Foreign Aid and Development: The Leather Industry in Tanzania

Abstract

Development failure in Tanzania's leather industry provides a context for discussing foreign aid effectiveness and the role of international aid organizations in the economic development of least developed countries (LDC). The Regional Africa Leather and Footwear Industrial Scheme (RALFIS) Phase II evaluation report is examined as a case study. The United Nations Industrial Development Organization conducted this project in Tanzania and nine other East African countries between 1993 and 1996. This paper argues that foreign aid has functioned principally to control the world economic order and only secondarily to assist LDC economic advancement. The "aid regime" has frequently affected recipient development adversely through imperialistic practices and inefficient bureaucracy, despite the presumption of a positive aid to development link. The RALFIS report demonstrated that donor prioritites tend to take precedence over recipient priorities. While fundamental industry issues of the Tanzanian leather supply chain were not addressed by the program, the cost of expatriate consultants and imported equipment tied to donors represented 48 and 34 percent of program funding respectively.