendation to increase foreign aid, if only other policies are good. International and agencies soon began to mention the results of burn side and Dollar (2000). A white paper from the British department for international Development (2000) argued, based on the working paper that “Development assistance can contribute to poverty reduction in Countries pursuing sound policies.” The Canadian International Development Agency (CIDA) put out a draft policy paper in June 2001, that compelling evidence that good governance and sound policy environment are the most important determinants of aid effectiveness.”
The issues of the effectiveness of foreign aid heated up in the weeks before a U.N Conference called “Financing for Development”; held in Mexico, in March 2002. In the run up to this conference, there was a major debate about whether to increase foreign aid. The burnside and Dollar (2000) paper was often invoked, either explicitly or implicitly in this debate. At present, the centre of gravity of expect opinion seems to settle around a slightly less optimistic thesis propagated by world Bank economist David Dollar, A Craig Burnside and Paul Collier: Aid can help, but it should be contracted on Countries with good macroeconomic policy and governments genuinely committed to improving public services and infrastructure, and stamping out corruption.
Estimates by Mr. Dollar and Mr. Burnside suggest that I percent of gross domestic product in aid given to a poor but well managed Country can increase its growth rate by a sustained 0.5 percentage points.
THE IMPACT OF FOREIGN AIDS ON ECONOMIC GROWTH
Determining what role, if any, foreign aids has played in promoting growth and development is difficult for many reasons.
First, the dynamics propelling material and social progress are extremely complex historical process and are influenced by many factors some possibly remaining unidentified only one of which is foreign assistance.
Second, a great many social and economic trends, may occur together with the flow of foreign assistance, which makes determining causality elusive.
Third, there is no clear and universally accepted research efforts designed to determine the role of foreign aid or any other factor are problematic; for example less than a tenth of the low-income populations of Asia, Africa, and Latin America live in Countries with reasonably complete vital statistics, much less economic accounts.
A broad review of the literature on development suggests that foreign aids in the best of circumstances will play only a modest role in promoting human welfare. Other factors, such as the quality of developing Country’s government and economic policies it pursues; appears to be considerably more important in promoting growth and development than the quantity, quality or type of foreign and the Country receives. In fact how successful foreign aid is in promoting growth depends crucially on those “background conditions.” Although foreign aid overall appears to have only a marginal effect it may promote or hinder development depending on the environment in which that aid is used and the conditions under which it is given. Aids given to Countries that are well governed and have adopted market oriented economic policies may provide a boost to their development. Conversely, aids given to Countries that have been governed poorly or have employed restrictive economic policies is less likely to make a positive contribution to their development. In addition, the terms and conditions under which donors give foreign assistance will affect its utility in both of those circumstances. More assistance is not always effective, too much foreign and may overwhelm a Country’s overall effectiveness. Yet even a small quantity can be useful in achieving results, depending on its purpose and how it is spent. Essentially, foreign and given to developing Countries reinforces what is there. If a Country has good government and economic policies, the result is likely to be more good government and economic policies. If a Country has a highly corrupt political system and has pursued counterproductive economic policies, the result is usually more the same. That is not to say that foreign and never benefits a Country that is pursuing counterproductive economic policies. For example child immunization programs, are likely to benefit a developing Country regardless of its economic policies.
The way donors give foreign assistance may also influence its usefulness in promoting economic and social development. For example, aid may be given to alternative the effects of natural disasters, protect the donor nations political and strategic interests; or increase the donor’s exports. But when aid is given to achieve more than one objective, it may not be as useful to the recipients growth and development. In addition, other economic or trade policies sometimes undermines the developmental goals of a donor’s foreign assistance program. An extreme example is when the U.S set up quotas on textile imports from Bangladesh shortly after providing foreign aid. Again Aids for different purposes of course, will probably have different effects on development. Assistance designed to foster economic reforms or improve production methods is likely to have a greater impact on development than military assistance which aims to build stronger arms forces in the recipient Country.
CONDITIONALITY IN FOREIGN AIDS
Aids agencies often place conditions on loans and aid. These conditions typically include microeconomic stability (Low budget deficit, and inflation), non-interference with market pricing, privatization of state-owned enterprises and opens to international trade. However, the agencies often provide additional future loans with little regards for the performance of previous loans. This problem arises for both the World Bank and the International Monetary Fund. The IFM likes to stress that is not an aid agency. However in low-income Countries, especially in Africa equivalent to delivering aid to these Countries. A common reason for to be given even after conditions are violated is that with high political instability, a new instability, a new government took power and was given a clean slate by aids agencies. The attempt to foster “Structural adjustment,” including “Structural reforms” such as removing price controls and macroeconomic “adjustments” such as reducing budget deficits, in the developing Countries in the 1980s and 1990s was about directing and money selectively to Countries that met conditions of having good policies. The new selectivity is supposed to be about rewarding Countries that reforms on their own, in Contrast to structural adjustment that is now alleged to have been imposed reforms on Countries. In both cases aid and concessional loans are selectively available to Countries that meet conditions, so if any practical difference exists, it is extremely subtle. For example, in 2002, a World Bank task force made recommendations on how to direct aid states convulsed by predatory autocrats and corruption. In other words, a nation will selectively receive aid if it is a “good performer.” Unless it is a bad performer, in which case it will receive aid from the “bad performer” fund. In these circumstances the imposition of conditions is no more than a wistful hope, rather than a policy with consequences.
EVALUATION OF FOREIGN AIDS
Despite the potential benefits of learning from the past experience aid agencies seem reluctant to promote honest evaluations that could lead to publicity about failures. Aid agencies typically give low priority to evaluating projects after completion. The World Bank reviews only 5 percent of its loans after three to ten years following the last disbursement for development impact (Meltzer Commission, 2000). Even the evaluation are based on self evaluations by staff in charge of the original projects and their implementing agencies and reviewed by management. The world Bank has done surveys of borrowing governments since the mid – 1990s on how the bank has performed from the governments point of view, but the bank has declined to make these surveys public and there seems to be little mechanism for having managers to learn from them (Wade zoo). Not only the world Bank can be taken to have no good evaluation records, but even other development agencies for example NGOs and some of the U.N agencies. U.N agencies working on development issues do not have a stellar record, they often appear to spend most of their energies on large international summits that accomplish little beside preparing for further summit. Increasing evaluation of and agencies need especially not be especially costly. In most cases, it may involve little more than specifying concrete and measurable objectives (Not the dispersal of money) in advance. In particular and agencies have almost never engaged in controlled experiments of particular interventions, despite the small amounts required relative to loan volume. The development literature has increasingly stressed scientific evaluation of interventions through, despite the small amounts required relative to loan volume.
The development literature has increasingly stressed scientific evaluation of interventions through controlled experiments. Perhaps and agencies should collectively agree to an “Evaluation compact” in which they all agree to an independent evaluation of their effectiveness.
The results of such evaluations could shed light on what makes and institutions work well or less well, a subject on which there is little knowledge after five decades of foreign aids.
REALISTIC VISION FOR FOREIGN AID
How to achieve a beneficial aggregate impact of foreign aids remains a puzzle. Aids agencies should set more modest objectives than expecting aids to “Launch the take off into self sustained growth” Aid agencies have misspent much effort looking for the next big idea that would enable aid to buy growth. Poor nation include an credible variety of institutions, cultures and histories :- millennia old civilizations in gigantic China and India Africa nations convulsed by centuries of the slave trade, colonialism arbitrary borders tropical diseases and local despots; Latin America nations with two centuries of independence and five centuries of extreme inequality; Islamic civilization with a long history of technical advanced relative to the west and then falling behind and recently created nations like tiny East Timor the idea of aggregating all this diversity into a “developing world” that will “take off” with foreign aid is a heroic simplification there is no next big idea that will make the small amount of foreign and the catalyst for growth of the world’s poor nations the goal of having the high income people make some kind of transfer to very poor people remain worthy one despite the disappointments of the past. But the appropriate goal of foreign and is neither to move as much money as politically possible or to foster society wide transformation from poverty to wealth the goal is simply to benefit some poor people remain worthy one, despite the disappointments of the past. But the appropriate goal of foreign aid is neither to move as much as politically possible, nor to foster society wide transformation from poverty to wealth. The goal is simply to benefit some poor people some of the time. In any case, improving quality of aid should come before increasing quantity. This step is difficult but not impossible.
CONCLUSION
It is not a bad thing for people having higher incomes to contribute part of their wealth to enable the poor people to get out of poverty. Though it is not a sin to accept foreign aid, this should be noted that, for sustainable economic development to be realized among the poor nations; these nations should recognize that there is more to achieve development than looking to foreign aids for solutions to our problems. Preoccupation to a greater extend to foreign aid has been largely ineffective in helping the poor nations, achieve sustainable development. The poor nations particularly Africa should now start to focus inward and joint the efforts together, politically exploit both their human capital, social capital, as well natural resources, with one stronger voice in the global economic. To remedy the epidemic of poverty in poor nations, the following are suggestive strategies:-
Poor nations working together in enlightened self-interest to meet domestic needs; and global challenges.
Reflecting indigenous values, cultures, and environmental issues; state policies and programs instead of the indiscriminate adoption and cheap mimicry of Western practices and paradigms that have little practices and paradigms that have little or no relevance to the poor Nations social cultural conditions and necessities.
Minimizing opportunism, rent-seeking, and bad governance, by establishing constitutionally limited governments and economic systems, through well-structured democratic sets of rules (Constitution) that reflect and protect the interest of all stakeholders.
Paying more attention to the human dimensions and issues associated with immediate needs of survival and development.
Working seriously and with a more unified front to reduce poor nations crippling debts through effective negotiation with western-controlled, multilateral, financial institutions and banks.
Adopting new strategies for collective industrialization among poor nations.
Developing new values and attitudes about nationalism, patriotism, ethnic and religions pluralism, political tolerance, gender equity, good governance, effective leadership, accountability and so on.
The need for the Western governments and the institutions they control to do their part to improve the unfair global trade and financial structures, and reduce the crippling debt burden on poor nations.
REFERENCE:
Journal of economic perspectives - volume 17, number 3 - summer 2003 – pages 23-48.
the role of foreign aids in development may 1997, document prepared by Kathryn quattrone.
Okechukwn Ukaga and Osita G. Afoaku; Sustainable development in Africa, Africa world press, Inc. P.O.BOX 48 Asmara, Eritria; 2005
This journal on foreign Aids is set-up to discuss on the impact of foreign aids in relation to economic growth of the recipient countries moreless Asia, Latin America and Africa. The journal will also re-visit literatures and empirical will reviews provided by prominent world Bank and other renounced economic researchers. The journal will further cover some of the following important sub-topics:-
Definition of foreign Aids
Literature and Empirical Reviews done by Burnside and Dollar (2000)
Impact of foreign Aids on Economic Growth
Conditionally in foreign Aids
Evaluation of foreign Aids
Realistic vision for foreign Aids
Conclusion based on lessons learned and my own views and opinions.
DEFINITION OF FOREIGN AIDS
Foreign Aid, consists of economic or military assistance that one Country gives to help another. Many Countries give foreign aid, including Japan, Great Britain, and the U.S; and much of these foreign aids are extended to poor nations.
Foreign aid can take many forms, including donations of money, goods, services, and technical expertise. Foreign aid can be bilateral, which means it is given by one Country bilateral, which means it is given by one Country to another. It can also be multilateral that is given by a group of Countries. The term foreign aid is also sometimes used to describe assistance given to a Country by a private organization in another Country.
Basing on Burnside and Dollar (2000) paper, foreign aid is the “grant element of aid, excluding the loan component of concessional loans, which are made at extremely low interest rates. The (OECD) organization for economic cooperation and development; defined foreign aid as “Official development assistance which consist of loans, grants that one government or multilateral organizations gives to developing Countries to promote economic development and welfare” the assistance must be granted on concessional terms, which in the case of case of loan means that at least 25 percent of it must be in the form of a grant. Data on officially development assistance also include technical co-operation, such as teaching farmers new techniques or providing advice on marking economic reforms; they exclude military assistance, political development programs, export credits, and debts forgiveness for military loans.
For the sake of a broader definition, the foreign assistance is considered as all money classified as official development assistance. These includes military assistance, political development programs, export promotion, debt forgiveness, and non concessional lending by all bilateral and multilateral organizations. any money that benefits a developing Country-grants, concessional loans or non-concessional loans, from a governmental or quasi-governmental organization is considered of credit from the International Monetary Fund (IMF), which is excluded unless otherwise noted. NB – Aid give for different purposes of, course will probably have different effects on development for example assistance designed to foster economic reforms or improve production methods is likely to have a greater impact on development growth than military assistance.
LITRATURE AND IMPERICAL REVIEWS-DONE BY BURNSIDE
AND DOLLAR (2000).
The above two authors set out to investigate the relationship between foreign aid economic policy and growth of per capital GDP using a new database on foreign aid, that had just been developed by the World Bank. They run a number of regressions in which the dependent variable of growth rates in developing Countries depends on initial per capital national income, an index that measures institutional and policy distortions; foreign aid and problems that aid interacted by policies. To avoid the problems that aid and growth may be correlated over periods of a few years, but not on year to year basis, they divided their sample into six four-year time periods, running from 1970-1973 to 1990-1993. In certain specifications, they also include variables for ethnic fractionalization, whether assassinations occurred, dummy variables for certain regions and even a measure of arms imports. In many of their specifications, they found the interaction term between foreign aid and good policy to be significantly positive; and they summarized that, “aid has a positive impact on growth in developing Countries with good fiscal, monetary and trade policies, but has little effect in the presence of poor policies.”
The paper has become a healthy stimulus to further research; and their paper had been the basic of a policy recommendation to increase foreign aid, if only other policies are good. International and agencies soon began to mention the results of burn side and Dollar (2000). A white paper from the British department for international Development (2000) argued, based on the working paper that “Development assistance can contribute to poverty reduction in Countries pursuing sound policies.” The Canadian International Development Agency (CIDA) put out a draft policy paper in June 2001, that compelling evidence that good governance and sound policy environment are the most important determinants of aid effectiveness.”
The issues of the effectiveness of foreign aid heated up in the weeks before a U.N Conference called “Financing for Development”; held in Mexico, in March 2002. In the run up to this conference, there was a major debate about whether to increase foreign aid. The burnside and Dollar (2000) paper was often invoked, either explicitly or implicitly in this debate. At present, the centre of gravity of expect opinion seems to settle around a slightly less optimistic thesis propagated by world Bank economist David Dollar, A Craig Burnside and Paul Collier: Aid can help, but it should be contracted on Countries with good macroeconomic policy and governments genuinely committed to improving public services and infrastructure, and stamping out corruption.
Estimates by Mr. Dollar and Mr. Burnside suggest that I percent of gross domestic product in aid given to a poor but well managed Country can increase its growth rate by a sustained 0.5 percentage points.
THE IMPACT OF FOREIGN AIDS ON ECONOMIC GROWTH
Determining what role, if any, foreign aids has played in promoting growth and development is difficult for many reasons.
First, the dynamics propelling material and social progress are extremely complex historical process and are influenced by many factors some possibly remaining unidentified only one of which is foreign assistance.
Second, a great many social and economic trends, may occur together with the flow of foreign assistance, which makes determining causality elusive.
Third, there is no clear and universally accepted research efforts designed to determine the role of foreign aid or any other factor are problematic; for example less than a tenth of the low-income populations of Asia, Africa, and Latin America live in Countries with reasonably complete vital statistics, much less economic accounts.
A broad review of the literature on development suggests that foreign aids in the best of circumstances will play only a modest role in promoting human welfare. Other factors, such as the quality of developing Country’s government and economic policies it pursues; appears to be considerably more important in promoting growth and development than the quantity, quality or type of foreign and the Country receives. In fact how successful foreign aid is in promoting growth depends crucially on those “background conditions.” Although foreign aid overall appears to have only a marginal effect it may promote or hinder development depending on the environment in which that aid is used and the conditions under which it is given. Aids given to Countries that are well governed and have adopted market oriented economic policies may provide a boost to their development. Conversely, aids given to Countries that have been governed poorly or have employed restrictive economic policies is less likely to make a positive contribution to their development. In addition, the terms and conditions under which donors give foreign assistance will affect its utility in both of those circumstances. More assistance is not always effective, too much foreign and may overwhelm a Country’s overall effectiveness. Yet even a small quantity can be useful in achieving results, depending on its purpose and how it is spent. Essentially, foreign and given to developing Countries reinforces what is there. If a Country has good government and economic policies, the result is likely to be more good government and economic policies. If a Country has a highly corrupt political system and has pursued counterproductive economic policies, the result is usually more the same. That is not to say that foreign and never benefits a Country that is pursuing counterproductive economic policies. For example child immunization programs, are likely to benefit a developing Country regardless of its economic policies.
The way donors give foreign assistance may also influence its usefulness in promoting economic and social development. For example, aid may be given to alternative the effects of natural disasters, protect the donor nations political and strategic interests; or increase the donor’s exports. But when aid is given to achieve more than one objective, it may not be as useful to the recipients growth and development. In addition, other economic or trade policies sometimes undermines the developmental goals of a donor’s foreign assistance program. An extreme example is when the U.S set up quotas on textile imports from Bangladesh shortly after providing foreign aid. Again Aids for different purposes of course, will probably have different effects on development. Assistance designed to foster economic reforms or improve production methods is likely to have a greater impact on development than military assistance which aims to build stronger arms forces in the recipient Country.
CONDITIONALITY IN FOREIGN AIDS
Aids agencies often place conditions on loans and aid. These conditions typically include microeconomic stability (Low budget deficit, and inflation), non-interference with market pricing, privatization of state-owned enterprises and opens to international trade. However, the agencies often provide additional future loans with little regards for the performance of previous loans. This problem arises for both the World Bank and the International Monetary Fund. The IFM likes to stress that is not an aid agency. However in low-income Countries, especially in Africa equivalent to delivering aid to these Countries. A common reason for to be given even after conditions are violated is that with high political instability, a new instability, a new government took power and was given a clean slate by aids agencies. The attempt to foster “Structural adjustment,” including “Structural reforms” such as removing price controls and macroeconomic “adjustments” such as reducing budget deficits, in the developing Countries in the 1980s and 1990s was about directing and money selectively to Countries that met conditions of having good policies. The new selectivity is supposed to be about rewarding Countries that reforms on their own, in Contrast to structural adjustment that is now alleged to have been imposed reforms on Countries. In both cases aid and concessional loans are selectively available to Countries that meet conditions, so if any practical difference exists, it is extremely subtle. For example, in 2002, a World Bank task force made recommendations on how to direct aid states convulsed by predatory autocrats and corruption. In other words, a nation will selectively receive aid if it is a “good performer.” Unless it is a bad performer, in which case it will receive aid from the “bad performer” fund. In these circumstances the imposition of conditions is no more than a wistful hope, rather than a policy with consequences.
EVALUATION OF FOREIGN AIDS
Despite the potential benefits of learning from the past experience aid agencies seem reluctant to promote honest evaluations that could lead to publicity about failures. Aid agencies typically give low priority to evaluating projects after completion. The World Bank reviews only 5 percent of its loans after three to ten years following the last disbursement for development impact (Meltzer Commission, 2000). Even the evaluation are based on self evaluations by staff in charge of the original projects and their implementing agencies and reviewed by management. The world Bank has done surveys of borrowing governments since the mid – 1990s on how the bank has performed from the governments point of view, but the bank has declined to make these surveys public and there seems to be little mechanism for having managers to learn from them (Wade zoo). Not only the world Bank can be taken to have no good evaluation records, but even other development agencies for example NGOs and some of the U.N agencies. U.N agencies working on development issues do not have a stellar record, they often appear to spend most of their energies on large international summits that accomplish little beside preparing for further summit. Increasing evaluation of and agencies need especially not be especially costly. In most cases, it may involve little more than specifying concrete and measurable objectives (Not the dispersal of money) in advance. In particular and agencies have almost never engaged in controlled experiments of particular interventions, despite the small amounts required relative to loan volume. The development literature has increasingly stressed scientific evaluation of interventions through, despite the small amounts required relative to loan volume.
The development literature has increasingly stressed scientific evaluation of interventions through controlled experiments. Perhaps and agencies should collectively agree to an “Evaluation compact” in which they all agree to an independent evaluation of their effectiveness.
The results of such evaluations could shed light on what makes and institutions work well or less well, a subject on which there is little knowledge after five decades of foreign aids.
REALISTIC VISION FOR FOREIGN AID
How to achieve a beneficial aggregate impact of foreign aids remains a puzzle. Aids agencies should set more modest objectives than expecting aids to “Launch the take off into self sustained growth” Aid agencies have misspent much effort looking for the next big idea that would enable aid to buy growth. Poor nation include an credible variety of institutions, cultures and histories :- millennia old civilizations in gigantic China and India Africa nations convulsed by centuries of the slave trade, colonialism arbitrary borders tropical diseases and local despots; Latin America nations with two centuries of independence and five centuries of extreme inequality; Islamic civilization with a long history of technical advanced relative to the west and then falling behind and recently created nations like tiny East Timor the idea of aggregating all this diversity into a “developing world” that will “take off” with foreign aid is a heroic simplification there is no next big idea that will make the small amount of foreign and the catalyst for growth of the world’s poor nations the goal of having the high income people make some kind of transfer to very poor people remain worthy one despite the disappointments of the past. But the appropriate goal of foreign and is neither to move as much money as politically possible or to foster society wide transformation from poverty to wealth the goal is simply to benefit some poor people remain worthy one, despite the disappointments of the past. But the appropriate goal of foreign aid is neither to move as much as politically possible, nor to foster society wide transformation from poverty to wealth. The goal is simply to benefit some poor people some of the time. In any case, improving quality of aid should come before increasing quantity. This step is difficult but not impossible.
CONCLUSION
It is not a bad thing for people having higher incomes to contribute part of their wealth to enable the poor people to get out of poverty. Though it is not a sin to accept foreign aid, this should be noted that, for sustainable economic development to be realized among the poor nations; these nations should recognize that there is more to achieve development than looking to foreign aids for solutions to our problems. Preoccupation to a greater extend to foreign aid has been largely ineffective in helping the poor nations, achieve sustainable development. The poor nations particularly Africa should now start to focus inward and joint the efforts together, politically exploit both their human capital, social capital, as well natural resources, with one stronger voice in the global economic. To remedy the epidemic of poverty in poor nations, the following are suggestive strategies:-
Poor nations working together in enlightened self-interest to meet domestic needs; and global challenges.
Reflecting indigenous values, cultures, and environmental issues; state policies and programs instead of the indiscriminate adoption and cheap mimicry of Western practices and paradigms that have little practices and paradigms that have little or no relevance to the poor Nations social cultural conditions and necessities.
Minimizing opportunism, rent-seeking, and bad governance, by establishing constitutionally limited governments and economic systems, through well-structured democratic sets of rules (Constitution) that reflect and protect the interest of all stakeholders.
Paying more attention to the human dimensions and issues associated with immediate needs of survival and development.
Working seriously and with a more unified front to reduce poor nations crippling debts through effective negotiation with western-controlled, multilateral, financial institutions and banks.
Adopting new strategies for collective industrialization among poor nations.
Developing new values and attitudes about nationalism, patriotism, ethnic and religions pluralism, political tolerance, gender equity, good governance, effective leadership, accountability and so on.
The need for the Western governments and the institutions they control to do their part to improve the unfair global trade and financial structures, and reduce the crippling debt burden on poor nations.
REFERENCE:
Journal of economic perspectives - volume 17, number 3 - summer 2003 – pages 23-48.
the role of foreign aids in development may 1997, document prepared by Kathryn quattrone.
Okechukwn Ukaga and Osita G. Afoaku; Sustainable development in Africa, Africa world press, Inc. P.O.BOX 48 Asmara, Eritria; 2005
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