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Chapter 1 Introduction—Translating Growth Into Poverty Reduction Oswald Mashindano and Andrew Shepherd The fact that poverty is a multidimensional concept makes it difficult to define .1 Much has been written about the meaning of poverty but, because of its complexity, many authors feel safer stating its causes or manifestations rather than analysing what it is. Variations in definitions complicate the design of poverty measurements and poverty reduction programmes as well as the assessment of the impacts of policy on poverty. What we find in the literature and through frequent visits to poor communities is that poverty deprives people of their security and wellbeing ;prevents people having access to safe water, adequate food, clothing and shelter, education and health care; takes away people’s rights and their freedom , dignity and peace of mind; puts people’s lives in danger; and robs themof their future.2 In its broadest sense, poverty is defined as the inability to attain a minimum standard of living. It is caused by a lack of adequate resources and capabilities to acquire basic human needs. Poverty is therefore a global concern which lies at the heart of development economics.3 The situation is not better at country level. Tanzania remains one of the poorest countries in the world, and poverty reduction has been one of its main national development challenges. Poverty in Tanzania is a phenomenon primarily in rural areas, where a bigger proportion of the people live. Thus, since independence in 1961, the government of Tanzania has been preoccupied with combating especially rural poverty. The country’s development path and its history of poverty reduction interventions can be divided into three periods. First was the post-independence period (1961–7). At this time, Tanzania was characterised by an economic system inherited from the colonial regime. Economic performance was satisfactory in terms of growth but there was no explicit articulation of how the benefits of growth were to be shared within society. During these early years of independence, relatively little attention was paid to equity issues.4 Second was the post-Arusha period (1967–early 1980s). Under the 1967 Arusha Declaration , Tanzania adopted a socialist model of development, relying on a strong state to deliver equitable benefits across society. This ideology was reflected 2 TRANSLATING GROWTH INTO POVERTY REDUCTION in central government controls in key areas of the economy. Initially, socioeconomic performance was satisfactory, judging from basic social indicators. However, the country’s capacity to sustain the delivery of basic social services came under enormous strain. Some of its earlier gains in areas such as education , health services and water supply began to be reversed. It has been argued that the focus was on distribution at the expense of growth. A series of crises during the 1970s almost led to economic collapse, with improvements in living standards and the achievements won in the initial period after independence coming under serious threat by the end of the decade. Macroeconomic imbalances further aggravated the situation, manifested through budgetary deficits, balance of payments deficits, a growing debt burden, increasing inflationary pressure and a weakening of the productive sectors, among other things. Since the early 1980s, Tanzania has been taking a number of reform measures aimed at ending the crisis. Among other things, the country has resolved to continue with macroeconomic and sector-specific policy reforms as a long-term strategy for economic growth. These reforms aim to create an environment conducive to private investment, among other objectives. This objective is now a matter of consensus across the political elite and is considered a matter of priority if the country’s initiatives to reduce poverty are to be realised. After a decade of preoccupation with structural reforms and re-establishing macroeconomic stability aimed at creating an enabling environment for growth, Tanzania resumed its focus on poverty reduction during the 2000s. This is of course part of the global effort towards a sustained exit from the poverty trap, represented by pursuit of the Millennium Development Goals (MDGs). The government undertook various initiatives towards poverty reduction and the attainment of social and economic development, within a broad policy framework—the Tanzania Development Vision 2025—which established the vision, mission, goals and targets to be achieved with respect to economic growth and poverty eradication by the year 2025. Efforts to address poverty in Tanzania started after independence, when the country’s motto was to fight three major development enemies, namely, ‘Poverty, Ignorance and Diseases’.5 Among a series of programmes geared towards eliminating poverty...

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