Unpacking views on equitable economic growth

What you need to know:

On the 30th, Prof Joseph Stiglitz from Columbia University and Nobel Laureate in Economics together with Prof Kaushik Basu from Cornel University delivered a public lecture at the University of Dar es Salaam.

The Stockholm Statement of November 2016 is based on the ideas of 13 world’s leading economists, including Prof Joseph Stiglitz and four former chief economists of the World Bank. The statement has a set of principles to help frame country-level policies in a rapidly changing and globalising world. The key issues in the statement in the context of this article include the view that traditional economic thinking no longer applies. Inequality within countries is threatening social cohesion and economic progress and development needs to be seen in a broader perspective in order to achieve more equitable and sustainable results. According to the statement, inclusive economic development is the only socially and economically sustainable form of development. It emphasizes the importance of policies that tackle inequalities. It sees trickle down growth policies where the state has a minimal role and the rest is left to the market as not being sustainable.

Economic growth is the increase of the real output of goods and services of an economy over time. It is usually measured in monetary terms over a period of one year or even quarter. Economic growth is supposed to contribute into general prosperity of the people by way of increasing quality of life. This quality of life is measured by inter alia, the quantity and quality of goods and services consumed. Economic growth in Tanzania has been among the best in Sub Sahara Africa in the recent past. It has been posting growth to the tunes of about 7 per cent consistently over years. Policy goals include having growth of up to 8 per cent and beyond. However, economic growth should not be the end on its own. It should instead be a means of achieving other social and economic goals. What is needed inter alia, is growth that is creating jobs and reducing poverty and the same time being inclusive and equitable.

The key aim of equitable growth is to address inequality with its many negative social, economic, political and even security implications. Extreme inequalities with very high Gini Coefficient are unhealthy and should not be tolerated. For example, a Gini Coefficient of one means that one person has total control over all the income or consumption of country or region. One does not suggest a perfectly equal society economically where Gini Coefficient is one either. However, one suggests reduced inequalities where extremes tend to move towards the centre. Theoretically this can be achieved by moving up those in the lowest economic ladder or moving down those at the top or both. Pareto optimality however, requires that no one should be made better off by making others worse off. Therefore moving those at the bottom up the ladder seems to be a better option.

Unpacking views on equitable economic growth

What you need to know:

Latest

Vikindu children join clean-ups as communities prepare for El Niño rains

Good manners are killing great ideas

‘Letters to a Young Poet’ by Rainer Maria Rilke: Living through the questions

Finland’s women-in-tech model offers lessons for Tanzania

Finland offers Tanzania a blueprint for blue-economy innovation

Miners told to prepare for heavy rains

In the headlines

Mixed reactions greet new mandatory travel insurance for foreign visitors

Kilimanjaro fire prompts temporary closure of two routes used for climbing the mountain

Tanzania removes extra visa clearance for Nigerians

Concern as safety gaps leave fuel station workers exposed

What you need to know:

Who is responsible for the truth?

Leveraging nature to cut tourism costs and boost revenue

Vikindu children join clean-ups as communities prepare for El Niño rains

Good manners are killing great ideas

‘Letters to a Young Poet’ by Rainer Maria Rilke: Living through the questions

Finland’s women-in-tech model offers lessons for Tanzania

Finland offers Tanzania a blueprint for blue-economy innovation

Miners told to prepare for heavy rains

Mixed reactions greet new mandatory travel insurance for foreign visitors

Kilimanjaro fire prompts temporary closure of two routes used for climbing the mountain

Tanzania removes extra visa clearance for Nigerians

Concern as safety gaps leave fuel station workers exposed