Not Just Another Recession
Why the Global Economy May Never Be the Same
In the mid-nineteenth century, the Sultan of Zanzibar decided to build Dar es Salaam, today Tanzania’s capital and largest city, next to a sleepy fishing town on the Indian Ocean. For years a backwater, Dar es Salaam had its first boom in 1887 when the German East Africa Company set up operations there, turning the city into the main shipping portal into German East Africa. After World War I, Dar es Salaam came under indirect British rule and became a provincial trading post. It got its independence in 1964, when the republics of Tanganyika and Zanzibar merged to form Tanzania.
The port has remained important regionally, but has been well off the major shipping routes between Asia and Europe. Now the Tanzanian government wants to change that. It hopes that with a few improvements it can turn Dar es Salaam into a major regional trade hub, catapulting Tanzania into the global ranks of middle-income countries. Those plans rest on Dar es Salaam becoming an increasingly important port for six neighboring countries: Burundi, the Democratic Republic of Congo (DRC), Malawi, Rwanda, Uganda, and Zambia.
But to get there, Dar es Salaam has some work to do. The port clears $15 billion of goods each year, but it is woefully inefficient. It is not among the hundred busiest ports in the world; Durban, South Africa, which ranks 42nd in container traffic, is six times busier than Dar es Salaam. Goods -- and sometimes entire containers -- disappear. Ships sway idly at anchor, gathering barnacles while they wait ten days, on average, before being able to berth in the port and then ten more days to unload cargo and clear it through customs. With rental rates for large merchant ships typically ranging from $10,000 to $20,000 per day, the delays add tens of thousands of dollars to shippers’ costs, according to the World Bank. The standard international waiting time is two days.
In 2012, container vessels at the port of Mombasa, Dar es Salaam’s only real rival in East Africa, took less than a day to berth ships and three to four days to unload, clear, and transport their cargo. And whereas the Kenyan port charges flat rates, Dar es Salaam’s fees are based on the value of the merchandise, which partially accounts for why Tanzania’s dock fees are 74 percent higher than Kenya’s. Last year, a World Bank report estimated that if Dar es Salaam became as efficient as Mombasa, it would boost the Tanzanian economy by $1.8 billion per year, equivalent to seven percent of the country’s GDP. The report noted that the port’s inefficiency, coupled with poor roads and “administrative obstacles” -- tariffs, corruption, bureaucracy, and technology gaps -- mean that it is nearly two and a half times more expensive to import food from Vietnam to Tanzania than from Vietnam to Germany.
Dar es Salaam’s problems are not just Tanzania’s. Five of the six African countries that it serves are landlocked (the DRC has a port on the Congo River at Matadi, just inland from the Atlantic). All six are caught in one or more of what the economist Paul Collier calls four development traps, which keep countries from experiencing growth like the rest of the developing world: conflicts such as civil wars, the natural resources curse, a lack of coastline but plenty of “bad neighbors,” and poor governance in a small country.
From a distance, Tanzania, with its long coastline and natural harbor at Dar es Salaam, appears primed to avoid these traps. But the view from the ground is different. The country is open to global trade but not always accommodating: goods offloaded after a long stay in Dar es Salaam must then venture the poor roads that meander across the country to reach their final destination. The costs inherent in using the port are mirrored in part by the informal economies and transactions along those traffic-clogged routes.
We’re three hours inland, heading to the coast on a single-lane road between the southern highlands city of Morogoro and Dar es Salaam. Rounding a bend, I count at least 100 trucks, bumper-to-bumper. They’re heading in the opposite direction, snaking their way into the foothills we’ve just descended, which look like a greener, only slightly safer version of the Khyber Pass. Half the trucks seem to be carrying fuel; others carry huge Maersk or Hanjin shipping containers. Imports through Dar es Salaam include wheat, rice, cars, mobile phones, and medicine. Temba, my driver-escort, says that most are headed inland to Zambia or the DRC.
The Morogoro–Dar es Salaam leg is a brief segment on the long journey that overtired and underpaid truckers make between the port and Tanzania’s landlocked neighbors. It’s one of the reasons Temba prefers to work as a driver for nongovernmental organizations such as BBC Media Action, an international development charity. Yet here he is, driving along this vital but precarious commercial lifeline, with the constant rumble of busy surface traffic and frequent delays.
An hour into the journey, Temba pulls over to buy mangoes and tomatoes from roadside sellers. Water from a recent rainstorm drips from the sloped thatched roofs of the stalls. Barefoot kids in school uniforms run past. Temba is deep in negotiations with one seller who is asking for 10,000 Tanzanian shillings for 24 mangoes and 8,000 shillings for a large bucket of tomatoes. (There are approximately 1,550 shillings to the dollar.) Temba haggles the prices down while freely sampling different varieties of mangoes. He ends up paying 5,000 shillings for the mangoes and 3,000 for the tomatoes, then loads the fruit, wrapped in black plastic bags, into the back of our Toyota Highlander.
We’re back on the road for only a few minutes before Temba stops again, this time for cylindrical containers woven from reeds that are full of charcoal. Temba gets out of the car and scoffs: making charcoal involves clearing tree cover, which is never replanted, he says. Charcoal might harm the environment, Temba adds, but his wife still told him to pick some up. As one of the charcoal sellers straps a reed container to the roof rack, Temba explains that he and his wife use portable gas containers sometimes, but only to cook quick meals. Gas is too expensive for slow-cooking beans and other dishes, which are best prepared over an open-air charcoal stove outside their apartment building. Temba counts out 15,000 shillings for the charcoal; it would cost 30,000 in Dar es Salaam, he assures me. At either price, the fuel still costs at least three times as much as the fruits and vegetables.
But prepared food is not as cheap. After driving another 20 minutes, we stop at a roadside restaurant for pilau, an Indian-inspired rice dish that probably came to Tanzania with the first traders across the Indian Ocean. After Tanzania’s independence, the government nationalized banks and other businesses, which caused many South Asians, who had long lived, worked, and owned companies in the country, to emigrate. The bill for both of us is 21,000 shillings. Temba insists to the waitress that we pay only 19,000 shillings; the chicken in the pilau, he says, was oily. The young woman in a headscarf rolls her eyes but reluctantly agrees, before she stacks our plates and chicken bones on a plastic tray and shuffles away.
Back on the road, ten kilometers later, we approach a rise and, in the distance, a village. A policeman appears suddenly in silhouette, striding into the middle of the road. He has a stick. As we pull onto the shoulder, Temba takes his handy BBC staff badge off the rear-view mirror and puts it around his neck. The khaki-clad policeman walks up to our car and shows his speed gun: we were doing 87 kilometers per hour in a 50 kilometers-per-hour zone. Temba explains that we are rushing to Dar es Salaam with an important tape that will go out at 4 PM on BBC Swahili, worldwide -- which isn’t true at all. The policeman looks at his pink plastic wristwatch. “BBC?” he says. Temba emphasizes the deadline -- a worldwide audience on pins and needles awaiting news from rural Tanzania.
There is an unsure pause; it feels like this could go either way. Temba must sense the same, because he turns to me, eyes widening theatrically and motioning down at the bag at my feet. Finally clued in, I raise the bag supposedly holding our breaking-news tape and delicately turn it from side to side like a baby in a neonatal ward. Another policeman appears, dressed in formal whites. A conference occurs in Swahili, the word “BBC” figuring prominently. Soon, the police wave us on and Temba collapses into laughter before his window is even rolled up. A speeding ticket might have cost him 50,000 shillings -- and there’d be no haggling his way out of it. As official policy, the BBC will not pay staff members’ traffic tickets, even those earned while performing official duties. Local drivers are hired in part because they’re supposed to know how to handle Tanzanian police. Temba passed that test.
Temba and I arrive in Dar es Salaam to a massive traffic jam. A billboard announces a German engineering firm’s plans to build a dedicated bus route through the city, like you might find in Stuttgart. We stare at it, not moving. Near the port, there are intersections with traffic lights, but everyone ignores them; instead, police officers wave traffic through or decide to hold cars stationary for ten minutes at a time.
“Big Results Now” is the Tanzanian government’s campaign to speed up economic development across the county, inspired by a similar Malaysian government initiative that focused on six key development areas. To improve rural infrastructure, the government built 1,800 kilometers of new roads. Street crime in Kuala Lumpur fell nearly 40 percent in one year.
No one would mistake Dar es Salaam for Kuala Lumpur, but the Tanzanian government insists that it can follow Malaysia’s lead. It’s also concentrating on six growth areas -- energy, agriculture, transportation, water, education, and the “mobilization of resources” -- in the hope that they will kick-start the country’s prospects. One Big Results Now target is reducing the average time to drive across the country from three and a half days to two and a half days. (The bus lanes coming to Dar es Salaam, if they actually cut down traffic across the city, would be a start.) Another target is Dar es Salaam’s port productivity, which the government wants to boost from just under 13 million tons annually to 18 million tons by 2015.
In October 2013, the arrival of a new 50,000-ton container ship, Maersk Cubango, was meant to signal this promising future. But with a harbor depth of only ten meters, Dar es Salaam couldn’t accommodate the fully loaded Cubango. So now, in addition to needing new berths, more modern cranes, and a streamlined offloading and customs processes, Dar es Salaam’s congested port must be dredged. It’s just one of many prices that the government must pay to keep ships -- and its vaunted plans -- from running aground.