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Foreign Investment in Tanzania: Impacts Past & Perceived

June 28, 2012 Leave a comment

Masai women’s group on their land in Arusha

Fourth in a series. Begin at the Introduction, then Wants & Needs, then The Agrisol Proposal.

Chinese factory workers earn less than their American counterparts. People in the Cambodian garment industry or Indian call-centers will be paid less than the same functionaries in more developed nations. The standard and cost of living is lower in the third world. Opportunities are lacking. Consumer and producer relationships subsist on the gulf between richer and poorer.

Companies from the states or Europe can hire abroad and insist on strict labor guidelines. The fact that American corporations benefit from places which violate the standards protecting workers here is morally and ethically reprehensible. That a government would sign an agreement with a foreign company knowing that wealth will stem from misery is criminal.

The contracts crafted by Agrisol Energy and Tanzania are open to interpretation. Either the company develops a business model which generates profit without abusing the residents of its host country or the government safeguards its people from absolute exploitation. Already direct capital injection is stripped from the deal. The lease agreement raises little cash for Tanzania; relaxed tariffs and wealth repatriation will fail to benefit the people who are most impacted by large-scale agricultural projects. Local manufacturing firms, assuming there are some up to the task, will not profit from sales of tractors or combines– Agrisol already expects to bring in Monsanto, John Deere and Stine.1

Success will depend on Agrisol’s ability to pay workers, who will leave their own subsistence farms, enough to compensate the loss of food production. The company needs to sell some crops to local markets at local rates to protect against the price fluctuations which will result. If employees are trained in modern techniques which they could share with their families everyone benefits. If neighboring communities see an investment in infrastructure Agrisol could prove its detractors wrong. None of this is going to be easy to accomplish. Business demands will compel Agrisol to shift focus to the bottom line, and only the Tanzanian government can ensure that citizens are protected. Read more…