Towards Inclusive Economic Growth: Insights from Global to Local Tanzanian Contexts.

Abstract

Economic growth has been among the key issues of discussion in the worlds of policy, politics, academia and practice. This is the case across the globe in general and within such developing countries as Tanzania in particular. In Tanzania for example various interventions including programs and projects have aimed at attaining high economic growth. Where high growth rates have been attained and posted, there have been celebrations mainly from the government. Many ‘normal’ citizens however, have shown discontents in that the ‘impressive’ growth paths and figures have not translated into higher standards of living. This calls for measures for attaining not just high economic growth but also inclusive economic growth. The concept of economic growth describes an increase in monetary value of goods and services produced in various sectors of an economy over a period of time. This period of time is normally a financial year. Goals of many governments have been to attain as high economic growth figures as possible. This needs to be interrogated by questioning the quality of growth. Recent critical voices are calling for not just growth but for inclusive and green growth. For economic growth to trickle down and be felt by ‘normal’ citizens, it should occur in the sectors where the majority of the people are. For Tanzanian and comparator type economies, this is in the agriculture sector in its very broad sense seen from ecosystem and value chain perspectives. Attaining inclusive growth through growth poles (sectors that drive growth) calls for ecosystem interventions including financing. There should be very close and meaningful backward and forward inter- sectoral linkages in forms of inputs-outputs relationships between the sectors with rapid growth such as mining, construction and services and the rest of the economic sectors that are not posting very large growth figures. These include agriculture, livestock and fishing in Tanzanian context. Such linkages could be backward through the factor inputs market or forward through the factor outputs market as captured in Leontief input-output model. Policy and decision makers as well as practitioners should ensure that national resources are allocated in such a way that they will stimulate sectoral growths that will ensure inclusiveness. Inclusive economic growth on the other hand, is a type of economic growth that includes and involves the majority of a country’s sons and daughters especially those in the lower social-economic class (the poor). Inclusive economic growth ensures that people from all walks of life are meaningfully involved and involving themselves in the growth process and distribution of the national economy that has grown. Inclusivity involves men and women, young and old, urban and rural dwellers, people with disability, rich and poor and indeed all kinds of people with no regards to race, ethnicity, gender, age, political inclinations and other aspects along that line. Inclusive economic growth implies that there should be fair (not equal) distribution and redistribution of the pie of the national cake that has grown. Distribution and redistribution is normally done through various fiscal policies and their many instruments including taxation and subsidies. Policy and decision makers should ensure that appropriate fiscal policy instruments are deployed for fair distribution and redistribution of the national cake across sectors, geography and the many demographic categories if inclusivity is to happen.