A FRAMEWORK FOR DESIGNING A STRATEGY FOR GROWTH AND DEVELOPMENT

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A FRAMEWORK FOR DESIGNING A STRATEGY FOR GROWTH
AND DEVELOPMENT

• Professor Joseph Semboja
• Executive Director
• REPOA

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INTRODUCTION

• Importance of equitable growth is recognised for
  development see Vision 2025, MKUKUTA, Mini-tiger
  plan,..
• Current growth trends high but not adequate to
  achieve income poverty targets of Vision 2025
  and the MDG
• Therefore, need to develop strategy for
  accelerating and sustaining growth

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OUTLINE OF THIS PRESENTATION

• Makes the case ( gives rationale) for an
  overriding coherent strategy that provides
  direction for resource mobilization and
  concentration of efforts
• Outlines criteria for identification of growth
  drivers
• Discusses enabling support that may be needed in
  implementing the chosen strategy

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RATIONALE FOR A NEW STRATEGY

• Resources are limited need to determine a clear
  direction for concentration of efforts targeting
  activities and key actors for capacity building
  
• Need for
• alignment and consistency of different policies
  and strategies
• Focus on interventions that show strong synergies
  between themselves and signals to other actors
• Focus on high pay-off policies and actions
  (scale, employment, poverty reduction)

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DEVELOPING A STRATEGY

• First requirement an agreed development vision.
  Vision 2025 exists.
• Then, interpretation of the Vision
• by linking available resources and markets to
  identify the countrys growth drivers
• Tanzania is part of the global environment, as a
  market and a production centre. Therefore growth
  drivers must be based on the countrys
  comparative/competitive advantages

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Determining Comparative and Competitive Advantage

• Comparative Advantage
• ability to produce (domestically) and deliver
• (to markets-local and global) relatively cheaply
  
• based on naturally available resources
• Competitive Advantage-
• not based on naturally available resources.
  Rather on elements of competitiveness such as
  productivity, quality, diversity and innovation
  that arise from accumulation of new and more
  sophisticated set of resources. This requires
  medium and long term development of capacity in a
  country .

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Implications

• In the short to medium term Tanzania may need to
  
• focus on comparative advantage, as we strive to
  develop areas of competitive advantage in the
  future
• The countrys comparative advantage is derived
  from its natural resource base namely, from its
• strategic location (transport and logistics),
• geological (minerals) resources
• ecological (horticulture) conditions, and
• bio-diversity and landscape (tourism)

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Implications of Comparative Advantages

• Comparative advantage not derived from
• Cheap labour- due to low productivity levels.
  Hence human resource can not be a source of
  comparative advantage
• Extensive agricultural land- agriculture is no
  longer driven by land and unskilled labour
  rather by knowledge and innovation a reminder
  that comparative advantage is a dynamic concept-
  can be gained and lost
• Manufacturing- has always been driven by
  knowledge and innovation

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Criteria for Selecting Growth Drivers

• Criteria (once areas of comparative advantage
  have been identified) include
• High pay-off in terms scale, job creation and
  poverty reduction
• Strong synergies and complementarity
  (reinforcement) with each other and with the
  other sectors
• Potential for developing competitive advantage in
  the medium term. Geographical location is a good
  example- short to medium term targets landlocked
  neighbours and links with other sectors medium
  to long term linkage with the rest of the global
  market especially Asia and the Middle East

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Policy Implications

• May lead to concentration or clustering of
  investments in specific geographical areas.This
  is not bad for growth large concentrated
  investments lead to high aggregate employment,
  income and spending selective growth pole
  policy is good for pro-poor growth as people
  follow opportunities
• The enabling policy environment needs to be more
  specific to address identified constraints to the
  chosen growth drivers in addition to overall
  enabling environment, there may be need for
  selective protection or strategic choices of
  social services and investment (beyond basic
  provision) to reinforce the drivers of growth
• Sound analytical and technical inputs are needed
  to drive the development of a clear growth
  strategy strong political signals in favour of
  an analytically driven growth agenda have to be
  given

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CONCLUDING REMARKS

• The presentation aims to initiate discussions it
  proposes a framework not conclusions more work
  needs to be done, especially in the selection of
  growth drivers
• The presentation recognises that all sectors of
  the economy matter for growth. However, there is
  a difference between growth drivers and
  complementary growth areas
• The choice of appropriate growth drivers is
  likely to shift the discussions away from
  sector-based to multi-sector based away from
  short term to long term benefits
• Remember comparative advantages can be gained
  and lost