Joseph Stiglitz, Professor, Columbia University and former World Bank Chief Economist (1997-2000) sitter ner under Development Talks.

Joseph Stiglitz at the 2016 meeting hosted by Sida in Stockholm, attended by 13 leading development economists, which resulted in the Stockholm Statement.

Photo: Mathilda Bäcklin Sida

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Joseph Stiglitz on Tanzania’s path-way to inclusive growth

Updated: 24 May 2018

Joseph Stiglitz and other world class economists give recommendations to a possible Dar es Salaam Declaration based on the principles of the Stockholm Statement.

Tanzania needs a multipronged approach. Balance market, state and community, checks and balance and media. The problem is not with globalization but how to manage it. Measurement matters, and natural resources can be a blessing.

That was Nobel Laureate professor Joseph Stiglitz contributions to a Dar es Salaam Declaration on Tanzania’s path-way towards deepened inclusive growth. Together with professors Sabina Alkire and Kaushik Basu, he was in Tanzania to discuss ways forward for the economic policies with Government of Tanzania and the research community. All based on the Stockholm Statement.

The high level international economists brought a new opening and fresh air into constructive discussions on Tanzania’s priorities. A very engaged Dr. Mpango, Minister of Finance and Planning opened the day, saying:

This is a very rare opportunity and an honor to our country, bringing together great minds. I am very excited by the theme of the conference!” 

Following up on the Stockholm Statement

The conference, named “Equitable growth and human development in a resource-based economy: Dialogue on the Stockholm Statement in Tanzania”, was attended by more than 300 persons from Government, civil society, private sector, academia and the international community and was widely appreciated by participants and visitors. Framing the conference was Stockholm Statement, the 8 principles on inclusive economic development that were the result of a meeting hosted by Sida in Stockholm 2016, attended by 13 leading development economists under the lead of Professors Stiglitz and Basu.

Sida being the host of the meeting in 2016, and the “publisher” of the Stockholm Statement, created an opportunity for the Swedish embassy in Tanzania to follow up and take the statement and its principles forward, discussing them in the very context they were developed for. The Tanzanian government is committed to its five-year development plan with ambitious targets for growth and poverty reduction, but as many countries and governments it struggles with defining and implementing effective policies that ensures both growth and inclusiveness. In this context, the principles of the Stockholm Statement provide support and guidance for a fruitful debate, as did the invited speakers.

As Swedish ambassador Katarina Rangnitt stated:

“The purpose of inviting the world-leading professors and organize the conference was to contribute to the debate on inclusive economic development in Tanzania, as well as to provide an opportunity for advice and dialogue with the Government of Tanzania on this theme.” 

Why high poverty numbers while economic growth is strong?

The openness from the Minister of Finance and Planning regarding the development challenges Tanzania faces was striking, as was his keen interest in advice from the visiting professors. The Minister stated that he is followed by the question why Tanzania continues to have high poverty numbers while economic growth is strong and the country is so well endowed with resources. Among other explanations, he cited technology and skills gap, lack of financial capital, corruption, lack of access to global markets, lack of linkages between sectors and participation in high-growth sectors, as well as lack of strong government and smart policies.

Professors Alkire, Stiglitz and Basu made interesting suggestions for Tanzania, focusing on the open architecture between state, market and community; encouraging Tanzania to take the lead formulating the policy agenda; managing the natural resources to benefit the whole country, measuring development in a multidimensional matter and apply a multi-pronged approach to development and not only relying on manufacturing.

Will there be a Dar es Salaam Declaration?

The conference was live streamed, and streaming events were set up around Tanzania and in Sweden. The #StockholmStatementTZ hashtag trended on Twitter in Tanzania with about 2,2 million in reach, and great appreciation was expressed for the high-quality presentations.

“This brought oxygen to my brain!” as one of the participants expressed it.

The presentations and panels infused new ideas to the discussions on ways forward to ensure inclusiveness in Tanzania’s economic development.

The conference has also created a new momentum to dialogue with the Government of Tanzania on inclusive economic development issues, including issues related to dialogue and openness and media and civil society’s pivotal role for development. A process toward a possible “Dar es Salaam Declaration” has been started which is something the Embassy look forward to participating in developing and following until hopefully materialized. 

Using Stockholm Statement as guidelines for country-specific discussions

Susanna Gable, Chief economist at Sida, sees great potential in using the principles as an inspiration for inclusive economic development in other countries on the continent and around the world.

”Using the principles to frame conferences and debates on inclusive development is exactly what the Stockholm Statement is for. The principles shouldn’t be seen as a blue print but as guidelines and broad recommendations to discuss country-specific economic development and poverty reduction”

The Swedish Head of Cooperation Ulf Källstig concluded the conference.

“The Stockholm Statement worked excellent in framing the discussion towards the relevant issues, and inspired to new thinking. I can strongly recommend other Embassies to use the Stockholm Statement for discussions and dialogue on inclusive economic development,” he said. 

Recommendations to Tanzania by Stiglitz, Alkire and Basu

  • Developing countries should take the lead in formulating the policy agenda! The Arusha Declaration from 1967 inspired Amartya Sen in his broader approach to poverty and the Declaration has many similarities with the Stockholm Statement regarding emphasis on inclusiveness, participation and dialogue.

  • Use a “multi-pronged” approach to development and inclusiveness. This should include manufacturing-based industry but also services sector and agriculture. This follows on technology-development, implying an increasingly capital- and technology-intensive manufacturing sector with much fewer job-opportunities, the new job-opportunities in the services sector and the fundamental role of the agriculture sector.

  • Ensure balance between market, state and the community. Recognize the importance of the market and support its productivity, but don’t leave it unregulated. This means, recognize the central role of the state in development, and the role of community in the development process- through dialogue and participation. The media and civil society play pivotal roles.

  • Measure development broader than GDP growth and income. Use a multidimensional approach to poverty and development in policy and in measurement.

  • Manage natural resources well. Ensuring competition in that market and renegotiate contracts to ensure maximum revenues to the country while keeping the interest from the market. Organize the labor market and use social protection systems to protect workers and support transition. 

Page owner: Communication Unit

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