Tanzania: Top Economies Borrowed Arusha Declaration Philosophy

BY ABDUEL ELINAZA, 21 MAY 2013

THE Arusha Declaration, whose principles on the economy are largely considered outdated, can not be written off completely as its tenets proved useful in dealing with the global financial crisis of the 2008, a Tanzanian economist has cautioned.

Dr Honest Ngowi of the Mzumbe University, Dar es Salaam Business School says in his new book that most of the world's top economies borrowed a leaf from the document whose proclamation in 1967 ushered in socialist policies in Tanzania. "Different countries took several measures after deterioration of the economy from the last quarter of 2008.

The major efforts undertaken are in line with doctrines of the Arusha Declaration and the teachings of the economist, John Keynes," Dr Ngowi says in his book titled "The Economic Crisis of the 2000's and Beyond," that was launched in Dar es Salaam last week.

The book traces the economic crisis in the last four years which started in the US before spreading globally and according to the academic, the globe has not completely recovered from the crisis.

The Arusha Declaration doctrine conforms to the Keynesian school of thought that calls for government intervention to the economy because of inadequacy and unreliability of the market forces.

Dr Ngowi said Tanzania founding president, Julius Nyerere who was the architect of Arusha Declaration, was a follower of Lord John Maynard Keynes, the founder of Keynesian school of thought. "During financial turbulence in capitalism, many countries, even the capitalist ones, reverted to and embraced Arusha Declaration philosophy to avert the crisis," he says in the book.

"These have been evident endeavours undertaken by different countries to tackle the economic crisis and its effects. Among those are mastermind of capitalism in the world led by US. Many countries...were left with no option but to buy shares and even nationalise companies, especially banks and other financial institutions.

They have to bailed out banks, lest they collapse," the book titled "The Economic Crisis of 2000s and Beyond: Analysis and Perspectives in the Tanzanian Context," shows. The author elaborates how big economies such as China and US offered programmes to boost labour and purchases incentive as a way to push up supply and demand when private sector dodging it.