SoC04 Balance of trade and solving unemployment

Austin Joshua · 2024-06-29T14:28:54+00:00

PREMISE For all countries in the world, balance of trade is a very important aspect that can make or break the country and its economy. Balance of trade is the difference between all imports and the exports that country makes, it encapsulates all movement of goods, services, capital or funds and finances and the factors of productions from within a country to the outside world. It’s essentially buying and selling but, on a country-sized scale. It is a death trap for a country if it buys (in value) more than it makes (in value) and this therefore means that the currency, policy, legal frameworks, employment, sovereignty, governmental operations, technological, socio-cultural and economic aspects and in grave danger. HOW DOES BALANCE OF TRADE RELATE TO EMPLOYMENT? A great (Positive) balance is when a country export (makes and sells in value) more than it buys imports (in value), a country should seek to be on the equal or positive side, because it means that a country makes and sells as much or more than it buys, this directly translates to the industries (economic sectors) of a country, if a country makes and sells more that means there is a large workforce behind that component, and this means more people are employed to ensure that balance continues to be equal or great, this means there is higher manufacturing and output in a country. For Tanzania, the balance of trade has always been negative and it shows in the economic status of the country as one of the poor countries in the world. HOW TO RESOLVE NEGATIVE BALANCE OF TRADE AND INCREASE EMPLOYMENT RATE? There are many ways to resolve negative balance of trade, some of them direct and some of them indirect. One way we can look into is a more nuanced semi direct take which is SELF SUFFICIENCY, and in particular for this case self sufficiency in non complex technology manufacturing and assembly. SELF SUFFICIENCY IN NON-COMPLEX TECHNOLOGY MANUFACTURING AND ASSEMBLY This means that we make what can self-suffice the internal needs first, and not even for shipping, so that we can reduce the number of imports coming into the country Examples. If you look at the amount of textile import, the t-shirts, wraps, shirts, pants, dresses and all clothing, you won’t believe the easy process that goes to manufacturing or even at least assembling all of them, and you will be blown away to know that we do have textile mills here in Tanzania and some the clothes we wear is made from the fabric we ship outside at a low price since it is not finished goods yet and even the ones that are finished goods go outside the country to be branded and then sold back in. If you look at an electric water heater of any kind, the essential mechanism for it is just a mostly plastic outer layer, an induction (heating) base and an almost basic shaped aluminium or stainless steel inside cup like container for holding water inside. If you look at flush toilet, the tank’s inside is just made up of all plastic with shapes that can even be manufactured by a bottling company like Bonite bottlers, the whole mechanism is a primary and secondary school grade set up of buoyancy (floating), pipes and small springs. If you look at Children’s toys, like toy cars and the basic inside with all plastic and a small double A battery motor that can actually be made in Tanzania. If you look at basic crop processing machines like a sugarcane juice squeezer, a motor for threshing (separating grains from the hull/body) of maize, rice, millet and other grains crops. If you look at some of the imported furniture, jewels, kitchen utensils and so many other tools Some of these technologies and equipment are made in Tanzania but not in a profitable industry kind of way SOLUTION 1. Integration of disciplines for reverse engineering and innovation. Reverse engineering is like taking out Makande (a maize and beans boiled food), eating it to taste and see what it is made off and then making it yourself, this can also be applied to the above examples as many of them can just be made after short time of observation. We can integrate the multiple graduates from different engineering fields like electrical, mechanical, chemical and bio to study these products and innovate ways that we can make them ourselves without external licencing and relying on expats, this will create many jobs. Also, the manufacturing of these can be done through assembly line processes where even unskilled workers, which is the largest population of unemployed individuals in Tanzania can be taught within just a week or a month how to properly assemble and perform quality checks on these products. 2. Creating a strong brand image for these products within the country can also go a very long way to ensuring that people are patriotic, enthusiastic and trust the Tanzanian brand, this can be seen as a small or minor point but if you look at the brand (soft power) that countries like USA, China, Germany, South Korea, Japan and India have created for themselves, then it is crucial to acknowledge how it is beneficial to this aspect Governmental intervention, three aspects can be addressed here; Increase of Taxes and tariffs for imports on the industries that the country wants to see internally grow while reducing taxes for those that are internally made. 3. Creation of special economic zones for those businesses that will seek to invest in this production where those business are granted exemptions, fund grants, a case of China from the 1950s, Singapore and South Korea (1960s), India, Vietnam, Hong Kong and Malaysia, these are just some of the examples of the countries where the government saw the industries it wants the country to grow in and intervened mostly using the above two tactics Austin Joshua

Thread starter Austin Joshua
Start date Jun 29, 2024
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