Tanzania’s Idiot Micromanagement Of The Economy – Sugar Imports Edition

There are indeed legitimate functions for the government to perform in a modern economy. There are even ones useful enough in one still not modern like Tanzania. Determining the exact source of sugar supply not being among them. In fact, having anything other than the most very general oversight of sugar supply being beyond government competence.

This not being a lesson that the Government of Tanzania has learnt:

Tanzania has now backtracked on its decision to ban sugar importation, a week after freezing the issuance of permits. The Minister for Agriculture, Mr Japhet Hasunga, told journalists on Wednesday that the government was now content with the plans by local manufacturers to produce more sugar. “We are now satisfied with the companies’ strategic plans to increase sugar production and that is why we have decided to allow them to supply and import sugar for domestic consumption,” he said. Last week, Mr Hasunga had accused the factories of importing “sugar very fast, overlooking their role of producing,” adding that a freeze on the issuance of permits would force them to concentrate on production.

OK, so we can potter through ruminations on who should be producing sugar for Tanzania, how perhaps. Entirely true, a tropical country with a well watered coast, should be no great difficulty in producing a sugar crop. Certainly Zanzibar used to manage to grow the stuff well enough.

Maybe more domestic production and less imported is a good idea. Who knows? The point being that quite obviously the government itself doesn’t have the competence to determine this.

Last year, Tanzania banned Ugandan sugar traders from its market, on claims that the sugar was from Kenya. In January, the government started issuing permits to traders to import sugar from Uganda, only to block it a month later.

Incompetence, pure and simple. And no, we don’t given economic planning powers to those provably incompetent.

But rather more than this we do need to recall something rather important. Economic planning is difficult. Very difficult indeed. We had the whole socialist computation debate about this for most of the 20th century. 1989 showed who won that one. On the one side of the Wall the rubble left from all the clever people in the country telling everyone what to produce, when and how. The result being living standards some one fifth of those left to themselves to do whatever in the chaos of a market and undirected economy.

The Soviets directed the production of everyone. It didn’t work. Sure, Tanzania’s only trying to direct the production of sugar but it’s still not going to work for the same reason. Economic planning’s too difficult not to use free markets to do it.

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BarksintheCountry
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BarksintheCountry

The USA does precisely the same with the sugar market and has for decades. Price supports, market manipulation, all of it.

Quentin Vole
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Quentin Vole

I suspect sugar production is not quite so significant a portion of the US economy as it is in Tanzania. It’s still daft, but insignificantly so.

Jonathan Harston
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Jonathan Harston

What are they trying to achieve with all the messing about? Incentivise domestic production? Simple import tariffs will do that. Cut down sugar consumption? Purchase sin tax will do that.