Tanzanian government launched the three-year Economic Recovery Programme (ERP) in the 1986/87 financial year (July-June). Then its second phase, the three-year Economic and Social Action Programme (ESAP) has been started in 1989/90. These programmes were intended to bring a transformation in Tanzanian economy as well as society. The recent noteworthy issue is “Zanzibar Declaration”. The Party National Executive Committee of Chama cha Mapinduzi, which is the single political party in Tanzania, held in middle February, 1991 in Zanzibar decided to allow Party members to acquire shares in private companies, drawing more than one salary and renting houses (The Sunday News 17/2/91), which had been regarded as deeds of capitalists or feudalists in the clause 8-(7) of chapter 2 of Katiba ya Chama cha Mapinduzi (Chama cha Mapinduzi Constitution). In spite of the propaganda of the continuation of the “socialism and self-reliance” policy by the senior staffs of the government and the Party such as “Ujamaa is not dying” (by the Party Vice-Chairman, Hon. Rashidi Kawawa, The Daily News 2/3/91), “Economic reforms within socialist policy” (by the Minister for Foreign Affairs and International Cooperation, Hon. Ahmed Hassan Diria, The Daily News 9/3/91) and so on, at least some transformation has been going on steadily.
Diversification and structural transformation play important roles in influencing the macroeconomic performance of low-income countries (LICs). Increases in income per capita at early stages of development are typically accompanied by a transformation in a country’s production and export structure. This can include diversification into new products and trading partners as well as increases in the quality of existing products.
Diversification in exports and in domestic production has been conducive to faster economic growth in LICs. Increased diversification is also associated with lower output volatility and greater macroeconomic stability. There is both a growth payoff and a stability payoff to diversification, underscoring the case for paying close attention to policies that facilitate diversification and structural transformation.
Empirical analysis using a newly-constructed cross-country dataset, complemented by country case studies, is utilized to examine the patterns of diversification and transformation in LICs since the mid-1960s. Most LICs have historically been heavily dependent on a narrow range of traditional primary products and on a small number of export markets for the bulk of their export earnings and sources of growth. These patterns have been changing over the past two decades, albeit with significant variation in the extent of diversification both across LICs and within regions. There is still ample scope to upgrade the quality of LICs’ existing export basket and/or introduce new higher value-added products, not only in manufacturing but also in agriculture – often the least productive sector in LICs. Development policies in LICs should therefore include rather than abandon agriculture.
Cross-country empirical evidence points to a range of general policy and reform measures that have proven effective in promoting diversification and structural transformation in LICs. These include improving infrastructure and trade networks, investing in human capital, encouraging financial deepening, and reducing barriers to entry for new products. But there is no one-sizefits-all recipe, as evidenced by the diversity of experiences recorded in the country case studies. A new diversification toolkit developed by Fund staff provides easy access to highly disaggregated, product-level data on export diversification and product quality, enabling country authorities and mission teams to conduct more detailed, country-specific analysis.
This Strategic Plan for Agricultural Transformation in Rwanda –Phase II(PSTA II) document finalised in December 2008 has been developed in response to the need for an updated strategy for agriculture. The PSTA II covers the four year period 2009-2012, terminating at the same time as the Economic Development and Poverty Reduction Strategy(EDPRS) at the end of 2012.
The strategy document is structured as follows: this executive summary and three Parts. Part I covering the context, challenges of the strategic plan with chapters on (a) the role and context of the strategic plan, (b) principles of this strategy and the strategic axes for Rwandan agriculture, (c) Rwandan agriculture today, (d) lessons learned and agriculture objectives revisited, and (e) the methodology used for developing the PSTA. Part II follows on with details on the strategy and its programmes with chapters on each of the four programmes with details of the sub-programmes and activities under each major programme. Finally, Part III covers the strategy implementation and financing modalities. One annexe isappendedon the detailed budget.
Rwanda’s economic growth over the last decade has been remarkable. With a government that is committed to achieving sustainable economic growth coupled with growth in employment opportunities for its people, Rwanda has made impressive progress in rehabilitating and stabilizing its economy to exceed pre 1994 levels. The overall economy is growing at a significant rate. The average annual growth rated in GDP was 8.8 per cent between 2005 and 2009. Rwanda’s GDP per capita has increased from less than 200US$ in 1994 to 540 US$ in 2010.Although still at an early stage, the GoR has set a set path towards economic transformation which shows signs of economic transformation in Rwanda
Since the food price rises starting 2007 and the financial crisis that followed in 2008, the development community has been wrestling with the dual questions of threats to food security and the growing inequality accompanying economic growth. Almost all of the poverty and hunger is now concentrated in the low and lower-middle income countries of Asia and Sub-Saharan Africa, most of it in rural areas. In this paper we examine the performance of a selected number of countries in Asia and Africa by analyzing agriculture’s historic role in structural transformation. A paper drawing on the experience of 109 countries over a 30 year period with a focus on China, India, Indonesia and Brazil was prepared as an input into India’s 12th Five Year Plan in 2011 (Lele et al 2011). By extending that analysis to the East African countries, we demonstrate the extent to which the late developers of the East African Community face odds which are greater than those of densely populated Asian countries in achieving structural transformation. We further demonstrate the urgency of focusing attention on agricultural productivity growth as the critical ingredient for achieving food security, poverty reduction and overall economic development.
Off-farm employment has long been seen by farm residents as a way to bridge the income gap among them that arises from stagnating farm production and growing population pressure. In
Rwanda, where population density in certain regions approaches 400 persons per km2, subdivision and further fragmentation of land has led many households to supplement their incomes through employment in the non-farm sector of the rural economy. Government awareness of the need to stimulate non-farm employment opportunities for the rural poor has grown recently, as demonstrated by a well-known presidential address on this question (Rwanda, 1986), and the official declaration of the year 1988 as the “Year of Raising Farm Incomes.” Hope abounds for
converting such slogans into reality. Promotion of small enterprises, cooperatives, new sources of credit, and employment training are among the alternatives under study (Rwanda, 1988). Yet beyond its contribution to the overall growth of farm residents’ incomes, expansion of the non-farm sector can alleviate income inequalities in the agricultural sector that result from an unequal distribution of landholdings. To the extent that poor farm households with little access to land can obtain the training, capital and credit to facilitate their participation in the non-farm sector, their relative economic position will likewise be enhanced. Similarly, albeit indirectly,
households that continue to rely on agricultural wage labor as their primary source of income also benefit from an expanding non-farm sector, as the creation of employment alternatives shrinks the size of the agricultural labor pool and drives up the prevailing agricultural wage rates.
Civil wars are a major source of poverty. Eight of the 10 countries with the worst human development index (HDI), and similarly eight out of 10 countries with the lowest GNP per capita, have had major civil wars in the recent past.1 About half of low-income countries have been subject to major political violence. Causality works both ways, as low incomes lead to conditions that are conducive to violence.2 But the evidence suggests that major civil wars are associated with markedly worse performance in economic growth, food production per capita and human indicators, such as infant mortality rates, school enrolment, and so on.3 Hence, any comprehensive strategy to tackle poverty must give the prevention of conict a central place. Yet in the past this has not been so. Conict prevention has, of course, been regarded as desirable as a political objective, but it has not been part of the poverty reduction or human development agendas. For example, the World Bank’s Poverty Reduction Strategy documents do not deal centrally (and often not at all) with this issue, nor has the UNDP’s Human Development Report treated it as a focal point (UNDP, various years; World Bank, 1998; Binswanger & Landell-Mills, 1995). Partly for this reason, development strategies in general and anti-poverty policies in particular have tended to neglect issues related to conict. Yet recognizing prevention as central for poor societies may alter the design of policies substantially. The aim of this paper is to explore how economic and social policy-making would be affected by focusing on conict prevention, in addition to other development questions, in low-income countries. This paper starts from the premise that crisis prevention is essential for poverty reduction as well as to alleviate immediate human suffering; and that policies aimed at reducing political violence are needed for all low-income countries given their high propensity to strife. Similar policies are also needed for some middle-income countries, but the incidence of civil war is substantially lower among them, partly re ecting the fact that they succeededin becoming middle-income becausethey had avoided conict.
This paper proposes a micro-level decomposition approach of consumption growth and poverty reduction with a focus on the role of sectoral growth and structural transformation. Taking the case of Uganda with available household-level panel data over the 2005-2010 period, we examine the within-sectoral growth and sectoral changes that were associated with a 8 percent poin reduction in the poverty headcount ratio and an annual average consumption growth rate of 3 percent. Since those surveys contain a tracking instrument of both households and individuals, it is therefore possible to examine occupational, spatial, institutional, and demographic mobility of the original households and their members over time. Those different dynamics can then be related to micro-level welfare dynamics through panel-based descriptive and regression-based decompositions, aside the more standard cross-sectional approaches such as the Ravallion-Huppi one.
While Uganda has made significant efforts in reducing the proportion of individuals and households living below the absolute poverty line, nearly 10 percent of the households continue to live in persistent or chronic poverty with significant differences across geographical areas. Of all households classified aspoor in 2009/10, nearly 49 percent were chronically poor households and as such the poor are not a homogenous group. Compared to 1992-99 period, households in Uganda were found to be more vulnerable to poverty in the period 2005/6-2009/10. These observed changes in the nature and patterns of poverty dynamics in Uganda require government to move away from universal poverty reduction interventions that continue to treat the poor as a homogenous group. Otherwise, Uganda’s achievement of the first millennium development goal of halving extreme income poverty earlier than 2015 might not be sustainable.
The Ugandan economy resembles many other economies in sub-Saharan Africa in that it has a large subsistence sector, relies on a few primary commodities for export and depends on aid to finance its public services. Oil and minerals have so far not been important to the economy. However, this might change as an estimated 3.5 billion barrel oil reservoir has been discovered in Uganda’s Western and Northwestern Albertine Graben. Minerals have also been found and are being sold off as concessions. If oil revenues start to be mobilized as currently planned (2016-17), significant changes in not only government finance but also in the
governments’ relationships with donors and in state–society relations are likely to occur. The consequences for local communities and the environment are also likely to be significant.