Selected views on inclusive and green economic growth

Economic growth has been among the key issues of discussion across the globe in general and within such developing countries as Tanzania in particular.

In Tanzania for example various interventions, including programmes and projects, have aimed at attaining high economic growth.

Where high growth rates have been attained, there have been celebrations mainly from the government. Many ‘normal’ citizens, however, have shown discontents in that the ‘impressive’ growth paths have not translated into higher standards of living.

The need for attaining inclusive and green economic growth cannot be overemphasized. However, inclusive and green economic growth does not just happen but it is worked for.

Economic growth

The concept of economic growth describes an increase in monetary value of goods and services produced in various sectors of an economy over a period of time. This period of time is normally a financial year.

Goals of many governments have been to attain as high economic growth figures as possible. This needs to be interrogated by questioning the quality of growth. Recent critical voices are calling for not just growth but for inclusive and green growth.

Inclusive growth

Inclusive economic growth is a type of economic growth that includes and involves the majority of a country’s sons and daughters especially those in the lower social-economic class.

These are generally the poor. For national plans and budget to deliver inclusive growth, those formulating, discussing and endorsing them should make sure that they ensure participation of the majority in various economic activities of production and consumption of goods and services.

For people to meaningfully participate in productive economic activities for example, they need empowerment. This can be done through education, knowledge and skills development in general and among the new entrants in the labour market in particular.

There may be a limit in which people can tolerate growths that by-pass them. Non-inclusive growth can be a time bomb if not addressed sooner than later. If unchecked, non -inclusive growth may be a thorn to those benefitting from fruits of growth at the expense of others.

Distribution and redistribution

Inclusive economic growth implies that there should be fair (not equal) distribution and redistribution of the pie of the national cake that has grown.

Distribution and redistribution is normally done through various fiscal policies and their many instruments including taxation and subsidies.

Policy and decision makers should ensure that appropriate fiscal policy instruments are deployed for fair distribution and redistribution of the national cake across sectors, geography and the many demographic categories.

Growth poles

For growth to trickle down and be felt by ‘normal’ citizens, it should occur in the sectors where the majority of the people are. For Tanzanian type economies this is in the agriculture sector.

Short of that, there should be very close and meaningful inter-sectoral linkages between the sectors with rapid growth such as mining, construction and services sectors and the rest of the economy.

Such linkages could be backward through the factor inputs market or forward through the factor outputs market. Policy and decision makers should ensure that national resources are allocated in such a way that they will stimulate sectoral growths that will ensure inclusiveness.

Green economy

Green economy is all about undertaking economic activities in an environment-friendly manner.

It is an undertaking of economic activities without negatively affecting terrestrial and aquatic flora and fauna (plants and animals). It is one that ensures low carbon and resource efficiency. It is an economy that reduces carbon emissions and pollution, enhances energy and resource efficiency as well as prevents the loss of biodiversity and ecosystem services.

Policy and decision makers as well as practitioners should ensure that there is green tourism, green mining, green forestry, green fishing, green construction, green transport that reduces carbon foot prints, green agriculture that reduces food miles, green consumption of goods and services as well as green waste disposal.

All these are important due to the actual and potential dangers posed by climate change as the world has limited carrying capacity.

Way forward

There are needs to build the capacity of policy and decision makers as well as practitioners on inclusive and green economic growth issues. They need to deeply know why it is good economics to ensure that national plans deliver these key quality growth variables and most importantly how they can make this happen. Capacity building should be a continuous process and not a one time event.