Tanzania | Capitalism

Whilst many claim that the days of colonialism are over, we should not be so naive, or arrogant, to believe that this is true. Though the nations of Africa have gained their independence from their colonial overlords, a more sinister form of colonialism still exists upon the continent.

Around 10 months ago, whilst searching for employment and a positive way to spend my time, I applied forInternational Citizen Service, a wonderful opportunity to go abroad and aid poverty alleviation in some of the poorest countries in the world. I attended an interview in London, and was lucky enough to get accepted for a place withRaleigh International on a ten week project in Tanzania. I could not wait to take part, and began to research the project and the area where I was going to be visiting.

Raleigh International states that Tanzania is “one of the poorest economies in the world”, it ranks 161st out of 187 countries in a 2012 report by the International Monetary Fund. The information that was given to me by Raleigh International made for grim reading. Only 54% of people have access to improved sustainable water, in urban areas only 20% have access to sanitation, and in rural areas this number is a dangerously low 7%. Though the Tanzanian Government is committed to education, on average adults have only completed 2.7 years of schooling. “In 2010 the ratio of pupils to qualified teachers, nationwide, was 54:1″. 7.6% of children die before they reach the age of five, diarrhoea, hepatitis A and typhoid are common and around 3.5% of the population carry HIV or AIDS. Half of the nations hospital beds are occupied by someone suffering from these conditions. There is only one physician for every 50,000 people, and unsurprisingly the life expectancy is in the mid fifties, well below the world average. Malaria is prevalent across the country as well and responsible for up to 100,000 deaths a year. More than a third of households live on less than $1 dollar a day and about 90% of the population live in impoverished rural areas.

It is clear that Tanzania is an incredibly poor country, with major problems relating to health, disease and education. Unfortunately I was unable to participate on the ten week voluntary placement, and had to withdraw. However, this did not stop me from researching Tanzania further, and what I found did not seem to correlate with the terrible poverty in the country.

Despite all of Tanzania’s problems, it is a wealthy country. Though the poverty issues may point to it being a poor, remote African state with very little going for it, this is not the case. In fact Tanzania has vast amounts of mineral and natural resources. It has fairly significant reserves of natural gas, positioned at 84th in an Aneki global ranking, sandwiched in between France at 83 and Turkey at 85. As well as having an abundance of gold. Tanzania is the 16th wealthiest country in the world, in terms of gold, and is Africa’s “third-largest gold-producing country after South Africa and Ghana”. Diamonds are also present in Tanzania, with a report in May 2013 stating that “Tanzania has enough diamond supply for the next 50 years”. On top of this Tanzania also has access to coal, iron, uranium, nickel, tin, platinum and a host of other minerals. The precious stone Tanzanite, as it’s name suggests, is also found in Tanzania.

What then has gone wrong? Why is a country so blessed with natural resources and minerals, as poor as it is? Some may argue that it is a “resource curse”, also known as the “paradox of plenty”, whereby countries with an abundance of non-renewable resources achieve worse growth and economic development than those with less resources. Many theories have been put forward as to why this is may be, corruption, conflict, taxation, but I think the most obvious reason is that the country is suffering from a form of capitalist colonialism. That is to say that foreign businesses are operating in the country and removing the resources, thus denying wealth to the country and it’s people.

Though British rule in Tanzania ended in 1961, British interests did not. Other nations hold similar interests in the mineral rich African country. In March 2012, The Norwegian company Statoil, and the American multinational Exxon Mobilmade the largest discovery yet of gas reserves off the coast of Tanzania. In 1999 BAE Systems set up a sham arrangement to sell an overly-priced, and overly-complex, air-traffic control system. Bauxite is being mined illegallyin Mount Shengena, and Human Rights Watch has reported that child labour and sexual abuse are common in gold mines. A brilliant article by Vice, in 2013, highlights an IPPMedia report where it states that “major foreign gold mining companies earned $6.967bn  between 2009 and 2012 … but paid the Tanzanian government corporation tax amounting to only $280 million”.

A report by the Tanzania chapter of the Extractive Industries Transparency Initiative (T-EITI) “shows that only two out of the six major gold mining companies in Tanzania have started to pay corporate tax”. An earlier report carried out in June 2012 asks the question, “how can Tanzania stop losing so much tax revenue?” Within this it states that “corporations have deprived Tanzania of an average of $288 million a year”, with mining companies paying taxes that amount to “less than 7 per cent of the value of mineral exports”. As well as this, illicit capital flows from Tanzania could amount to as much as $660 million a year, “One expert working on this issue in Tanzania estimates that such flows could be close to $1 billion a year”.

This then is the reality of Tanzania’s situation. It should not be such a poor, poverty stricken African country, having to rely on international aid in order to overcome its problems. The resources are available, as is the wealth, but it is stolen from those that own it, and need it most. Through loopholes in laws, tax avoidance, corruption and illicit capital flows, the people of Tanzania are being deprived of hundreds of millions of dollars each year. Though charities such as Raleigh InternationalUnicef and Concern Worldwide, to name but a few, do wonderful, and much needed work in the country, you have to ask, would their presence be as necessary if the country was not being plundered by businesses in the first place?

In order to fully overcome and alleviate poverty I believe you have to get to its root cause, and the root cause here is the rampant exploitation by foreign businesses. Colonialist oppressors no longer wear pith helmets and carry guns, they wear suits and carry briefcases. The Scramble for Africa is alive and well, only this time multi national corporations are the participants, rather than European nations. Until this capitalist colonialism is addressed, those countries classified as “third world” will remain just that. It is only with self determination, and ownership of its own resources, that Tanzania can become truly independent, and improve the standard of life of its people

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