Basic Needs and the International Crisis: A Case Study of Tanzania

The unfavourable international environment that followed the two oil price rises of 1973–4 and 1979 has tended to threaten BN-approaches to development among non-oil producing developing countries. Economic growth has slowed down, and very large current account deficits have emerged. The slow-down in economic growth, which was especially marked among African economies, itself reduces the resources available to meet BN. But the accompanying balance of payments problems have caused especial problems for developing countries. To finance these deficits, middle-income countries had recourse to the private international capital market, while many low-income countries needed International Monetary Fund assistance. Neither of these sources of finance is favourable to BN. Private borrowing requires a short-run commercial rate of return, while the pay-off from BN-programmes is more long term and often takes the form of social rather than private cashable returns. IMF conditionality has emphasised deflation, reduced public expenditure, and the elimination of consumer subsidies as part of the structural adjustment required to justify IMF loans.2 If these prescriptions are followed, BN-programmes and achievements are likely to be threatened.