Tanzanian President Vrs Franklin Cudjoe on Globalisation

Following my op-ed which was carried by the Independent Institute on November 7, 2005 below, Mr. Benjamin Mkapa, President of the Republic of Tanzania wrote a rejoinder that is yet to be published. Our friends at the Independendt Institute conducted a due diligence to verify the authenticity of the rejoinder from the Tanzania Embassy in Washington.

However, I take the liberty to republish his rejoiner and a subsequent rebuttal from me which I sent to him and his Ambassador to the United States of America. Stay tuned if he replies again but I must say I'm very honoured to have an African President respond directly to stories about him. Hopefully other African leaders will follow his example. Thats when they ever read at all.


1. Op-ed

Globalization Rocks, but African Leaders Fail to Understand It
November 7, 2005
Franklin Cudjoe
http://www.independent.org/newsroom/article.asp?id=1613


"Tanzanian President Benjamin Mkapa will step down this week, complying with his constitutional term limits. He will be the third African leader in recent times to honorably leave office following the departure of Nelson Mandela of South Africa and Jerry Rawlings of my country, Ghana.

At the same time that Mkapa hands over power as required by the law, he is urging his colleagues to discard the political system and warning other African leaders to be wary of the present competitive global political and economic order because globalization threatens to “exploit, denigrate, and humiliate Africa.” But one might ask whether Africa’s problems are really caused by globalization."

2. President Mkapa's rejoinder

GLOBALISATION ROCKS, BUT AFRICAN LEADERS FAIL TO UNDERSTAND IT (NOVEMBER 7, 2005, BY FRANKLIN CUDJOE):
A REJOINDER


Political pundits and commentators come in different shades, sizes and professional integrity. With more than 30 years as a journalist before becoming a public servant, I know this for a fact! An ingenious style of commentary is where the writer selects a number of words from an array of unrelated oratories, string these together into a single sentence and attributes such a creation, out of context, to their targeted subject. This is how I view Mr. Franklin Cudjoe’s commentary dated 7th November 2005 on “Globalization Rocks, but African Leaders Fail to Understand It”.

Referring to what he calls my “honourably” leaving office at the end of my second term as President of Tanzania (as required by our Constitution), he claims it is my view and I advise fellow African leaders that globalization threatens to “exploit, denigrate and humiliate Africa”.

As an African leader committed to the fate of my fellow citizens, I have for many years (and more recently as Co-chair of the World Commission on the Social Dimension of Globalisation and as a member of the Commission for Africa), spoken on various aspects on globalization. The record is there in my various speeches over the years for all interested to view in detail and judge, [http://www.tanzania.go.tz/presidentialibraryf.html]. I will undeservedly, however, honour Mr. Cudjoe by assuming that he extracted the words “exploit, denigrate and humiliate” from the speech I made on 31st August 2005 to the African Union Commission, African Union Headquarters, Addis Ababa, Ethiopia.

Let me quote some relevant paragraphs from that speech in which those words are included and present the full case and context in which they were applied. This is important because I believe passionately in the ideas presented and pray that these would become topics of urgent and serious debate among us as Africans, the honourable ones at least.

I said, in Addis Ababa, that:

…As I prepare to leave office I should like to urge all my fellow Africans, and especially those entrusted with the leadership of our continent, to look back into our history, to evaluate the disadvantaged position we hold in today’s globalising world, and to be sufficiently agitated to design and work for a better future for our continent and its future generations.

The September 2005 issue of National Geographic does not have a glossy photograph on its cover as always. It has, instead, on a white background, the words “Africa: Whatever you thought, think again.” This exhortation to think again is directed at non-Africans. But I believe that if we want a better future for our continent, we Africans also need to think again. And we should be informed by a Chinese proverb that says, “A closed mind is like a closed book; just a block of wood.” Let us open our minds; and let us be sufficiently agitated to change Africa.

The first major exploitation, denigration and humiliation of Africa was the slave trade. This lasted almost 500 years. The second major exploitation, denigration and humiliation of Africa was colonialism which goes way back before the Berlin Conference of 1884-85. And colonialism prepared Africa for the third major phase of exploitation, denigration and humiliation that globalisation now threatens to be.

I argued further that:

In today’s world of globalisation, the economic ideas and foundation underpinning the then colonial policy still determine the extent and nature of Africa’s integration into the global economy—basically as a supplier of raw materials and extractive industry commodities, mostly unprocessed. If we want a better future for our continent and its future generations, we must be sufficiently agitated to robustly fight the manifestly unjust economic relations in a globalising world.

In today’s world of globalisation, the colonial era so-called far-reaching ideas of civilisation translate into what we now call “the cultural dimension of globalisation,” where, among other things, Western (mostly American) cultural values and ways of life predominate. They are fanned by global interconnectedness through migration and the Information and Communication Technology revolution that beams these ways of life to our living rooms and our computer screens, firing the imagination.

Secondly, we must strive to change the direction of our trade. We are too dependent on Europe and America as destinations of our exports. The European Union alone accounts for 52 per cent of Africa’s exports. The good political relations we have with Asia and Latin America are yet to translate into larger investment and trading opportunities. It is true Africa’s exports to Asia grew significantly in the 1990s. But between 1999 and 2001, only 16 per cent of Africa’s export revenues came from Asia.

I believe we need to think afresh into this strategy to ensure that we trade more with Asia and Latin America as a deliberate continental strategy to diversify our export markets and sources of investment. It is important to bear in mind that Asian markets have more complementarity with the existing supply base of traditional primary commodities that characterise our exports. The scope of value-added processing in Africa is still limited but by taking advantage of linkages with Asia, African producers and exporters could significantly benefit from expansion of traditional primary commodities…

My conclusions were:

…Firstly, I urge African leaders to think afresh about the place of our continent in a rapidly globalising world. We suffered during the slave trade, and we suffered through the colonial period, which ushered us into a global trading regime, not as equal players but as appendages of metropolitan powers. Now in the world of globalisation we find ourselves unprepared and incapacitated to play the role we envisage for ourselves as equal partners and players, and as beneficiaries. To change this unfavourable configuration, we must be prepared to strategize on how to break out of this institutional bondage that makes us almost irrelevant. In all the years I have been Foreign Minister and then President of my country, I have not seen us seriously and sufficiently strategizing on this matter. Very little time in our agenda is devoted to such matters, which ultimately will determine Africa’s place in the sun of globalisation.

Secondly, we have to restructure the content and direction of our trade and investment, finding new innovative ways to enhance South-South cooperation, as a means to develop the capacity to relate as equal partners with countries of the North.

And, thirdly, we must not be laid back, waiting for civil society in rich countries to do all the agitation and campaigning for more aid, fair trade, and debt cancellation for us. Right now they lead and we follow. We must resolve to lead, and let them follow so that they are not accused of waging a struggle with no roots and no ownership in Africa….whipping the appetites of our youth for what they believe is modernity and civilisation, which it not always is, and which for most of them is unachievable.

And in today’s world of globalisation, the colonisers’ ideas of a political and patriotic sort appear now as defence of national interests at all costs even if such interests unleash untold suffering on other people. That is why it is said, with wry humour, that it is better to live as a cow in Europe getting at least USD 2 a day, than to subsist on less than USD 1 in sub-Saharan Africa as a human being. If we want a better future for our continent and its future generations we must be sufficiently agitated to lead unrelenting initiatives to redress such an unfair global trade and economic regime…

With respect to trade which Mr. Cudjoe correctly said is important for Africa, this is what I said:

…We have to fight our insignificance in world trade, for trade, in goods and services, is the currency of globalisation. There was once even a suggestion from some quarters that most African countries should be satisfied with aid, and in return agree not to participate in WTO trade talks. The argument was that we were too insignificant as players in the global market, and a distraction when the big players talk!

The first problem with regard to trade is about size. Africa’s share of global trade is hardly 2 per cent. But it is not only about size, it is also about content. Africa’s exports are largely primary, unprocessed, commodities which account for at least 66 per cent of total exports from our continent. Africa, therefore, bears the brunt of the fickleness of commodity market prices, and frequently deteriorating terms of trade and erratic weather conditions. We also suffer from the excessive appetite of the value-adding and trading multinational corporations…

I went on to discuss the challenges African producers (NOT governments) face with regard to unstable international prices of raw agricultural produce, and the adverse consequences of the dumping of subsidised agricultural products from the developed world. I emphasised that for Africa to move forward in this respect:

...Two things are transparently necessary. First, Africa must strive harder to industrialise and venture into the service industry. Without value addition we are doomed. But, presently, I do not see us, as a continental organisation, going beyond words to strategy and action on this imperative. We speak about these injustices in meetings and conferences, but we do not aggressively develop and implement the necessary strategies to deal with them as continent.

To all my fellow Africans, including Mr. Cudjoe, the ideas above are indeed part of my hope for Africa’s future economic prosperity. We in Tanzania have (since the introduction of multiparty democracy in 1992) placed our development emphasis on implementing wide ranging economic reforms, with special focus on social and economic infrastructure, peaceful coexistence with our neighbours and peace seeking elsewhere on the continent. Our record in all of these areas is there for others to judge.

Personally, I do not have any Swiss or foreign bank accounts. Those who care to visit or seriously educate themselves on Tanzania will quickly find out that, among others, we are promoting girl-child education; we have put in place investor friendly economic policies; we are encouraging local entrepreneurship and we are investing in infrastructure.

We are busy sowing for the future and not, as Mr. Cudjoe claims, “harvesting where we have not sown”. I am proud as I leave office that Tanzania and Tanzanians no longer feel prisoners to any kind of rigid political philosophies.

From his commentary, I am not sure I can say the same about Mr. Cudjoe. There is rule of law and protection of private property in Tanzania and our parliamentarians pay for their mode of transport and accommodation as these are deducted at source from their income. Libertarians we may not be, and we make no apologies! We feel too free not to believe there is an economic system based exclusively on “Free markets” – albeit even those who invented the concept are still in search of it! Mr. Cudjoe’s misrepresentations and sweeping statements hardly move us forward on what are serious and urgent matters regarding Africa’s future. And I believe The Independent Institute, as well as Mr Cudjoe’s audience and readers deserve better!


Benjamin William Mkapa
President of the United Republic of Tanzania
07 December 2005


3. Franklin's rebuttal also sent to the Tanzanian Ambassador and the President


Many thanks for passing on this. Yes, in deed that is the President of
Tanzania. I have attached my response below as well. I think it is fair his reaction is published. It shows that some African leaders are indeed passionate about what is said of them.

However, I still will want to take issue with the quotations he rightly
said were attributed to him, which obviously does not warrant his introductory venom.
Besides, he had sort to extract himself from the many ills his counterparts have and continue to visit on their own people. Uganda, Nigeria and Kenyan Presidents are contemplating giving monstrous powers to themselves in order to prolong their stay in office. President Mkapa's
decision to leave office is in deed honorable.

I admire the President's eloquence in defending him stance but no where
in his rejoinder does he object to his own quotation “And colonialism
prepared Africa for the third major phase of exploitation, denigration
and humiliation that globalisation now threatens to be". That is my beef
with him.

He indeed, agreed with me that South-South co-operation was one of the
ways to go in order to build Africa's capacity to add value to its
primary commodities, even though he sort an escapist route to argue that
homogeneity of Africa's products, mainly raw materials is reason why we
earn peanuts from fickled world market prices.
I'm amazed when he says that I made sweeping statements when I believe
he knows that local inhibitions by way of taxes alone can dissuade
investment in manufacturing industries that will use. Ghanaian farmers for
instance have been crying for tax exemptions on agricultural machinery so they
can expand output and process some produce so they attract higher values.
I'm not privy to the taxation levels in Tanzania but could he convince
me that they are agro-industry friendly?

I agree that Western agricultural subsidies are a draw back, but does
that warrant Africans to clamour for more of it at home?
But did he address trade barriers within the continent at all? I
thought I mentioned that as well? Why can't Tanzanians buy Ghanaian chocolates
for instance? Why did Nigeria ban 96 products from Ghana when Ghana could
go into Nigeria 7 times, population wise? How open is COMESA and ECOWAS,
two trading blocs for East and Southern Africa and the West African sub
region?

Zambia's president was recently in Ghana lamenting that the annual turn
over of trade between the two countries was only $50,000. How much does
it cost to fly between both countries?

What were many African countries doing after Independence that they had
to allow a hang over from Colonialism to prepare them "for the third major
phase of exploitation, denigration and humiliation that globalisation
now threatens to be"? Could it be President Mkapa’s predecessor, Julius
Nyerere's love with Ujamaa (Tanzanian socialism) or Ghana's Nkrumah's
one-party state in the early 1960s? Did we not have to bear the brunt
of State farms and statist plans to create local champions who became
inefficient after millions, if not billions were poured into them?

Or is trade within Africa a new phenomenon that the President
intelligently dodged?

Well let's forefront our memories here. The United States Agency for
International Development estimates that 70 percent of all tariffs in
the world are erected by developing countries against other developing
countries.

The World Bank estimates that 92 per cent of the benefit to developing
countries from liberalising agricultural trade comes not from reducing
subsidies but from cutting their own tariffs.

At the height of their glory, most pre-colonial African states and empires found trade to be a more useful way to attain
prosperity than through conquests. Of course, tributes and taxes paid by vassal states
encouraged empire expansion until such time that one empire gave way to another
through conquest. But prosperity has never been a spoil of war.
Western Sudanese empires for instance exhibited the greatest form of
mercantilism.

Gold was shipped from Wangara in the Upper Niger, close to Mali, across
the Sahara desert to Taghaza, in Western Sahara, in exchange for salt
and to Egypt for ceramics, silks and other Asian and European goods; The
old Ghana empire controlled much of the trans-Sahara trade in copper and
ivory; at Great Zimbabwe gold was traded for Chinese pottery and glass;
in Nigeria, leather and iron goods were traded throughout West Africa.

Colonialism, which replaced tribal fiefdoms with protectorates and
territories, was basically resource exploitative with little or no
intention to develop the markets that had hitherto been spontaneously
created. Power and territory was the domain of Colonisers for their
resource-dependent industries that had characterized what was termed
the Industrial Revolution. As a result, infrastructural development,
primarily roads and railways, were constructed to link sources of mineral and
timber wealth with ports.

However, long after colonialism ended, Africa’s elite -- who had
promised limitless freedom for the newly independent Africa -- soon recoiled
into the statist shoes of the colonisers. They were responsible for creating
the most disparaging forms of command and control over African
societies and economies, to an extent never even imagined by the Colonial rulers.

The leaders used this system to satisfy their greed, for personal
aggrandizement. This effectively alienated a majority of individuals in
society, because they were not able to benefit from the proceeds of
their own economic activity.

I admire President Mkapa's defense of encouraging local
entrepreneurship, investing in infrastructure, the rule of law and protection of private
property in his country- the underpinnings of a free and prosperous
society Libertarians aspire to. May I add transparency too?

But juxtapose this with the World Bank's 2005 report on doing business
in Tanzania and let the readers judge for themselves. Please click on this link to see proper
arrangement of facts and figures which have been copied below
http://www.doingbusiness.org/ExploreEconomies/Default.aspx?economyid=185


Starting a Business (2005)
1. Entrepreneurs can expect to go through 13 steps to launch a business
over 35 days on average, at a cost equal to 161.3% of gross national
income (GNI) per capita. They must deposit at least 6.0% of GNI per
capita in a bank to obtain a business registration number.


2. Dealing with Licenses (2005)
The steps, time, and costs of complying with licensing and permit
requirements for ongoing operations in Tanzania are shown below. It
takes 26 steps and 313 days to complete the process, and costs 4,110.2% of
income per capita.


3. Registering Property (2005)

The ease with which businesses can secure rights to property is
measured below. In Tanzania, it takes 12 steps and 61 days to register property.
The cost to register property there is 12.2% of overall property value


4. Getting Credit (2005)
Measures on credit information sharing and the legal rights of
borrowers and lenders in Tanzania are shown below. The Legal Rights Index ranges
from 0-10, with higher scores indicating that those laws are better
designed to expand access to credit. The Credit Information Index
measures the scope, access and quality of credit information available through
public registries or private bureaus. It ranges from 0-6, with higher
values indicating that more credit information is available from a
public registry or private bureau. (More about this topic)


Indicator Tanzania Region OECD
Legal Rights Index 5 4.4 6.3
Credit Information Index 0 1.5 5.0
Public registry coverage (% adults) 0 0.8 7.5
Private bureau coverage (% adults) 0 3.5 59.0

5. Protecting Investors (2005)
The indicators below describe three dimensions of investor protection:
transparency of transactions (Extent of Disclosure Index), liability
for self-dealing (Extent of Director Liability Index), shareholders’
ability to sue officers and directors for misconduct (Ease of Shareholder Suits
Index) and Strength of Investor Protection Index. The indexes vary
between and 10, with higher values indicating greater disclosure, greater
liability of directors, greater powers of shareholders to challenge the
transaction, and better investor protection. (More about this topic)
I

ndicator Tanzania Region OECD
Disclosure Index 3 5.4 6.1
Director Liability Index 3 4.7 5.1
Shareholder Suits Index 0 5.0 6.6
Investor Protection Index 2.0 5.0 5.9




6. Paying Taxes (2005)
The effective tax that a medium size company in Tanzania must pay or
withhold within a year is shown below. Entrepreneurs there must make 48
payments, spend 248 hours, and pay 51.3% of gross profit in taxes.
(More
about this topic)
Indicator Tanzania Region OECD
Payments (number) 48 41.4 16.9
Time (hours) 248 394.0 197.2
Total tax payable (% gross profit) 51.3 58.1 45.4
7. Trading Across Borders (2005)
The costs and procedures involved in importing and exporting a
standardized shipment of goods in Tanzania are detailed under this
topic.

Every official procedure involved is recorded - starting from the final
contractual agreement between the two parties, and ending with the
delivery of the goods. (More about this topic)
Indicator Tanzania Region OECD
Documents for export (number) 7 8.5 5.3
Signatures for export (number) 10 18.9 3.2
Time for export (days) 30 48.6 12.6
Documents for import (number) 13 13.0 6.9
Signatures for import (number) 16 29.9 3.3
Time for import (days) 51 60.5 14.0



8. Enforcing Contracts (2005)
The ease or difficulty of enforcing commercial contracts in Tanzania is
measured below. It takes 21 steps and 242 days to enforce contracts
there.
The cost of enforcing contracts is 35.3% of debt. (More about this
topic)


Indicator Tanzania Region OECD
Procedures (number) 21 35.9 19.5
Time (days) 242 434.1 225.7
Cost (% of debt) 35.3 41.6 10.6



Or the president would want to dispute the above figures as well as my
President in Ghana and his Cabinet was recently divided over Ghana's
per capita income even when the World Bank appeared to be more accurate?

Stay tuned.......