1st December 2003

TANZANIA: At UNIDO X in Vienna, Prime Minister critizises dividing line between rich and poor

In his statement at the official opening of the tenth session of the General Conference of UNIDO

Vienna / Austria, 1st December 2003, the Prime Minister of the United Republic of Tanzania, Frederick T. Sumaye, sharply critizised the increasing gap between rich and poor nations. Speaking on the importance of the internationally accepted Millennium Development Goals for sustainable poverty eradication, Sumaye included the following words into his presentation:

“Your Excellencies, ladies and gentlemen, our world is principally divided into two major blocks. The dividing line is mainly centred on how rich or how poor one is, and the resulting blocks have been given various names such as: the North and the South, the developed and the developing (or sometimes least Developed Countries), the Industrialized and non-industrialized, First world and third world etc. The rich nations have a better share of the world economy and obviously a better command of the world markets. These countries are technologically advanced and produce manufactured goods of high value. On the other hand the poor nations are technologically backward and mainly depend on primary commodities whose prices they cannot even ascertain leave done setting them.

... I have heard several times people from the rich nations wondering why the poor nations are not getting out of the poverty trap. The poor have been given various doses in the name of economic reforms but the problem is getting worse in many countries, particularly in Sub Saharan Africa. We have been advised to attract investment from outside, but nothing much is happening. When not so much is happening of course reasons for the same must be found and usually will be blamed on bad governance, resource mismanagement, corruption and the like.

While I do not intend to defend these bad elements, I at the same time think sometimes not enough effort is done to critically analyze the situation in every country. Obviously not all countries are badly governed, or all countries are corrupt etc. So why aren’t enough FDI’s flowing into the very poor countries? Certainly not the lack of incentive packages. Most of the incentive packages available in the poor countries may not be available in the rich countries. For FDI’s to flow into a country, there are some conditional pre-requisites that the would be investors would require. If one wants to put up a manufacturing industry, he/she would want to be assured of fairly cheap and continuous supply of electricity, supply of good quality water, good and functioning communication networks, including good tarmac roads, harbours if available railways, telecommunication, etc. This person is forgetting that the development of these infrastructure needs a lot of money. The electricity is mainly dependent on rain, which is very unreliable, the drinking water is not even available to the people, leave alone good water for the industry etc.

In such a country more than half of its people are living on a “less than a dollar a day”. As if all this is not enough, these same people will be required to chop off anything from 20% - 50% (sometimes) of their budgets to service debts to the rich nations whose per capital income may be 20000 – 30000 times better. This is the predicament of the poor. There is definitely a problem that we must solve first if we are to deal with the poverty problem in the LDCs.” (Official text / UNIDO) for full text click here


Statement by the Prime Minister of the United Republic of Tanzania
Honourable Frederick T. Sumaye MP
at the official opening of the tenth session of the
General Conference of UNIDO
Vienna, Austria, 1st December 2003


The Temporary President of the General Conference,
H.E. Mr. Juan Lopez, Vice President of Guatemala
Your Excellencies,
H.E. Director-General of UNIDO, Mr. Carlos Magarinos
H.E. Director General of UNCTAD, Mr. Rubens Recupero
Distinguished Delegates, Ladies and Gentlemen

Allow me, Mr. President, to pay tribute to our host country, the Federal Republic of Austria for the warm welcome accorded to us all since our arrival in this beautiful city of Vienna. I am sure we have all enjoyed not only the beauty of the city but the friendliness and kind-heartedness of her citizens. On behalf of my delegation and on my own behalf I wish to thank and register our appreciation to the Government, the leadership and the people of Austria and particularly those of Vienna for receiving us so well. May I also join my colleagues on congratulating you, Mr. President as well as the members of the Bureau for being elected to lead this important conference. I am sure your wise and capable leadership will guide us to sound and constructive deliberations for the future development of our countries and the growth of UNIDO. Lastly, but not least, I wish to recognize the excellent work done by the Director-General of UNIDO and his staff. The good organization of this conference is a clear manifestation of your hard work in enabling UNIDO to achieve its mission.

Mr. President,

This is another important gathering of world leaders and officials in our quest for more robust and sustainable means of pushing ahead faster the development agenda of our countries. Every gathering such as this one helps us to reflect more on the development paradigms ahead of us and how we can continue working together to fulfil our goals of eradicating poverty. I know that we will be dealing with hard issues, but let us all be optimistic that any consensus agreed upon in such an international gathering like this one, can contribute significantly towards the improvement of the lives of the world’s poor. Our major challenge is to achieve the Millennium Development Goals with the ultimate goal of poverty eradication.

Mr. President, the millennium development goals have become the international community’s yardstick of measuring the success in the fight against poverty. However, sustainable poverty reduction entails a parallel quest to develop the endogenous structural change processes that are necessary for sustainable job creation and improvements in the standards of living. Therefore the interaction between the millennium development goals and industrialization and trade is inevitable.

We all share, I presume, the perception that the most realistic weapon in our struggle against poverty rests in efforts to stimulate a dynamic process of rapid economic growth through various policy measures which promote investments in various sectors and which enable our citizens to be active participants in our development efforts. But building our internal capacity has a causal relationship with what is happening in the international environment. International trade and investment flows are seen as factors that can contribute significantly to our war against poverty. For example, traditional trade related technical assistance and the removal of trade barriers have already helped some countries, in particular the least developing ones. We therefore need to work together in order to build capacities that will enhance trade and investment in the developing countries. In that regard we fully support the recent WTO-UNIDO Agreement signed in Cancun, which enables collaboration and partnership on trade related technical assistance to developing countries so that they can participate meaningfully in international trade. We believe that with joint efforts and technical support to the poor nations, we will strengthen the supply side capacity and hence improve the market share for the poor.

Your Excellencies, ladies and gentlemen, our world is principally divided into two major blocks. The dividing line is mainly centred on how rich or how poor one is, and the resulting blocks have been given various names such as: the North and the South, the developed and the developing (or sometimes least Developed Countries), the Industrialized and non-industrialized, First world and third world etc. The rich nations have a better share of the world economy and obviously a better command of the world markets. These countries are technologically advanced and produce manufactured goods of high value. On the other hand the poor nations are technologically backward and mainly depend on primary commodities whose prices they cannot even ascertain leave done setting them.

Mr. President, I think most of us if not all, know the problems confronting the poor nations of the world. We may even know some of the answers to such problems but we are not able to solve them. If a problem is known, a solution is known but the problem is not getting solved, then there must be a problem. I have heard several times people from the rich nations wondering why the poor nations are not getting out of the poverty trap. The poor have been given various doses in the name of economic reforms but the problem is getting worse in many countries, particularly in Sub Saharan Africa. We have been advised to attract investment from outside, but nothing much is happening. When not so much is happening of course reasons for the same must be found and usually will be blamed on bad governance, resource mismanagement, corruption and the like.

While I do not intend to defend these bad elements, I at the same time think sometimes not enough effort is done to critically analyze the situation in every country. Obviously not all countries are badly governed, or all countries are corrupt etc. So why aren’t enough FDI’s flowing into the very poor countries? Certainly not the lack of incentive packages. Most of the incentive packages available in the poor countries may not be available in the rich countries. For FDI’s to flow into a country, there are some conditional pre-requisites that the would be investors would require. If one wants to put up a manufacturing industry, he/she would want to be assured of fairly cheap and continuous supply of electricity, supply of good quality water, good and functioning communication networks, including good tarmac roads, harbours if available railways, telecommunication, etc. This person is forgetting that the development of these infrastructure needs a lot of money. The electricity is mainly dependent on rain, which is very unreliable, the drinking water is not even available to the people, leave alone good water for the industry etc. In such a country more than half of its people are living on a “less than a dollar a day”. As if all this is not enough, these same people will be required to chop off anything from 20% - 50% (sometimes) of their budgets to service debts to the rich nations whose per capital income may be 20000 – 30000 times better. This is the predicament of the poor. There is definitely a problem that we must solve first if we are to deal with the poverty problem in the LDCs.

Mr President, we are all in agreement that industrial development is of paramount importance to attain meaningful economic development. Through industrialization jobs are created, natural resources are exploited, primary commodities are value added, manufactured goods are sold into markets, goods and services are made available and higher economic growth rates are attained as the forward - backward linkages are realized. There are barriers that must be removed but the poor must be helped to track this rough terrain. While we cannot advocate for FDI to flow even when the conditions are not right, we must help the poor countries overcome some of these barriers. There is a need to encourage them to produce industrial goods by providing them with at least some technical assistance in industrial management starting with SMEs. But we must also help these poor countries manage their affairs, for instance, does it still make sense for these countries to continue servicing the unbearable burden of debts from their budgets, which can hardly cover half of their budgetary requirements? What can be done to assist them is building of the infrastructure required for investment etc.

Mr. President, the main theme of this conference in the next few days is the interface between the millennium development goals and the initiation of sustainable industrial development processes. We are talking here of how we can combat poverty through the processes of industrialization. To many of our developing countries this involves the development of the small and medium enterprises. In Africa small and medium enterprises have a critical role to play in the development process. Apart from bringing together local private ownership and management, it is expected to provide strong linkages within the domestic economy through job creation and local resources. SMEs are also sources of income for individual survival and or products for large numbers of low-income people. One of the key components for development of a strong and viable SME sector in most of our developing countries especially those in Africa, is to build and nurture the entrepreneurship culture which is still at its lowest stage compared to areas such as Asia. Many of our governments have taken bold steps to develop a strong private sector for it is through it that we will also have a strong SME sub-sector. UNIDO has played a critical role in helping us towards that goal and we very much appreciate those efforts.

Mr. President, for a developing country like Tanzania, we believe that the role of industrial development lies much on the development of small and medium enterprises. Though the help of UNIDO and other development partners we are working towards a strategy that will enable those enterprises to produce quality products that can not only compete in the local market but also be able to enter the international one. However, we still need to share ideas with others on how to develop a network of credit and other necessary facilities that will enable them to produce to match the quantity and quality that will satisfy the market.

Mr. President, all the LDC economies are agricultural-based. As said earlier, their major exports are primary commodities whose prices have nose dived in the recent past, and chances of recovery are very slim. The poor grow crops and sell them into international markets as primary commodities at dismal prices. The developed nations buy those commodities, process them and sell the processed products to the poor at higher prices. As long as this pattern continues, this exploitation will continue and we can forget about poverty eradication in the poor nations. We must now help the poor nations process their produce and sell value added products into the international markets. Let us help them sell cotton thread, yarn or cloth instead of cotton.. sell carpets and twines instead of sisal fibre, processed coffee instead of green beans, furniture instead of wood logs etc. Let us help them produce juices, fruit pastes, fruit pickles etc instead of leaving farmers fruits to rot by the roadside. Once these efforts are done, the individual farmers will benefit and the country as a whole will benefit. Job seekers will also get jobs. This will be a true partnership towards poverty reduction if not total eradication. If UNIDO is assisted a lot can be achieved in this direction. In Tanzania UNIDO is helping SME and mainly women in food processing. The fruit that used to rot by the roadside now is processed and farmers are producing more because the prices are better. Many young people are also employed. This can be expanded to a larger scale to include processing of primary commodities if resources can be made available to UNIDO.

Mr President, I believe there is more room to assist the poor attain industrial development if we are to seriously address the poverty agenda in poor nations. As I pointed out earlier, UNIDO is doing a very commendable job in assisting the developing nations establish an industrial base starting with the mobilization of available resources of capital and labour. The establishment of SME in many developing countries like Tanzania is a success story that must be nurtured. For UNIDO to be able to do this and bring further development into this important area, resources must be made available. This is where the rich nations can help by making resources available to bodies like UNIDO.

This is least we can do. Lets all work together and build a healthy world where we can all enjoy being partners and friends. The world of too many imbalances as it is now is not comfortable and is not safe to anyone of us. It is not safe to the poor and it is not safe to the rich, it is not safe to the north and it is not safe to the south, it is not safe to the developed and it is not safe to the developing countries. It is therefore to the interest of us all that the poverty agenda is tackled and reasonable answers to our development problems are found.

Thank you for your kind attention.

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