Former NSSF boss Dau on the lessons that Tanzania can learn from Malaysia

 

Tanzania's ambassador to Malaysia, Dr Ramadhan Dau, Makes a point during a recent interview with The Citizen. PHOTO | SUNDAY GEORGE

By Louis Kalumbia

Summary

·         Tanzania has a lot to learn from the Southeast Asian country because despite sharing the same economic status during independence, Malaysia is now ahead development-wise

Dar es Salaam. Tanzania’s ambassador to Malaysia, Mr Ramadhan Dau, says Tanzania can use institutions to attain its development goals in the same way that Malaysia has done.

He names some of the institutions that have played an important role in Malaysia’s development and in poverty alleviation as the Bantuan Prihatin Nasional (BPN) and the Federal Land Development (FELDA). Others are the Employees Provident Fund (EPF) and Tabung Haji.

Dr Dau said this during an exclusive interview with The Citizen. He was responding to a question on Malaysian models that Tanzania may use for people-centred development. Speaking on the models, Dr Dau said the Malaysian government has introduced the Bantuan Prihatin Nasional (BPN) bank, which parents use to open accounts for their children.

Dr Dau said parents would continue depositing money into their children’s accounts until the latter are old enough to continue making deposits on their own.

“Through the mutual funds, BPN collects billions of dollars that are ultimately invested in the implementation of development projects such as construction of roads, airports, ports, bridges, electricity and several others,” he said.

“Basing on Tanzania’s population, more money could be collected through this system that could be helpful in stimulating the country’s economy and development,” added the envoy.

Another public institution involved in land development is FELDA. This specialises in carrying out agricultural projects connected to palm oil farming, which significantly boosts Malaysia’s economy.

“FELDA is granted land by farmers through local authorities for investment in different areas, such as palm oil farming. Farmers who have granted their land to the company become its shareholders. The institution’s responsibility is to provide capital for the joint project,” he said.

“Cultivated palm oil is harvested and processed in a pre-existing processing facility, with the two parties splitting profits at the end of the year. Farmers receive shares according to the size of land granted,” added Dr Dau.

He said a farmer could reap up to $5,000 (Sh11.5 million) or $10,000 (Sh23 million) at the end of the year which is a huge amount.

He said shareholders who invest in FELDA, a public institution with a thriving economic capacity, have a better chance of obtaining loans from various financial institutions.

“These loans enable them to invest in other economic activities, thereby contributing significantly to poverty alleviation,” he said.

The envoy, who doubles as the long-serving NSSF director general said the EPF is similar to Tanzania’s Public Service Social Security Fund (PSSSF), NSSF and the Zanzibar Social Security Fund (ZSSF).

He said the funds with a vibrant economic base sourced from workers’ and employers’ contributions aimed to benefit the working group during retirement.

According to him, EPF invests the money in projects that foster the nation’s economic prosperity.

“The institution has constructed toll roads and invested in 10,000 MW of power generation projects. The electricity is sold to the state power utility company, Tenaga,” he said.

According to him, a reliable supply of electricity significantly attracts investment in different sectors, ultimately stimulating economic growth.

Regarding Tabung Haji, the envoy said that as a country with 65 percent Muslims, Malaysians are supposed to wait 40 to 60 years for the arrival of their quota to attend Hajj.

He said the institution is required to ensure that citizens fulfil this important religious obligation by collecting contributions from Malaysians from childhood.

“Parents begin contributing for their children at birth, and children continue to contribute once they reach maturity age. This makes Tabung Haji among the wealthiest institutions,” he said.

Dr Dau added that because the money collected is expected to be used many years later, it is invested in the implementation of development projects such as roads, electricity, and others.

He said during independence in 1957, poverty was at 85 percent in Malaysia and Gross Domestic Product (GDP) per capita at below $100 like Tanzania’s.

“However, the minister in the Prime Minister’s Office said as of September 2022, Malaysia had only 136,000 poor families, with targets afoot to completely alleviate poverty by 2025,” he said.

Malaysia has a population of 32 million, almost half that of Tanzania, and 300,000 square kilometers of land as compared to Tanzania’s 945,000 square kilometers.

“The GDP per capita of Malaysia stands at $15,000, as compared to the $1,100 that Tanzania is grappling with. We have a lot to learn from Southeast Asia because, despite sharing the same economic status during independence, we are now adversely lagging behind,” he said.

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