- David Frum: U.S. creating too few jobs to make a real impact in cutting unemployment
- He says both parties have given up on policies to speed job creation
- Washington's message to America is: You're on your own, Frum says
Editor's note: David
Frum, a CNN contributor, is a contributing editor at Newsweek and The
Daily Beast. He is the author of eight books, including a new novel,
"Patriots," and a post-election e-book, "Why Romney Lost." Frum was a
special assistant to President George W. Bush from 2001 to 2002.
(CNN) -- The U.S. economy added 165,000 jobs in
April. That's not a bad result, except for this fact: Technically
speaking, the economy h
David Frum
That seems unlikely to
happen. The longest expansion in U.S. history lasted 10 years from 1991
to 2001. Even if we could somehow equal that record going forward, we
would expect a recession sometime before 2019 -- meaning that the
unemployment rate will surely rise again before it has touched anywhere
close to bottom.
But why repeat these
familiar facts? You know all about the joblessness crisis. Everybody
knows all about the joblessness crisis. Or rather ... not quite
everybody.
Last week, President
Barack Obama held a press conference. He accepted questions on Syria,
on the Boston bombing, on guns, on the closing of the prison at
Guantanamo Bay, on the implementation of the Affordable Care Act and on
immigration. None was asked about plans for job creation, which is
maybe just as well, since nobody in U.S. politics seems to have a jobs
program.
Before the 2012
election, Obama used to talk often about his American Jobs Act, a
second stimulus program that emphasized more cuts in the payroll tax
and aid to states to prevent public-sector layoffs. That plan has not
been heard from in a long time. The payroll tax holiday expired at the
end of 2012.
Layoffs continue apace
in the public sector: 11,000 public-sector jobs lost in April 2013. The
Obama administration faintly regrets both developments but won't invest
much political capital in seeking to reverse them. We are told that the
president this week will resume his "jobs and opportunity" tours.
Yet his speeches
focus on immigration and budget themes. Nor can the administration
muster the creative enthusiasm to propose alternative job-creation
plans for the second term..
Warren Buffett on stimulus, immigration
Republicans in
Congress, meanwhile, continue to emphasize budget-balancing above all
else. Back in 2011, the House GOP released a 10-point jobs plan whose
key point was a big cut in the top rate of tax to 25%. That plan too
has vanished from sight since Election Day.
We now have a two-party
agreement to act as if the central economic challenge of our time has
been resolved. Here's from the fourth paragraph White House response to
the April jobs report, a statement by Alan Krueger, chairman of the Council of Economic Advisers:
"The Administration
continues to urge Congress to replace the sequester with balanced
deficit reduction, while working to put in place measures to create
middle-class jobs, such as by rebuilding our roads and bridges and
promoting American manufacturing."
Not exactly a ringing call to action.
Here's House Speaker John Boehner's response to the same report:
"To get things moving,
we need to seize opportunities the president has been ignoring, and
focus on growing our economy rather than growing more government. That
means expanding energy production and modernizing our laws to make life
work for more American families. It means controlling spending,
simplifying our tax code, and reining in red tape that is choking small
business owners who want to hire more workers. And it means repealing
ObamaCare, and replacing the president's sequester with smarter cuts
and reforms that put us on a path to a balanced budget."
That's even less energetic than the president's statement.
The real message from
Washington: The jobs debate has hopelessly stalemated. The only policy
now is to wait the long, slow months and years before the problem
solves itself. No action will be forthcoming from government. Not even
any discussion of action will be forthcoming. Get well, soon, America
-- you are on your own.
as been in recovery since the summer of 2009.
Yet after nearly four years of economic expansion, nearly 12 million
people remain unemployed.
If we continue to add
jobs every month at the April rate, not until the fall of 2014 will we
again have as many people working as we did back in January 2008.
And of course, the
American workforce has expanded since January 2008 as young people
reach working age and as new immigrants arrive. At present job creation
trends, it will take until 2021 to drive the unemployment rate down to a rate that is considered "full employment."
(Financial Times) -- Jamie Dimon's prospects of
holding on to his chairmanship of JPMorgan Chase darkened on Tuesday as a
second shareholder advisory group recommended he be stripped of the
role.
(Financial Times) -- The Bank of China has stopped
doing business with a large North Korean bank, falling into line with a
US-led sanctions push to restrict funding for Pyongyang's nuclear
programme.
North Korea: A smuggler's paradise
(CNN) -- Thinking of having a baby? You may want to
consider moving to Finland -- the best place in the world to be a
mother, according to Save the Children's 14th Mothers' Index.
Glass, Lewis calls for Dimon to split roles
JPMorgan Chase & Co Chairman and CEO Jamie Dimon testifies before the House Financial Services Committee.
STORY HIGHLIGHTS
- Last year a proposal to split the chairman and chief executive roles attracted 40 per cent of the vote
- JPMorgan executives are continuing efforts to persuade shareholders to stick with the current structure
- Calls between senior executives and institutional investors are scheduled for the next two weeks
About 20 per cent of the
vote has been received, according to a person familiar with the matter,
and JPMorgan executives are continuing efforts to persuade shareholders
to stick with the current structure and board.
Calls between senior
executives and institutional investors are scheduled for the next two
weeks, up to the crucial annual meeting in Tampa on May 21 when
shareholders will vote on whether to split Mr Dimon's chief executive
and chairman roles.
Damaged by the fallout
from the "London whale" affair, in which JPMorgan traders lost $6bn
betting on credit derivatives, Mr Dimon could be forced to drop one of
his positions.
Glass, Lewis on Tuesday
followed its rival ISS in advising shareholders to vote for a split in
the roles and against the re-election of a number of directors.
The bank's senior
independent director, Lee Raymond, the ExxonMobil chief executive until
he retired in 2005, and a JPMorgan board member since 1987, has led
talks with shareholders.
Last year a proposal to
split the chairman and chief executive roles attracted 40 per cent of
the vote but many shareholders voted before JPMorgan revealed its
trading losses. Since the incident regulators and members of Congress
have attacked the bank's management for failures of oversight and
systemic breaches of rules.
"The investigations have
revealed questionable risk management practices at both the senior
management and board levels," said Glass, Lewis.
The advisory group added
to pressure not only on Mr Dimon but other directors, recommending
shareholders vote against the re-election of James Bell, Crandall
Bowles, David Cote, James Crown, Ellen Futter and Laban Jackson, citing a
variety of deficiencies.
"With the two leading
proxy advisory firms recommending investors vote against key directors,
it is clear that the status quo can no longer continue," said Dieter
Waizenegger, executive director of the CtW Investment Group, which
advises union pension funds and has advocated for a split.
"Rather than defending
its mistakes all the way up to the annual meeting, the board should
start rebuilding shareholder trust now by engaging with investors to
select new, experienced directors to oversee risk management."
"JPMorgan Chase is akin
to an A student that is now getting B grades," said Mike Mayo, analyst
at CLSA, in a note. "The fallout from last year's London Whale loss
seems to increase risk with management, reporting, consistency and
brand."
China reduces banking lifeline to N Korea
North Korean currency purchased at a Chinese border town is displayed in front of a painting in Beijing.
STORY HIGHLIGHTS
- Bank of China cut business with North Korea's main foreign exchange ban
- Move follows U.S.-led sanctions to restrict funding for Pyongyang's nuclear program
- China is North Korea's closest economic partner
- Move may also reflect bank risk management rather than bigger diplomatic motive
The decision to close the
bank account follows an increase in tensions on the Korean peninsula
and may be a sign that Beijing is willing to place more pressure on
Pyongyang.
The US Treasury hit the
Foreign Trade Bank, North Korea's main foreign exchange bank, with
sanctions in March, saying it was "a key financial node" in North
Korea's nuclear and missile proliferation activities. The bank had not
been named among the institutions targeted for asset freezes by expanded
UN Security Council sanctions introduced in January and March.
Other countries such as
Japan and Australia have since joined the US in applying sanctions
against Foreign Trade Bank, but co-operation from banks in China, North
Korea's closest economic partner, is essential in the efforts to choke
off cash flows.
North Korea: A smuggler's paradise
A drive to "put pressure
on Beijing to pressure Pyongyang" needs to be at the heart of
Washington's policy on North Korea, according to Kurt Campbell, until
February the US assistant secretary of state for east Asia.
"Bank of China has sent
North Korea's Foreign Trade Bank a notice that it has closed its account
and has also halted all fund transfers related to this account," Bank
of China said on Tuesday. It declined to provide any details about how
much money was affected or the timing of the move.
Bank of China is the
country's biggest bank for foreign exchange transactions, so the account
closure could hurt the North Korean institution. But the impact is
likely to be minimal unless imposed across the board by all Chinese
banks because other institutions, including small regional entities, are
also capable of handling foreign currency deals.
"This is part of a
ratcheting up of pressure but with very clear limits. This is part of
making North Korea feel some limited pain in an attempt to get them back
to talks," said Stephanie Kleine-Ahlbrandt, northeast Asia director at
the International Crisis Group.
The move by Bank of China
may also reflect risk management by the bank itself rather than bigger
diplomatic motives. The US Treasury had warned financial institutions
around the world to be wary of the risks of doing business with Foreign
Trade Bank.
In 2006 after the US
imposed sanctions on Banco Delta Asia, a Macau bank that held North
Korean funds, Bank of China responded in similar fashion by freezing
North Korean-related assets at its Macau branch.
China is by far North
Korea's most important formal ally, and overwhelmingly its biggest
trading partner. Yet the alliance, which dates back to the Korean war,
has long been strained. Analysts say that Pyongyang has persistently
refused Chinese attempts to encourage it to emulate Beijing's sweeping
economic reforms, and China has grown increasingly alarmed by the
regional security implications of North Korea's nuclear weapons
programme.
Earlier this year
Beijing endorsed two sets of new UN Security Council sanctions against
Pyongyang, following its long-range rocket launch in December and
nuclear bomb test in February. Last month China's President Xi Jinping
said that "no country should be allowed to throw a region and even the
whole world into chaos for selfish gains" -- a comment widely
interpreted as a rebuke of North Korea.
Many Chinese businBest place in the world to be a mother is...
A mother breastfeeds her baby at the Binza maternity hospital in the Democratic Republic of Congo on Tuesday.
STORY HIGHLIGHTS
- Finland ranked as best country for mothers in Save the Children's 14th Mothers' Index
- Index intended to illustrate link between maternal and child well-being
- Each year, nearly 3M babies die within first month of life; 287,000 women die from pregnancy or childbirth
- Sub-Saharan African countries ranked as the ten worst places to be a mother
The index, part of the group's annual State of the World's Mothers report,
is intended to illustrate the link between maternal and child
well-being. Each year, nearly three million babies die within their
first month of life -- more than a third die on their day of birth --
and 287,000 women die from pregnancy or childbirth, according to the
report.
The index ranked
countries according to five indicators of a mother's well-being:
maternal health (the risk of maternal mortality); children's well-being
(the mortality rate of children under five); educational status (number
of years of formal schooling a woman receives); and political status
(the participation of women in national government).
Finland was followed
closely by its Nordic neighbors and other Western European countries.
Australia was the only non-European country to place in the top 10.
The United States ranked
30th, performing poorly in under-five mortality rates, maternal death,
and political participation, compared to other highly-developed
countries.
Industrialized countries
account for only 1% of newborns dying on their first day of life, but
among them the U.S. has the highest mortality rate, with approximately
11,300 deaths each year. The report attributed this to the country's
high rate of premature births (one in eight births) -- the second
highest in the industrialized world.
The U.S. also has the
highest teenage birth rate of any industrialized country -- and teenage
mothers in the U.S. tend to have less education, prenatal care, and
financial resources than their older counterparts.
Sub-Saharan African
countries ranked as the 10 worst places to be a mother, with the
Democratic Republic of the Congo coming in last place.
While newborn, child, and
maternal death rates have declined across the developing world in the
past two decades, the report found that progress has been the slowest in
this region. Developing countries lack basic healthcare for women and
their babies before, during, and after delivery, accounting for the
majority of newborn and maternal deaths.
The Mothers' Index
ranked 176 countries -- all countries are included except those with
insufficient data or a national population below 100,000.
Members of Boeing's Aircraft On
Ground (AOG) team display components of the new Dreamliner battery
system after an ANA 787 test flight late last month. To implement the
fix, Boeing moved a small army of technicians to 13 international
locations.
(CNN) -- It was a monumental challenge, a logistical effort Boeing
had never faced before: simultaneously moving a small army of
technicians to 13 international locations, transporting 15 tons of tools
per repair kit, and installing newly designed equipment in the field,
taking five days per airplane working around the clock in two 12-hour
shifts.
Dreamliner in the sky again
The Dreamliner can do THAT?
Behind the scenes: Boeing's Dreamliner battery fix
Members of Boeing's Aircraft On
Ground (AOG) team display components of the new Dreamliner battery
system after an ANA 787 test flight late last month. To implement the
fix, Boeing moved a small army of technicians to 13 international
locations.
HIDE CAPTION
The battery fix
STORY HIGHLIGHTS
- Exclusive interview with Boeing unit that handled the Dreamliner fix
- Boeing built mockups of 787 battery bay
- Work was tedious rather than onerous, Boeing says
- Fix involved multiple parts of Boeing's enterprise
The goal: get 50 new 787 Dreamliners back in service as quickly as possible following a three-month grounding.
Boeing's pride had been
stomped on by the first ever grounding of one of its airliners. Pride
and a commitment for customer service meant going all out for five
disappointed, sometimes cantankerous customers.
The task fell to Boeing's
Commercial Aviation Services, or CAS, to complete a task unprecedented
in its scale. Elements have been revealed by Boeing's chief 787 program
engineer, Mike Sinnett, in various press conferences.
Dreamliner in the sky again
The Dreamliner can do THAT?
Below is the inside story
of the planning process, the first time CAS has granted an interview
about its planning and implementation process.
Outlining how CAS reacted to the two now famous lithium-ion battery incidents is the head of CAS, Louis J. Mancini, senior vice president, and James Testin, managing director of AOG (Aircraft On Ground) Aircraft Services. I spoke with them at the company's Commercial Airplane headquarters in Renton, Washington.
Single 'meltdown' to worldwide grounding
The first incident involved Japan Air Lines on the ground at Boston Logan Airport
on January 7. There was a battery meltdown, a "propagation" of eight
cells, followed by a fire, which was confined to the electronics bay
where the battery was housed.
CAS was already planning to repair the JAL 787 when another battery incident occurred January 15 on an airborne ANA
flight shortly after takeoff in Japan. An emergency landing and
evacuation followed. Inspection revealed another propagation incident,
but this time no fire.
What began as a typical
repair reaction by CAS to the JAL incident became an international
crisis a day later on January 16 when the U.S. Federal Aviation
Administration grounded the six U.S.-registered 787s operated by United
Airlines. Regulatory authorities worldwide followed suit.
Small online retailers, like Kevin Hickey, worry about the costs of complying with an Internet sales tax.
The law would apply to online sellers that have total annual sales of
at least $1 million outside of states where they have physical presence.
Justin Krauss is worried about the paperwork burden it would place on his tiny company, Garage Flooring.
His business has annual revenues just above the million dollar threshold and racks up as many as 36,000 transactions a year. The vast majority are outside his home base in Grand Junction, Colo.
There are only four states that have no sales tax. Krauss would have to cut quarterly checks to the other 46.
"I didn't sign up to be a tax collector," he said. "The federal and state governments are putting the burden on small businesses."
Related: What an Internet sales tax will cost you
Krauss says he'd have to update his accounting software, hire a computer programmer to update his virtual shopping cart system, then continuously file a steady stream of paperwork. The initial effort could cost him $40,000, he estimates.
After that, he could rely on an accounting software provider to process transactions and file the paperwork for about $4,000 a year. It's not a huge sum, but Krauss argues most online retailers are operating on thin profit margins already.
"That's coming out of somebody's paycheck," Krauss said. "That's a Christmas bonus that's not being received."
Natalie Mai, a small business tax attorney in Oklahoma City, doesn't represent Krauss. But she said many online shops of similar size won't be able to bear the cost of compliance. Even storefronts that only deal with one sales tax rate have a difficult time when business gets overwhelming and ledgers get messy.
"If you're a mom-and-pop shop online, I doubt you'll be able to stay in business," she said.
There are maybe 7,500 businesses that would be affected by the law, according to a study commissioned by Amazon, which has voiced strong support for the bill.
Online retailers call Internet sales tax a 'nightmare'
Small online retailers, like Kevin Hickey, worry about the costs of complying with an Internet sales tax.
NEW YORK (CNNMoney)
The nation is one step closer to an Internet sales tax that some online retailers think would be compliance hell.
Online retailers would have to start collecting sales tax upfront. They'd also be forced to send payments to local governments across the country. The "Marketplace Fairness Act" passed the Senate but faces a higher hurdle in the House of Representatives before becoming law.Justin Krauss is worried about the paperwork burden it would place on his tiny company, Garage Flooring.
His business has annual revenues just above the million dollar threshold and racks up as many as 36,000 transactions a year. The vast majority are outside his home base in Grand Junction, Colo.
There are only four states that have no sales tax. Krauss would have to cut quarterly checks to the other 46.
"I didn't sign up to be a tax collector," he said. "The federal and state governments are putting the burden on small businesses."
Related: What an Internet sales tax will cost you
Krauss says he'd have to update his accounting software, hire a computer programmer to update his virtual shopping cart system, then continuously file a steady stream of paperwork. The initial effort could cost him $40,000, he estimates.
After that, he could rely on an accounting software provider to process transactions and file the paperwork for about $4,000 a year. It's not a huge sum, but Krauss argues most online retailers are operating on thin profit margins already.
"That's coming out of somebody's paycheck," Krauss said. "That's a Christmas bonus that's not being received."
Natalie Mai, a small business tax attorney in Oklahoma City, doesn't represent Krauss. But she said many online shops of similar size won't be able to bear the cost of compliance. Even storefronts that only deal with one sales tax rate have a difficult time when business gets overwhelming and ledgers get messy.
"If you're a mom-and-pop shop online, I doubt you'll be able to stay in business," she said.
There are maybe 7,500 businesses that would be affected by the law, according to a study commissioned by Amazon, which has voiced strong support for the bill.
Tanzania: NDC Needs U.S.$500 Million for Development
By Kenan Kalagho, 16 July 2013
Dar es Salaam — The National Development
Corporation (NDC) is looking for $500 million to set up a soda ash
factory. This would enable them to exploit over one million metric tones
of soda ash deposits in Lake Natron, bordering with Kenya.
Soda ash, known chemically as sodium carbonate, is a key raw material for glass, chemicals, soaps and detergents and NDC believes the proposed plant could earn the country $300 million a year and create 500 jobs. Tanzania President Jakaya Kikwete said the soda ash plant would boost the country's economy and that the government will hold a 46% stake in the project through the NDC, once it reaches a consensus with any of the investors. The plans to mine and build a factory in the lake surroundings have however been strongly opposed by several activists.
Some say the proposed plans pose a negative effect on the flamingo birds population in the area and could impact badly on tourists numbers.
Others also say that the rare flora and fauna, will be steadily destroyed.
However, the NDC's Corporate Affairs Manager, Abel Ngapemba told East African Business Week they are still keen on investing in factory. He said more research is needed in order not to affect the ecology of the flamingo breeding sites in the area. Ngapemba said it was important to consider a careful research study, considering that 70% of the world flamingo population hatch in the area. Anything affecting their ecological will mean reducing the number of the world flamingos as well.
Ngapemba added that the whole process of investment could take time as the investor need to be satisfied with the ongoing research that requires not disturbing the breeding sites of flamingos.
Then the government would proceed with the signing of a Memorandum of Understanding (MoU) and other logistics before the deal can finally kick off.
He said NDC has already discovered the type of drilling that can be applied without affecting the flamingos environment and this will all depend on the investor to agree on the said type of drilling.
Despite the opposition from residents and environmentalists, the Tanzania government is still pushing ahead with the construction of a soda-ash factory near the Lake Natron. In 2006 an Indian firm, Tata Chemicals, (part of the Tata Group) wanted to partner with NDC to set up a soda ash factory at Engaruka area, approximately 50km north-east of Lake Natron but the deal collapsed.
The government has so far announced that there is approximately 460 billion cubic litres of soda ash that has been discovered at the Engaruka area, 50 kilometres from Lake Natron.
Experts say its characteristics of multiplying itself at 4 million cubic litres per year this means that the reserves keep growing every year.
Soda ash, known chemically as sodium carbonate, is a key raw material for glass, chemicals, soaps and detergents and NDC believes the proposed plant could earn the country $300 million a year and create 500 jobs. Tanzania President Jakaya Kikwete said the soda ash plant would boost the country's economy and that the government will hold a 46% stake in the project through the NDC, once it reaches a consensus with any of the investors. The plans to mine and build a factory in the lake surroundings have however been strongly opposed by several activists.
Some say the proposed plans pose a negative effect on the flamingo birds population in the area and could impact badly on tourists numbers.
Others also say that the rare flora and fauna, will be steadily destroyed.
However, the NDC's Corporate Affairs Manager, Abel Ngapemba told East African Business Week they are still keen on investing in factory. He said more research is needed in order not to affect the ecology of the flamingo breeding sites in the area. Ngapemba said it was important to consider a careful research study, considering that 70% of the world flamingo population hatch in the area. Anything affecting their ecological will mean reducing the number of the world flamingos as well.
Ngapemba added that the whole process of investment could take time as the investor need to be satisfied with the ongoing research that requires not disturbing the breeding sites of flamingos.
Then the government would proceed with the signing of a Memorandum of Understanding (MoU) and other logistics before the deal can finally kick off.
He said NDC has already discovered the type of drilling that can be applied without affecting the flamingos environment and this will all depend on the investor to agree on the said type of drilling.
Despite the opposition from residents and environmentalists, the Tanzania government is still pushing ahead with the construction of a soda-ash factory near the Lake Natron. In 2006 an Indian firm, Tata Chemicals, (part of the Tata Group) wanted to partner with NDC to set up a soda ash factory at Engaruka area, approximately 50km north-east of Lake Natron but the deal collapsed.
The government has so far announced that there is approximately 460 billion cubic litres of soda ash that has been discovered at the Engaruka area, 50 kilometres from Lake Natron.
Experts say its characteristics of multiplying itself at 4 million cubic litres per year this means that the reserves keep growing every year.
Tanzania: Yes, Many Tanzanians Deserve Banking Services
18 July 2013
PRESIDENT Jakaya Kikwete on Tuesday revealed
the government plans to scale up banking services and cover at least
half of the country's 45 million population within the next two years.
Industry sources say that at present only 14 per cent of the population access banking and financial services, mostly those living in urban centres. Since the country liberalised financial services in 1992, the number of banks has increased from around five to over 50 at present, but most of them are based in Dar es Salaam and a few urban centres such as Arusha, Mwanza and Mbeya.
Most upcountry regions and districts are served by former state owned banks, including the National Microfinance Bank (NMB), National Bank of Commerce (NBC), CRDB Bank and the Tanzania Postal Bank (TPB). A few privately-owned banks including Exim Bank, Akiba Commercial Bank and Azania Commercial Bank (ACB) have ventured to establish branches and offices upcountry.
Some of the banks are reluctant to go up-country and rural to avoid overhead and other operational costs involved, while others claim that many people in rural areas were poor and could not make banks operate profitably.
In so doing millions of Tanzanians living in rural areas are denied access to important financial services including loans to finance purchase of inputs such as fertiliser, herbicides and improved seeds and farming implements like tractors and power tillers.
These people who are being denied access to financial services are the country's true bread-winners, since they are the ones who grow important export crops such as coffee, cotton, cashew nut, tobacco and tea.
It is encouraging to note that the Fourth Phase Government under President Kikwete is now turning its focus to people in rural areas other than the urban-based elites. Some bankers have already teamed up with telecom firms to access individuals in both rural areas and urban centres through mobile phones.
The country is now witnessing up to 1.7tri/- changing hands every month through mobile phone cash transfers. Some of transactions involve people in remote rural areas. It is hoped that all banking institutions in Tanzania will adopt such transactions in a quest to reach as many people as possible and perhaps beyond the government's 50 per cent target by the year 2015.
Industry sources say that at present only 14 per cent of the population access banking and financial services, mostly those living in urban centres. Since the country liberalised financial services in 1992, the number of banks has increased from around five to over 50 at present, but most of them are based in Dar es Salaam and a few urban centres such as Arusha, Mwanza and Mbeya.
Most upcountry regions and districts are served by former state owned banks, including the National Microfinance Bank (NMB), National Bank of Commerce (NBC), CRDB Bank and the Tanzania Postal Bank (TPB). A few privately-owned banks including Exim Bank, Akiba Commercial Bank and Azania Commercial Bank (ACB) have ventured to establish branches and offices upcountry.
Some of the banks are reluctant to go up-country and rural to avoid overhead and other operational costs involved, while others claim that many people in rural areas were poor and could not make banks operate profitably.
In so doing millions of Tanzanians living in rural areas are denied access to important financial services including loans to finance purchase of inputs such as fertiliser, herbicides and improved seeds and farming implements like tractors and power tillers.
These people who are being denied access to financial services are the country's true bread-winners, since they are the ones who grow important export crops such as coffee, cotton, cashew nut, tobacco and tea.
It is encouraging to note that the Fourth Phase Government under President Kikwete is now turning its focus to people in rural areas other than the urban-based elites. Some bankers have already teamed up with telecom firms to access individuals in both rural areas and urban centres through mobile phones.
The country is now witnessing up to 1.7tri/- changing hands every month through mobile phone cash transfers. Some of transactions involve people in remote rural areas. It is hoped that all banking institutions in Tanzania will adopt such transactions in a quest to reach as many people as possible and perhaps beyond the government's 50 per cent target by the year 2015.
Tanzania: Yes, Many Tanzanians Deserve Banking Services
18 July 2013
PRESIDENT Jakaya Kikwete on Tuesday revealed
the government plans to scale up banking services and cover at least
half of the country's 45 million population within the next two years.
Industry sources say that at present only 14 per cent of the population access banking and financial services, mostly those living in urban centres. Since the country liberalised financial services in 1992, the number of banks has increased from around five to over 50 at present, but most of them are based in Dar es Salaam and a few urban centres such as Arusha, Mwanza and Mbeya.
Most upcountry regions and districts are served by former state owned banks, including the National Microfinance Bank (NMB), National Bank of Commerce (NBC), CRDB Bank and the Tanzania Postal Bank (TPB). A few privately-owned banks including Exim Bank, Akiba Commercial Bank and Azania Commercial Bank (ACB) have ventured to establish branches and offices upcountry.
Some of the banks are reluctant to go up-country and rural to avoid overhead and other operational costs involved, while others claim that many people in rural areas were poor and could not make banks operate profitably.
In so doing millions of Tanzanians living in rural areas are denied access to important financial services including loans to finance purchase of inputs such as fertiliser, herbicides and improved seeds and farming implements like tractors and power tillers.
These people who are being denied access to financial services are the country's true bread-winners, since they are the ones who grow important export crops such as coffee, cotton, cashew nut, tobacco and tea.
It is encouraging to note that the Fourth Phase Government under President Kikwete is now turning its focus to people in rural areas other than the urban-based elites. Some bankers have already teamed up with telecom firms to access individuals in both rural areas and urban centres through mobile phones.
The country is now witnessing up to 1.7tri/- changing hands every month through mobile phone cash transfers. Some of transactions involve people in remote rural areas. It is hoped that all banking institutions in Tanzania will adopt such transactions in a quest to reach as many people as possible and perhaps beyond the government's 50 per cent target by the year 2015.
Industry sources say that at present only 14 per cent of the population access banking and financial services, mostly those living in urban centres. Since the country liberalised financial services in 1992, the number of banks has increased from around five to over 50 at present, but most of them are based in Dar es Salaam and a few urban centres such as Arusha, Mwanza and Mbeya.
Most upcountry regions and districts are served by former state owned banks, including the National Microfinance Bank (NMB), National Bank of Commerce (NBC), CRDB Bank and the Tanzania Postal Bank (TPB). A few privately-owned banks including Exim Bank, Akiba Commercial Bank and Azania Commercial Bank (ACB) have ventured to establish branches and offices upcountry.
Some of the banks are reluctant to go up-country and rural to avoid overhead and other operational costs involved, while others claim that many people in rural areas were poor and could not make banks operate profitably.
In so doing millions of Tanzanians living in rural areas are denied access to important financial services including loans to finance purchase of inputs such as fertiliser, herbicides and improved seeds and farming implements like tractors and power tillers.
These people who are being denied access to financial services are the country's true bread-winners, since they are the ones who grow important export crops such as coffee, cotton, cashew nut, tobacco and tea.
It is encouraging to note that the Fourth Phase Government under President Kikwete is now turning its focus to people in rural areas other than the urban-based elites. Some bankers have already teamed up with telecom firms to access individuals in both rural areas and urban centres through mobile phones.
The country is now witnessing up to 1.7tri/- changing hands every month through mobile phone cash transfers. Some of transactions involve people in remote rural areas. It is hoped that all banking institutions in Tanzania will adopt such transactions in a quest to reach as many people as possible and perhaps beyond the government's 50 per cent target by the year 2015.
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