ࡱ > 1 3 0 bjbj 4 e e $ o , J C ) C C C . C C C 7D ! " ? 0 o C C C o : Letter to the Editor: Economic Processing Zone System Not Working Properly This letter was originally published in Swahili in a Tanzanian newspaper called Nipashe. The Science, Technology and Policy Research Organization was touched by the news published in your newspaper on Saturday, 8th February 2014 covering the report by the Organization for Economic Cooperation and Development (OECD). The report addressed the failures of the Special Economic Processing Zones (EPZ) in Tanzania. It explained that only 15,000 jobs have been created since the establishment of the EPZ system in 2002 which works out to USD $47,000 investment per job created in relation to tax holidays being enjoyed by firms under the EPZ system. Since among the objectives for establishment of EPZ system was to promote technology transfer between foreign and local firms, STIPRO conducted research to find out the technological capabilities of firms under EPZ system in 2012. The findings of the research indicated no hope for Tanzania manufacturing sectors through the EPZ system. The research revealed that firms under EPZ have low technological capabilities. It was found out that firms dealt with low tech activities such car repair, packaging of readymade goods, tailoring, food storage and other service-oriented business. It was also revealed that employees under EPZ firms received partial training of one to two weeks which, according to the beneficiaries, did not gain them adequate knowledge and skills. About 32% of the respondents reported not to have received any kind of training. It should be understood that technology transfer happens when there are interlinkages/ interaction among stakeholders. In the case of EPZ system in Tanzania, there are weak mechanisms to allow linkages between foreign and local firms. As per 2012 STIPRO research findings, it is indicated that about 80% of foreign firms under EPZ did not have linkages with local firms for supply of goods and services. About 64% of the EPZ firms reported outsourcing services from industrial giants countries such as Germany, Holland and Japan. Based on the OECD and STIPRO reports, it can be argued that the EPZ system in Tanzania is not working properly. The government needs to put into place strong mechanisms to ensure that technologically credible firms that are productive and cooperative with local firms are the one privileged under the system. Interventions should focus on boosting the manufacturing sector, which has been contributing below 10% to the GDP (Gross Domestic Product) for about two decades. The service sector that is contributing about 48% is dominated by foreign investments; it does not produce goods or create jobs for Tanzanians. In this context, you can have growth without development since the distribution of wealth is not shared by the majority. Costantine Deus, STIPRO, HYPERLINK "mailto:Costantine.deus@stipro.or.tz" Costantine.deus@stipro.or.tz ! + , / K L e " $ ? [ 帨}qa}RCR}h h CJ OJ QJ aJ h hHK) CJ OJ QJ aJ h hQE CJ H*OJ QJ aJ hg CJ OJ QJ aJ hdD CJ OJ QJ aJ h hQE CJ OJ QJ aJ h{%% h{%% 6CJ OJ QJ aJ h{%% hdD 6CJ OJ QJ aJ h/X hQE 5CJ OJ QJ aJ h{%% 5CJ OJ QJ aJ h/X hHK) 5CJ OJ QJ aJ hrE 5CJ OJ QJ aJ h> 5CJ OJ QJ aJ L ) - A " $a$gd6+ $a$gdQE $a$gddD gdrE & * 7 8 J Q X f i j p + E V g ( ) . ֻsgs[s hw