Tanzania) suggests that even the most respectable companies if
placed in a position of strength (and deprived of a long-term ex-
pectation of staying as they must be in any management
agreement situation) have in the past and may be expected in the
future to manipulate the situations to ensure maximum short-run
benefits for themselves.

No, there is in fact only one conclusion that can be drawn, and
that is that a country such as Tanzania must adjust her in-
dustrialisation strategy so that (with at most a few exceptions) she
invests in industries it can manage herself. The example of the Tea
Authority shows how, with imagination, complex machinery may
in fact be managed by local staff. Other examples could be found
in the enterprises of the Tanzania Sisal Corporation, the National
Milling Corporation, and (in these days) on many of the sites
where buildings are being contructed by MECCO. If a third-world
country signs management agreements then she must anticipate a
continuing drain of resources for as long as the agreements remain
in force. The necessity for local control and management is one of
the main considerations that must be taken into account as Tan-
zania prepares her industrialisation strategy.

Notes

1. This title was given to a letter signed ‘Tanzanian’ in The Siandard, January
1971. g

2. ‘Management Agreements and Other Contracts with Foreign Agents’, by
Michel Romnicianu. N.D.C. mimeo, January 1971.

3. It is conviction that at this stage of Tanzania’s industrialisation the Govern-
ment must ensure that its investments generate surplus. Since the possibilities
of obtaining the surplus to finance industrialisation from agriculture are so
poor, after an initial stage the main part of the surplus will have to be
generated within the infant industrial sector itself. It is in this sense that the
Government must be concerned with maximising the surplus at home.
Needless to say surplus is not the same as profit — it must always be
evaluated considering gains and losses in all sectors of the economy and over
a long period of time in the context of an industrialisation plan.

4. For example J.K. Galbraith, The New Industrial State. Penguin Books, 1967,
pp. 95 - 100, or Robin Marris, The Economic Theory of Managerial Capitalism
Oxford 1964 p 12.

5. This has become one of the main practical functions of Western embassies in