Globalization as the International Poverty Trap
As I explained earlier in a problem statement on previously chapter, I would like to elaborate more on fundamental issues described on problem statement by considering not only Tanzania but also the all least developed countries (LDC).
There is an international poverty trap but this does not necessarily mean that globalization is causing chronic poverty. Globalization, in putting chronic poverty into a global context it also becomes necessary to understand how the current form of globalization is affecting these international relationships.
This is quite a complex issue. But there are good reasons to believe that, although international economic relationships can play a key role in helping Tanzania and other LDCs to break out of economic stagnation and generalized poverty within which they are caught, the current form of globalization is actually tightening rather than loosening the international poverty trap. The reason is that most LDCs are being bypassed by potentially beneficial aspects of globalization of production systems, finance and markets, at the same time as being exposed to certain negative aspects.
In terms of access to foreign markets, it is difficult for LDCs to benefit from the opening of other markets as production and supply capabilities are weak. Whilst many of the LDCs are not benefiting from these potential positive effects of globalization, they are experiencing some negative effects. In this regard, two points are worth highlighting.
Firstly, recent changes in the structure of global commodity markets are reinforcing the cycle of economic stagnation and pervasive poverty. This is because they are leading to higher marketing margins between producers and consumers and greater commodity price instability. They are also increasing the probability of LDC commodity producers being excluded from global markets. The latter process occurs as buyers within commodity chains upgrade their volume, reliability and quality criteria for purchasing, and as more stringent requirements call for ever-larger investments to meet buyers’ quality requirements and specifications.
Secondly, the inability of the more advanced developing countries to move up the ladder of development is also a key feature of the recent period of globalization. This is contributing to the saturation of commodity markets and increasing the vulnerability of those LDCs that have sought to escape the poverty trap by diversification out of commodities. It is difficult for LDCs to move up the ladder of development if the more advanced developing countries face a glass ceiling that blocks their development. The socioeconomic marginalization of the LDCs and the polarization of the world economy (in the sense of the weakness of the “middle class” of world States) are interrelated. (SOURCE: www.cprc.abrc.co.uk)
CHALLENGES OF GLOBALIZATION IN TANZANIA
The challenge facing Tanzania in particular is to design public policies so as to maximize the potential benefits from globalization, and to minimize the downside risks of destabilization and/or marginalization. None of these policies is new, and most African countries have been implementing them for some time. In particular, sub-Saharan Africa has made substantial progress toward macroeconomic stability, below are some of challenges that are facing Tanzania.
Tanzania has a lot of resources but the problem comes on how to use it, we always importing goods more than exporting goods, it is not like we don’t want to export but there are a lot of things need to be done before getting to exporting goods, but these characteristics lead to be incompetent on exporting goods.
To be able to export need these among others.
➢ Good equipments and components.
➢ Skilled workers and experienced supervisors.
➢ Good planning systems.
➢ Time for preparation.