amounts of local capital. By associating with local private or
public capital and retaining day-to-day control through a
management/service agreement, it is able to effectively
denationalise local capital. Thus, for instance, the Tanganyika
Development Finance Company, which we have already men-
tioned, had something like Shs 226 million invested in its forty-
two or so projects at the end of 1971. Out of this, total local
capital constituted about 63 per cent (Shs. 141.95/— million) and
the foreign capital the remaining 37 per cent (shs. 84.05/— million.
Large portions of the so-called foreign capital may in fact be part
of the profits made during the period of the company’s existence
(i.e., 1962-1971), and ploughed back, thereby increasing the assets
of the company without net foreign exchange gain for the national
economy. As Pierre Jalee, citing the Moroccan case, has pointed
out:

(Foreign Capital) knows that the enterprise is viable only on the basis
of foreign patents, foreign materials and supplies, and foreign technical
capital. Although in the majority, the indigenous capital is the prisoner
of its foreign partner. Mixed investment is, perhaps, the worst form of
neo-imperialist exploitation for it ties up the indigenous capital of the
host country and denationalises it.!?

RETAINING OF OLD AND CAPTURING OF NEW MARKETS

By associating with public capital, the foreign partner retains his
previous market or if he new, gets a foothold in the new market
with all the protection and backing of the state. In fact, the
policies of economic nationalism followed by the state mean that
the populace is encouraged to ‘Buy Local’ which indirectly helps to
advertise the foreign firm’s products, especially when, more often
than not, the product of even the local company bears the foreign
brand name. In addition, the foreign partner concerned, most
likely a member of a global multinational group, collects market
and economic intelligence for the group as a whole and establishes
necessary contacts.

Thus when the mismanagement of Tanzania’'s Mwananchi
Engineering and Construction Company (MECCO) by its
managing agent the O.C.C. (Overseas Construction Company) of
Holland was discovered, it was also revealed that O.C.C. was
using MECCO to get contracts for its parent company and then
employing MECCO at cheap rates as subcontractors. ?° Similarly,

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