The Role of Czech Republic and Tanzania Bilateral Trade in the Economic Transformation in Tanzania

ABSTRACT Bilateral trade with Czech Republic, Tanzania’s Eastern European historical partner with legacies of previous technological collaboration, manifested disparate trends over the past three decades 1985-2015, provoking dialectics about the relevance of trade and technology transfers among the post-socialist countries in the context of the economic transformation in Tanzania. The purpose of this thesis was to render an exploratory study of the nature of bilateral trade between Czech Republic and Tanzania, with the aim to examine the role and value added of the bilateral trade and technology flows in enhancing Tanzania’s economic transformation. The main objective was to assess the role of Czech Republic and Tanzania bilateral trade in the economic transformation in Tanzania. The independent variable, Bilateral Trade, was defined as trade made between two contracting parties, with the purpose to reinforce relations and offer additional trade benefits and privileges to the contracting parties. The dependent variable, Economic Transformation, was defined as economic growth based on innovation and technological adaptation and characterized by high levels of investment and rising productivity thanks to technology, know-how and skills transfers. A comparative approach was used to cross examining evidence derived from both secondary and primary sources of data, and juxtaposing the data obtained by quantitative and qualitative methods to find the relevant intertwines and indicators. The sample population in the qualitative part was 224 respondents and consisted of (1) the representatives of the international bodies in charge of the bilateral trade between the Czech Republic and Tanzania, (2) the Tanzanian governmental institutions in charge of bilateral trade with the Czech Republic, (3) the representatives of Czech governmental institutions in charge of bilateral trade with Tanzania, (4) Tanzanian/ (5) Czech private sector venturing into the trade investment in the Czech Republic/ Tanzania. The research instruments included desk and public documentary review, questionnaires, interviews and focus group discussions. The findings of the study reveal that technology transfers emanating from bilateral trade between Czech Republic and Tanzania maintained its relevance in the context of Tanzania’s transformation. Czech technologies transferred to Tanzania were predominantly classified as SITC (6) (Manufactured goods classified chiefly by material), SITC (7) (Machinery and transport equipment) and SITC (8) (Miscellaneous manufactured articles) of the Standard International Trade Classification (SITC); the technical specifications of most of the technologies were found compatible with the strategic objectives of Tanzania’s National Five-Year Development Plan 2016/2017 -2020/2021 and Tanzania Vision 2025; and most fulfilled the user requirements of Tanzanian small, medium and large firms. Czech technologies that have been transferred and locally adapted in the 1980-1989 remained in Tanzania’s industrialization portfolio, despite the decreased volume of traded technologies stemming from geopolitical changes in the 1990s. The perceived opportunity for enhanced bilateral trade and trade-based technology depended on their technical characteristics, user involvement, incentives and support and communication.

  Table of Contents

DECLARATION A......................................................................................................................................- 2 -

DECLARATION B ......................................................................................................................................- 3 -

ACKNOWLEDGMENT...............................................................................................................................- 5 -

DEDICATION............................................................................................................................................- 7 -

LIST OF ACRONYMS.................................................................................................................................- 8 -

ABSTRACT .............................................................................................................................................- 10 -

TABLE OF CONTENTS.............................................................................................................................- 11 -

LIST OF TABLES......................................................................................................................................- 14 -

LIST OF FIGURES....................................................................................................................................- 16 -

1. CHAPTER ONE.................................................................................................................................- 1 -

1.1. INTRODUCTION................................................................................................................................. - 1 -

1.2. BACKGROUND OF THE STUDY............................................................................................................... - 1 -

1.3. STATEMENT OF THE PROBLEM ........................................................................................................... - 40 -

1.4. PURPOSE OF THE STUDY ................................................................................................................... - 41 -

1.5. HYPOTHESIS ................................................................................................................................... - 42 -

1.6. RESEARCH OBJECTIVES ..................................................................................................................... - 42 -

1.7. RESEARCH QUESTIONS ..................................................................................................................... - 43 -

1.8. SCOPE OF THE STUDY ....................................................................................................................... - 43 -

1.9. SIGNIFICANCE OF THE STUDY ............................................................................................................. - 46 -

1.10. RATIONALE OF THE STUDY................................................................................................................. - 47 -

TRADE AND TECHNOLOGY TRANSFERS xii

1.11. OPERATIONAL DEFINITIONS OF KEY TERMS........................................................................................... - 47 -

2. CHAPTER TWO: LITERATURE REVIEW............................................................................................- 51 -

2.1. INTRODUCTION............................................................................................................................... - 51 -

2.2. THEORETICAL LITERATURE REVIEW ..................................................................................................... - 51 -

2.3. RELATED STUDIES............................................................................................................................ - 71 -

2.4. CONCEPTUAL FRAMEWORK ............................................................................................................... - 80 -

2.5. LITERATURE GAP ............................................................................................................................. - 83 -

3. CHAPTER THREE: RESEARCH METHODOLOGY ...............................................................................- 86 -

3.1. INTRODUCTION............................................................................................................................... - 86 -

3.2. RESEARCH PHILOSOPHY .................................................................................................................... - 86 -

3.3. RESEARCH DESIGN........................................................................................................................... - 86 -

3.4. TARGET POPULATION....................................................................................................................... - 89 -

3.5. SAMPLE SIZE AND SAMPLING PROCEDURE............................................................................................ - 92 -

3.6. INSTRUMENTATION.......................................................................................................................... - 96 -

3.7. VALIDITY AND RELIABILITY OF THE RESEARCH INSTRUMENTS .................................................................... - 99 -

3.8. DATA GATHERING PROCEDURE ........................................................................................................ - 102 -

3.9. DATA ANALYSIS ............................................................................................................................ - 104 -

3.10. ETHICAL CONSIDERATIONS............................................................................................................... - 110 -

3.11. LIMITATIONS ................................................................................................................................ - 110 -

4. CHAPTER FOUR: OVERVIEW OF SAMPLED FIRMS........................................................................- 111 -

4.1. INTRODUCTION............................................................................................................................. - 111 -

4.2. OVERVIEW OF THE CZECH MANUFACTURING SECTOR ............................................................................ - 111 -

4.3. SAMPLED CZECH FIRMS .................................................................................................................. - 117 -

TRADE AND TECHNOLOGY TRANSFERS xiii

4.4. OVERVIEW OF TANZANIA MANUFACTURING SECTOR................................................................ - 122 -

4.5. SAMPLED TANZANIAN FIRMS .................................................................................................... - 129 -

5. CHAPTER FIVE: DATA PRESENTATION AND ANALYSIS .................................................................- 134 -

5.1. INTRODUCTION............................................................................................................................. - 134 -

5.2. NATURE OF BILATERAL TRADE BETWEEN CZECH REPUBLIC AND TANZANIA................................................ - 137 -

5.3. TRADE BASED TECHNOLOGY TRANSFERS &ECONOMIC TRANSFORMATION IN TANZANIA ............................. - 154 -

5.4. CURRENT CHALLENGES AND OPPORTUNITIES TOWARDS TRADE BASED TECHNOLOGY TRANSFERS FROM CZECH 

REPUBLIC TO TANZANIA............................................................................................................................... - 170 -

5.5. PROPOSED STRATEGY TOWARDS ENHANCED BILATERAL TRADE AND TECHNOLOGY TRANSFERS FROM CZECH REPUBLIC 

TO TANZANIA............................................................................................................................................. - 208 -

6. .CHAPTER SIX: SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS ..................- 232 -

6.1. SUMMARY OF FINDINGS ................................................................................................................. - 232 -

6.2. CONCLUSIONS .............................................................................................................................. - 240 -

6.3. RECOMMENDATIONS ..................................................................................................................... - 243 -

6.4. IMPLICATIONS OF THE STUDY ........................................................................................................... - 248 -

REFERENCES........................................................................................................................................- 250 -

APPENDICES.........................................................................................................................................267

RESEARCH INSTRUMENTS .........................................................................................................................267