Tanzania’s growth experience following economic reforms: An analytical comparison with Vietnam

Abstract

Tanzania and Vietnam have been managed on centralized bureaucratic lines for decades, but both countries have now embarked on  market reforms in the last two decades. This paper, first, traces the major trends in the economic transformation of Tanzania following  reforms, and compares with the Vietnam experience with specific focus on agriculture and industry. Secondly, it explores the lessons that  the experience of Vietnam provides to inform the growth strategies in Tanzania. It is demonstrated that in both countries the socialist experiment failed in later years to generate the anticipated growth and economic development mainly due to weaknesses  inherent in the instruments used to implement the ideology itself. The industrial sector dominated by parastatals became grossly  inefficient and could not generate enough foreign exchange through exports, or produce enough goods to meet domestic demands.  While Tanzania approached economic reforms abandonment of agriculture in favour of private sector-led industrialization, highest  priority was to develop agriculture by integrating the collective and individual sectors into an overall system emphasizing intensive  cultivation and crop specialization and by employing science and technology. As a result the two countries have followed different  economic trajectories with Vietnam performing far better than Tanzania.