Identifier
Created
Classification
Origin
05DARESSALAAM432
2005-02-28 04:01:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Dar Es Salaam
Cable title:  

INPUT FOR 2005 PRESIDENT'S REPORT ON AGOA: TANZANIA

Tags:  ETRD PHUM PGOV ELAB EINV TZ 
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UNCLAS SECTION 01 OF 02 DAR ES SALAAM 000432 

SIPDIS

STATE FOR AF/E AND AF/EPS
PASS TO USTR BILL JACKSON
PASS TO COMMERCE ROBERT TELCHIN
PASS TO DEPT OF LABOR/ILAB ROBERT YOUNG

SENSITIVE

E.O. 12958:N/A
TAGS: ETRD PHUM PGOV ELAB EINV TZ
SUBJECT: INPUT FOR 2005 PRESIDENT'S REPORT ON AGOA: TANZANIA

REF: SECSTATE 24616

Sensitive but Unclassified (SBU). Protect accordingly.

UNCLAS SECTION 01 OF 02 DAR ES SALAAM 000432

SIPDIS

STATE FOR AF/E AND AF/EPS
PASS TO USTR BILL JACKSON
PASS TO COMMERCE ROBERT TELCHIN
PASS TO DEPT OF LABOR/ILAB ROBERT YOUNG

SENSITIVE

E.O. 12958:N/A
TAGS: ETRD PHUM PGOV ELAB EINV TZ
SUBJECT: INPUT FOR 2005 PRESIDENT'S REPORT ON AGOA: TANZANIA

REF: SECSTATE 24616

Sensitive but Unclassified (SBU). Protect accordingly.


1. (SBU) Post submits input for the President's Report on
AGOA, as requested reftel. Also, see additional comments in
paragraph 6. Point of contact at post is Pol/Econ Officer
Jefferson Smith, smithjd@state.gov.


2. Market Economy/Economic Reform/Elimination of Barriers to
U.S. Trade: Since early 1986, the government has launched a
comprehensive economic reform and stabilization program. In
pursuit of this, agricultural marketing has been
liberalized, foreign exchange controls have been lifted,
prices deregulated, and a new investment code has attracted
increased foreign investment. These reforms have resulted in
improved competitiveness, lower tariffs, increasing levels
of foreign investment and trade, improved key economic
indictors, and integration into world markets. The
government has privatized nearly all of its parastatal
enterprises. Market forces determine interest and exchange
rates. Still, the nascent private sector is weak and poverty
persists throughout the country. U.S. investment in
Tanzania is slowly increasing but is hindered by corruption,
poor infrastructure, and bureaucratic inefficiencies. The
latter has significantly prolonged debt repayment and
intellectual property protection cases involving major
American corporations. The inability to own land or offer it
as collateral remains a major impediment to new investment.


3. Rule of Law/Political Pluralism/Anti-Corruption: Tanzania
became a multiparty state in 1992 and held its second
multiparty election in October 2000. National elections
will be held in October 2005 and the current president will
step down due to constitutional term limits. The ruling
party is expected to win easily on the mainland, but the
contest in Zanzibar is likely to be closer and more
contentious. There were no reports of overt political
harassment in 2004, nor were any opposition rallies banned
during the same year. The judiciary is formally independent

but suffers from corruption, inefficiency, and executive
influence, particularly in the lower courts. Criminal trials
are open to the public and the press. The government
participates in the World Bank Institute's anti-corruption
and good governance program, has established an Anti-
Corruption Commission, and has indicted senior officials and
mid-level members of the judiciary for corruption. The
government has established a Ministry of Good Governance and
a Human Rights Commission as recommended by a 1997 report on
corruption, but most other recommendations remain
unimplemented.


4. Poverty Reduction: Macroeconomic stability and steady
growth has not led to a significant reduction of poverty.
The government of Tanzania is working to address poverty by
implementing its PRSP for the HIPC Initiative. According to
an IMF-World Bank assessment team, the government has made
"significant progress" in PRSP implementation. Priority
sectors of the plan include primary education, roads, water,
health care services, and agriculture/food security.
Tanzania remains dependent on donor-funded projects in each
of these areas.


5. Labor/Child Labor/Human Rights: The government passed new
Labor Laws in 2004 strengthening workers rights and
prohibitions against child labor; however they are not
currently in effect. There was little respect for trade
union rights in the privatized industries. The Trade Unions
Act allows workers to form trade unions, but dissolved the
Tanzania Federation of Free Trade Unions, which though not
legally registered was recognized by workers, employers, and
international organizations. Labor law on the mainland
covers public and private employees, but restricts the right
of workers to form unions and to strike. The labor law does
not cover government employees on Zanzibar. The Registrar of
Trade Unions has broad authority to monitor and discipline
the internal conduct of unions. The right to strike is
weakened due to the prolonged mandatory dispute settlement
procedures. Tanzania has ratified all eight ILO core
conventions and has been a member of the ILO's International
Program on the Elimination of Child Labor since 1994.
Tanzania is currently participating in the ILO's "Timebound
Program to Eliminate the Worst Forms of Child Labor," which
seeks to eliminate child labor in the commercial
agriculture, commercial sex, domestic service and mining
sectors. As of December 2004, approximately 9,000 children
have been withdrawn from child labor as a result of the Time-
bound Program. Following the January 2001 incidents on Pemba
Island in Zanzibar, the ruling party and an opposition party
signed an accord that has led to increased political freedom
in the country. In May 2003, Tanzania held a free and fair
by-election in Pemba for previously contested parliamentary
seats as specified under the accord. In the lead-up to the
2005 general elections respect for political rights of
opposition parties has decreased. Arbitrary arrest and
prolonged detention remained problems. The judicial system
often did not provide expeditious and fair trials. Pervasive
corruption continued. The government limited privacy and
freedom of speech, the press, assembly, and association.


6. Comment: Tanzania has not benefited significantly under
AGOA. A few individual companies have been able to export
under AGOA, particularly in handicrafts and textiles.
However, the U.S. market remains a distant dream for most
Tanzanian exporters. There was no new AGOA-related foreign
investment in Tanzania in 2004. The most significant
barriers to developing an export sector include weak power
and transport infrastructure, a largely unskilled work
force, and an inability to produce the quantities required
by U.S. buyers. End comment.

OWEN