Resource information
This paper tells a story about
conditions in Tanzania's hidden economy, the parts of
the natural resource sector often ignored in conventional
economic analyses and studies, and makes recommendations for
future policy actions. The paper draws primarily from
extensive background studies undertaken of the forestry,
fishery, wildlife, mining, and tourism sub sectors (COWI
2005) as well as a wide range of complementary studies
undertaken by the World Bank and others. It de-emphasizes
those sectors with factors of production that are not
readily traded or exported (such as land and water),
although some examples are given relating to soil quality
and water management based on extensive studies undertaken
within the agriculture and water sectors. The story is
relatively simple: pricing distortions, coupled with
institutional weakness and the lack of rule of law, have
created an environment that undermines economic growth. This
paper also acknowledges that Tanzania has already taken
positive steps to making some of the needed corrections to
protect its natural resources. In recent analyses of
corruption indicators world-wide (World Bank Institute
2006), Tanzanian stands out among those nations as having
made significant progress towards improving accountability
and reducing economic leakages. Anti-corruption legislation
was drafted for parliament attention in early 2007.
Revisions to the Deep Sea Fishing Authority Act were passed
into law in early 2007. Moreover, changes in institutional
arrangements, taxation, and general management of the
resource sector show promise and have contributed positively
to general economic growth. Yet, the sector remains fragile
and vulnerable in other respects: perceptions of unequal
income distribution, impacts of climate change, and other
external influences must also be addressed to build on past successes.
