Application of Common Law in Tanzania

In Tanzania we have the laws relating to investment and commercial transactions though some of them
are squatted. The same applies to the United Kingdom where do also have the laws relating to
investments and commercial transactions. But, in United Kingdom do have strong and well organized
laws relating to commercial transactions. For example, in Tanzania now there is no dedicated consumer
protection law. Instead we depend much from the competition law which contains specific provisions
that are usually found in separate consumer protection legislation [29] . The Fair Trade Practice Act [30]
, exhaustively prescribes rules for the protection of the interests of consumers. For example, the law
prohibits misleading, deceptive conduct.

The Law relating to sale of Goods Act [31] (Referred to as the SOGA), in Tanzania covers some of the
issues such as passing of property, risk and frustration, remedies for the seller and buyer [32] , price and
acceptance of an offer.

The law that relating to investment and commercial transaction in the United Kingdom are:

The law relating to Supply of Goods and Services Act 1982, the Consumer Protection Act 1987, Sale and
Supply of Goods Act 1994, and Enterprise Act 2002.

Thus, in Tanzania due to scattered law relating to consumer protection there is lack of implementation
of those laws. Though this is party to the consumers themselves but there is a need to give them
knowledge at least to know that there are also protected.
In Tanganyika Garage Ltd v. Marcel G. Mafuruki [33] , where it was held that:
“ Where the circumstances of a contract are not provided for in the codified law of contract in Tanzania,
one must fall back on the English common law"
The above phrase simply means that Tanzanian despite of having the knowledge that there is no much
protection laws relating to the buyers and sellers but still the courts have the high chances of referring
to the common law especially when there is a need for that.
1. Introduction

The main objective of this document is to synthesize the main aspects of the four major theories of
development: modernization, dependency, world-systems and globalization. These are the principal
theoretical explanations to interpret development efforts carried out especially in the developing
countries. These theoretical perspectives allow us not only to clarify concepts, to set them in economic
and social perspectives, but also to identify recommendations in terms of social policies.

For the purposes of this paper, the term development is understood as a social condition within a
nation, in which the authentic needs of its population are satisfied by the rational and sustainable use of
natural resources and systems. This utilization of natural resources is based on a technology, which
respects the cultural features of the population of a given country. This general definition of
development includes the specification that social groups have access to organizations, basic services
such as education, housing, health services, and nutrition, and above all else, that their cultures and
traditions are respected within the social framework of a particular country.

In economic terms, the aforementioned definition indicates that for the population of a country, there
are employment opportunities, satisfaction -at least- of basic needs, and the achievement of a positive
rate of distribution and redistribution of national wealth. In a political sense this definition emphasizes
that governmental systems have legitimacy not only in terms of the law, but also in terms of providing
social benefits for the majority of the population. (1)

2. Theory of Modernization

According to Alvin So, there are three main and historical elements which were favorable to the
inception of the modernization theory of development after the Second World War. First, there was the
rise of the United States as a superpower. While other Western nations, such as Great Britain, France,
and Germany, were weakened by World War II, the United States emerged from the war strengthened,
and became a world leader with the implementation of the Marshall Plan to reconstruct war-torn
Western Europe. (2)

Second, there was the spread of a united world communist movement. The Former Soviet Union
extended its influence not only to Eastern Europe, but also to China and Korea. Third, there was the
disintegration of European colonial empires in Asia, Africa and Latin America, giving birth to many new
nation-states in the Third World. These nascent nation-states were in search of a model of development
to promote their economy and to enhance their political independence. (3)

According to the modernization theory, modern societies are more productive, children are better
educated, and the needy receive more welfare. According to Smelser’s analysis, modern societies have
the particular feature of social structural differentiation, that is to say a clear definition of functions and
political roles from national institutions. Smelser argues that although structural differentiation has
increased the functional capacity of modern organizations, it has also created the problem of
integration, and of coordinating the activities of the various new institutions. (4)

In a political sense, Coleman stresses three main features of modern societies: a) Differentiation of
political structure; b) Secularization of political culture -with the ethos of equality-, which c) Enhances
the capacity of a society’s political system. (5)

The major assumptions of the modernization theory of development basically are: Modernization is a
phased process; for example Rostow has 5 phases according to his theory of economic development for
a particular society, and I will mention them later. Modernization is a homogenizing process, in this
sense, we can say that modernization produces tendencies toward convergence among societies, for
example, Levy (1967, p. 207) maintains that : “as time goes on, they and we will increasingly resemble
one another because the patterns of modernization are such that the more highly modernized societies
become, the more they resemble one another”. (6) Modernization is a europeanization or
americanization process; in the modernization literature, there is an attitude of complacency toward
Western Europe and the United States. These nations are viewed as having unmatched economic
prosperity and democratic stability (Tipps: 1976, 14). In addition, modernization is an irreversible
process, once started modernization cannot be stopped. In other words, once third world countries
come into contact with the West, they will not be able to resist the impetus toward modernization. (7)

Modernization is a progressive process which in the long run is not only inevitable but desirable.
According to Coleman, modernized political systems have a higher capacity to deal with the function of
national identity, legitimacy, penetration, participation, and distribution than traditional political
systems. Finally, modernization is a lengthy process. It is an evolutionary change, not a revolutionary
one. It will take generations or even centuries to complete, and its profound impact will be felt only
through time. All these assumptions are derived from European and American evolutionary theory. (8)

There is also another set of classical assumptions based more strictly on the functionalism-
structuralism theory which emphasizes the interdependence of social institutions, the importance of
structural variables at the cultural level, and the built in process of change through homeostasis
equilibrium. These are ideas derived especially from Parsons’ sociological theories. (9)

These assumptions are as follows: a) Modernization is a systematic process. The attribute of

modernity forms a consistent whole, thus appearing in a cluster rather than in isolation; (10) b)
Modernization is a transformative process; in order for a society to move into modernity its traditional
structures and values must be totally replaced by a set of modern values; (11) and c) Modernization is
an imminent process due to its systematic and transformative nature, which builds change into the
social system.

One of the principal applications of the modernization theory has been the economic field related to
public policy decisions. From this perspective, it is very well known that the economic theory of
modernization is based on the five stages of development from Rostow’s model. In summary, these five
stages are: traditional society, precondition for takeoff, the takeoff process, the drive to maturity, and
high mass consumption society. According to this exposition, Rostow has found a possible solution for
the promotion of Third World modernization. If the problem facing Third World countries resides in
their lack of productive investments, then the solution lies in the provision of aid to these countries in
the form of capital, technology, and expertise. The Marshall Plan and the Alliance for Progress in Latin
America, are examples of programs which were influenced by Rostow’s political theories. (12)

The strengths of modernization theory can be defined in several aspects. First, we can identify the basis
of the research focus. Despite the fact that the main studies of modernization were carried out by a
psychologist, a social psychologist, a sociologist of religion and a political sociologist, other authors have
extended modernization theory into other spheres. For example, Bellah examines the role of the
Tokugawas religion on pajanes economic development in South-East Asia with effects on villages of
Cambodia, Laos and Burma; Lipset addresses the possible role of economic development in the
democratization of Third World countries, and Inkeles discusses the consequences of the modernization
process for individual attitudes and behavior. (13)

A second feature of the modernization perspective is the analytical framework. Authors assume that
Third World countries are traditional and that Western countries are modern. In order to develop, those
poor nations need to adopt Western values. In third place, the methodology is based on general
studies; for example the expositions regarding the value factors in the Third World, and the
differentiation between unstable democracies, dictatorships and stable dictatorships.

Modernization theory, on the other hand, was popular in the 1950s, but was under heavy attack at the
end of the 60s. Criticisms of the theory include the following: First, development is not necessarily
unidirectional. This is an example of the ethnocentricity of Rostow’s perspective. Second, the
modernization perspective only shows one possible model of development. The favored example is the
development pattern in the United States. Nevertheless, in contrast with this circumstance, we can see
that there have been development advances in other nations, such as Taiwan and South Korea; and we
must admit that their current development levels have been achieved by strong authoritarian regimes.
(14)

A second set of critiques of the modernization theory regards the need to eliminate traditional values.
Third World countries do not have an homogeneous set of traditional values; their value systems are
highly heterogeneous. For example Redfield 1965, distinguishes between the great traditional values
(values of the elites), and the little tradition (values of the masses). (15) A second aspect for criticism
here is the fact that traditional and modern values are not necessarily always mutually exclusive: China,
for example, despite advances in economic development continues to operate on traditional values and
this appears to be the same situation in Japan. Moreover, it is not possible to say that traditional values
are always dichotomous from modern status, for example, loyalty to the Emperor can be transformed to
loyalty to the firm.

The similarities between classical modernization studies and new modernization studies can be
observed in the constancy of the research focus on Third World development; the analysis at a national
level; the use of three main variables: internal factors, cultural values and social institutions; the key
concepts of tradition and modernity; and the policy implications of modernization in the sense that it is
considered to be generally beneficial to society as a whole.

However, there are also important distinctions between the classical studies and the new studies of the
modernization school. For example, in the classical approach, tradition is an obstacle to development;
in the new approach, tradition is an additive factor of development. With regard to methodology, the
classical approach applies a theoretical construction with a high-level of abstraction; the new approach
applies concrete case studies given in an historical context. Regarding the direction of development, the
classical perspective uses an unidirectional path which tends toward the United States and European
model, the new perspective prefers a multidirectional path of development. And finally, concerning
external factors and conflict, the classicals demonstrate a relative neglect of external factors and
conflict, in contrast to the greater attention to external factors and conflicts practiced by the new
approach. (16)

3. Theory of Dependency

The foundations of the theory of dependency emerged in the 1950s from the research of the Economic
Commission for Latin America and the Caribbean -ECLAC-. One of the most representative authors was
Raul Prebisch. The principal points of the Prebisch model are that in order to create conditions of
development within a country, it is necessary:

a) To control the monetary exchange rate, placing more governmental emphasis on fiscal rather than
monetary policy;
b ) To promote a more effective governmental role in terms of national development;
c) To create a platform of investments, giving a preferential role to national capitals;
d) To allow the entrance of external capital following priorities already established in national plans for
development;
e) To promote a more effective internal demand in terms of domestic markets as a base to reinforce
the industrialization process in Latin America;
f) To generate a larger internal demand by increasing the wages and salaries of workers, which will in
turn positively affect aggregate demand in internal markets;
g) To develop a more effective coverage of social services from the government, especially to
impoverished sectors in order to create conditions for those sectors to become more competitive; and
h) To develop national strategies according to the model of import substitution, protecting national
production by establishing quotas and tariffs on external markets. (17)

The Prebisch and ECLAC’s proposal were the basis for dependency theory at the beginning of the 1950s.
(18) However, there are also several authors, such as Falleto and Dos Santos who argue that the ECLAC’s
development proposals failed, which only then lead to the establishment of the dependency model.
This more elaborated theoretical model was published at the end of the 1950s and the mid 1960s.
Among the main authors of dependency theory we have: Andre Gunder Frank, Raul Prebisch, Theotonio
Dos Santos, Enrique Cardozo, Edelberto Torres-Rivas, and Samir Amin. (19)

The theory of dependency combines elements from a neo-marxist perspective with Keynes’ economic
theory - the liberal economic ideas which emerged in the United States and Europe as a response to the
depression years of the 1920s-. From the Keynes’ economic approach, the theory of dependency
embodies four main points: a) To develop an important internal effective demand in terms of domestic
markets; b) To recognize that the industrial sector is crucial to achieving better levels of national
development, especially due to the fact that this sector, in comparison with the agricultural sector, can
contribute more value-added to products; c) To increase worker’s income as a means of generating
more aggregate demand in national market conditions; d) To promote a more effective government
role in order to reinforce national development conditions and to increase national standards of living.
(20)

According to Foster-Carter (1973), there are three main differences between the classic orthodox
Marxist movement and the neo-marxist positions, the latter providing a basis for the dependency
theory. First, the classical approach focuses on the role of extended monopolies at the global level, and
the neo-marxist on providing a vision from peripheral conditions. Second, the classical movement
foresaw the need for a bourgeois revolution at the introduction of national transformation processes;
from the neo-marxist position and based on current conditions of Third World countries, it is imperative
“to jump” to a socialist revolution, mainly because it is perceived that national bourgeoisies identify
more strongly with elite positions rather than with nationalistic ones. Third, the classical Marxist
approach perceived the industrial proletariat as having the strength and vanguard for social revolution;
the neo-marxist approach emphasized that the revolutionary class must be conformed by peasants in
order to carry out an armed revolutionary conflict. (21)

Although the modernization school and the dependency school conflict in many areas, they also have
certain similarities, the most important being: a) A research focus on Third World development
circumstances; b) A methodology which has a high-level of abstraction and is focused on the
development process, using nations-state as a unit of analysis; c) The use of polar theoretical structural
visions; in one case the structure is tradition versus modernity -modernization-, in the other it is core
versus periphery -dependency-. (22)

The major hypotheses with regard to development in Third World countries according to the
dependency school are the following: First, in contrast to the development of the core nations which is
self-contained, the development of nations in the Third World necessitates subordination to the core.
Examples of this situation can be seen in Latin America, especially in those countries with a high degree
of industrialization, such as Sao Paulo, Brazil which Andre G. Frank uses as a case study.

Second, the peripheral nations experience their greatest economic development when their ties to the
core are weakest. An example of this circumstance is the industrialization process that took root in Latin
America during the 1930s, when the core nations were focusing on solving the problems that resulted
from the Great Depression, and the Western powers were involved in the Second World War. (23)

A third hypothesis indicates that when the core recovers from its crisis and reestablishes trade and
investments ties, it fully incorporates the peripheral nations once again into the system, and the growth
of industrialization in these regions is stifled. Frank in particular indicates that when core countries
recuperate from war or other crises which have directed their attention away from the periphery, this
negatively affects the balance of payments, inflation and political stability in Third World countries.
Lastly, the fourth aspect refers to the fact that regions that are highly underdeveloped and still operate
on a traditional, feudal system are those that in the past had the closest ties to core. (24)

However, according to Theotonio Dos Santos, the basis of dependency in underdeveloped nations is
derived from industrial technological production, rather than from financial ties to monopolies from the
core nations. In addition to Dos Santos, other classical authors in the dependency school are: Baran,
who has studied conditions in India in the late 1950s; and Landsberg, who has studied the processes of
industrial production in the core countries in 1987. (25)

The principal critics of the dependency theory have focused on the fact that this school does not
provide exhaustive empirical evidence to support its conclusions. Furthermore, this theoretical position
uses highly abstract levels of analysis. Another point of critique is that the dependency movement
considers ties with transnational corporations as being only detrimental to countries, when actually
these links can be used as a means of transference of technology. In this sense, it is important to
remember that the United States was also a colony, and this country had the capacity to break the
vicious cycle of underdevelopment. (26)

The new studies of dependency theory are due to the work of Enrique Cardozo (1979), and Falleto
(1980). These authors take into account the relations that exist in a country in terms of its systemic -
external-, and its sub-systemic -internal- level, and how these relationships can be transformed into
positive elements for the development of peripheral nations. O’Donell studied the case of relative
autonomy between economic and political elements within conditions of Third World countries,
especially those in South East Asia. Evans studied the comparative advantage that Brazil has with its
neighbors in South America, and Gold studied the dependency elements which were operating at the
beginning of the process by which Taiwan constituted itself in a country. (27)

A predominant point of the new dependency studies is that while the orthodox dependency position
does not accept the relative autonomy of government from the powerful elites, the new authors of this
school perceive a margin of movement of national governments in terms of pursuing their own agenda.
These arguments originated mainly from the writings of Nikos Poulantzas. For this political scientist,
governments in Third World countries have a certain amount of autonomy from the real axis of power
within the nation. (28)

One of the main current critiques of the theory of dependency and the theory of modernization is that
they both continue to base their assumptions and results on the nation-state. This is an important point
that allows us to separate these aforementioned schools from the theoretical perspective of world-
systems or globalization theory. These last movements have focused their attention mostly on the
international connections among countries, especially those related to trade, the international financial
system, world technology and military cooperation.

4. Theory of World Systems

A central element from which the theory of world-systems emerged was the different form that
capitalism was taking around the world, especially since the decade of the 1960s. Starting in this
decade, Third World countries had new conditions in which to attempt to elevate their standards of
living and improve social conditions. These new conditions were related to the fact that the
international financial and trade systems began to have a more flexible character, in which national
government actions were having less and less influence. Basically these new international economic
circumstances made it possible for a group of radical researchers led by Immanuel Wallerstein to
conclude that there were new activities in the capitalist world-economy which could not be explained
within the confines of the dependency perspective. These new features were characterized mainly by
the following aspects:

a) East Asia (Japan, Taiwan, South Korea, Hong Kong, and Singapore) continued to experience a
remarkable rate of economic growth. It became more and more difficult to portray this East Asian
economic miracle as “manufacturing imperialism”;
b) There was a widespread crisis among the socialist states which included the Sino-Soviet split, the
failure of the Cultural Revolution, economic stagnation in the socialist states, and the gradual opening of
the socialist states to capitalist investment. This crisis signaled the decline of revolutionary Marxism;
c) There was a crisis in North American capitalism which included the Vietnam War, the Watergate
crisis, the oil embargo of 1975, the combination of stagnation and inflation in the late 1970s, as well as
the rising sentiment of protectionism, the unprecedented governmental deficit, and the widening of the
trade gap in the 1980s, all signaling the demise of American hegemony in the capitalist world-economy.
(29)

These elements created the conditions for the emergence of the world-systems theory. This school had
its genesis at the Fernand Braudel Center for the Study of Economics, Historical Systems, and Civilization
at the State University of New York at Binghamton. Having originated in sociology, the world-systems
school has now extended its impact to anthropology, history , political science, and urban planning. I.
Wallerstein is considered one of the most important thinkers in this theoretical field. At the beginning
of his career he studied the development problems that the recently independent African nations
needed to face taking into account the new capitalist economic and political conditions of the world in
the 1960s. (30)

Wallerstein and his followers recognized that there are worldwide conditions that operate as
determinant forces especially for small and underdeveloped nations, and that the nation-state level of
analysis is no longer the only useful category for studying development conditions, particularly in Third
World countries. Those factors which had the greatest impact on the internal development of small
countries were the new global systems of communications, the new world trade mechanisms, the
international financial system, and the transference of knowledge and military links. These factors have
created their own dynamic at the international level, and at the same time, these elements are
interacting with the internal aspects of each country. (31)

The main assumptions of the world-systems theory establish that: a) There is a strong link between
social sciences - especially among sociology, economics and political disciplines. This school recognizes
that more attention is usually given to the individual development of each one of these disciplines
rather than to the interaction among them and how these interactions affect in real terms the national
conditions of a given society; b) Instead of addressing the analysis of each of the variables, it is
necessary to study the reality of social systems; c) It is necessary to recognize the new character of the
capitalist system. For example, the approach followed by the classical political economy perspective is
based on the conditions of the capitalist system during the industrial revolution in the United Kingdom.
There was concrete evidence to support open competition, more productive patterns in the industrial
sector, and wide groups of population which provided labor for the new established factories. (32)

Today this is not the situation especially when we consider the important economic role of
transnational corporations, the international political climate, the interdependence that affects the
governments of poor nations, and the role of speculative investments. For the world-systems school,
present economic conditions are not fully explainable within traditional development theories. This
criticism of the capitalist system has been present since its birth. Under current international
conditions, there are specific features of monopoly capital, its means of transaction, and its concrete
operations worldwide which have affected international relations among nations to a considerable
degree.

The principal differences between the world-systems approach and the dependency studies are: a) The
unit of analysis in the dependency theory is the nation-state level, for the world-system it is the world
itself; b) Concerning methodology, the dependency school posits that the structural-historical model is
that of the boom and bust of nation states, the world systems approach maintains the historical
dynamics of world-systems in its cyclical rhythms and secular trends; c) The theoretical structure for the
dependency theory is bimodal, consisting of the core and the periphery; according to the world
systems theory the structure is trimodal and is comprised of the core, the semiperiphery and the
periphery; d) In terms of the direction of development, the dependency school believes that the process
is generally harmful; however, in a world systems scenario, there is the possibility for upward and
downward mobility in the world economy; e) The research focus of dependency theorists concentrates
on the periphery; while world systems theorists focus on the periphery as well as on the core, the
semiperiphery and the periphery. (33)

Given the aforementioned characteristics, the world-systems theory indicates that the main unit of
analysis is the social system, which can be studied at the internal level of a country, and also from the
external environment of a particular nation. In this last case the social system affects several nations
and usually also an entire region.

The world systems most frequently studied in this theoretical perspective are systems concerning the
research, application and transference of productive and basic technology; the financial mechanisms,
and world trade operations. In terms of financial resources, this development position distinguishes
between productive and speculative investments. Productive investments are financial resources which
reinforce the manufacturing production in a particular nation, while speculative investments normally
entail fast profits in the stock market, they do not provide a country with a sustainable basis for long
term economic growth, and therefore are more volatile.

When the world-systems theory considers trade mechanisms, it distinguishes between the direct
transactions, which are those who have a greater, more significant and immediate effect on a country;
and those operations which are indirect trade transactions, such as future trade stipulations, and the
speculations on transportation costs, combustibles prices, and forecasts on agricultural crops, when
they depend on weather conditions to obtain their productivity and yield. (34)

5. Theory of Globalization

The theory of globalization emerges from the global mechanisms of greater integration with particular
emphasis on the sphere of economic transactions. In this sense, this perspective is similar to the world-
systems approach. However, one of the most important characteristics of the globalization position is
its focus and emphasis on cultural aspects and their communication worldwide. Rather than the
economic, financial and political ties, globalization scholars argue that the main modern elements for
development interpretation are the cultural links among nations. In this cultural communication, one of
the most important factors is the increasing flexibility of technology to connect people around the
world. (35)

The main aspects of the theory of globalization can be delineated as follows:

a) To recognize that global communications systems are gaining an increasing importance every day,
and through this process all nations are interacting much more frequently and easily, not only at the
governmental level, but also within the citizenry;
b) Even though the main communications systems are operating among the more developed nations,
these mechanisms are also spreading in their use to less developed nations. This fact will increase the
possibility that marginal groups in poor nations can communicate and interact within a global context
using the new technology;
c) The modern communications system implies structural and important modifications in the social,
economic and cultural patterns of nations. In terms of the economic activities the new technological
advances in communications are becoming more accessible to local and small business. This situation is
creating a completely new environment for carrying out economic transactions, utilizing productive
resources, equipment, trading products, and taking advantage of the “virtual monetary mechanisms”.
From a cultural perspective, the new communication products are unifying patterns of communications
around the world, at least in terms of economic transactions under the current conditions;
d) The concept of minorities within particular nations is being affected by these new patterns of
communications. Even though these minorities are not completely integrated into the new world
systems of communications, the powerful business and political elites in each country are a part of this
interaction around the world Ultimately, the business and political elite continue to be the decision
makers in developing nations;
e) Cultural elements will dictate the forms of economic and social structure in each country. These
social conditions are a result of the dominant cultural factors within the conditions of each nation. (36)

The main assumptions which can be extracted from the theory of globalization can be summarized in
three principal points. First, cultural factors are the determinant aspect in every society. Second, it is
not important, under current world conditions to use the nation-state as the unit of analysis, since
global communications and international ties are making this category less useful. Third, with more
standardization in technological advances, more and more social sectors will be able to connect
themselves with other groups around the world. This situation will involve the dominant and non-
dominant groups from each nation.

The theory of globalization coincides with several elements from the theory of modernization. One
aspect is that both theories consider that the main direction of development should be that which was
undertaken by the United States and Europe. These schools sustain that the main patterns of
communication and the tools to achieve better standards of living originated in those more developed
areas. On this point it is important to underline the difference between the modernization perspective
and the globalization approach. The former follows a more normative position -stating how the
development issue should be solved-, the latter reinforces its character as a “positive” perspective,
rather than a normative claim. (37)

Another point in which the modernization and the globalization theories coincide is in terms of their
ethnocentric point of view. Both positions stress the fact that the path toward development is
generated and must be followed in terms of the US and European models. Globalization scholars argue
that this circumstance is a fact in terms of the influence derived from the communications web and the
cultural spread of values from more developed countries.
Globalization theories emphasize cultural factors as the main determinants which affect the economic,
social and political conditions of nations, which is similar to the “comprehensive social school” of Max
Weber’s theories. From this perspective, the systems of values, believes, and the pattern of identity of
dominant -or hegemony- and the alternative -or subordinate- groups within a society are the most
important elements to explain national characteristics in economic and social terms. (38) It is obvious
that for the globalization position this statement from 1920s Weberian theory must apply to current
world conditions especially in terms of the diffusion and transference of cultural values through
communication systems, and they are increasingly affecting many social groups in all nations.

Based on the aforementioned elements it is clear that the globalization and world-systems theories
take a global perspective in determining the unit of analysis, rather than focusing strictly on the nation-
state as was the case in the modernization and dependency schools. The contrasting point between
world-systems theory and globalization, is that the first contains certain neo-marxist elements, while the
second bases its theoretical foundations on the structural and functionalist sociological movement.
Therefore the globalization approach tends more toward a gradual transition rather than a violent or
revolutionary transformation. For the globalists authors, the gradual changes in societies become a
reality when different social groups adapt themselves to current innovations, particularly in the areas of
cultural communication. (39)

The globalization and world-systems theories take into account the most recent economic changes in
world structure and relations that have occurred in the last couple of decades, for example: a) In March
1973, the governments of the more developed nations, began to operate more flexible mechanisms in
terms of exchange rate control. This situation allowed for a faster movement of capital among the
world’s financial centers, international banks, and stock markets; b) Since 1976 trade transactions base
their speculations on the future value of the products, which is reinforced through the more flexible use
of modern technology in information, computers, and in communication systems; c) The computer
revolution of the eighties made it possible to carry out faster calculations and transactions regarding
exchange rates values and investments, which was reinforced by the general use of the fax machine; d)
During the nineties the main challenge is from the Internet which allows the achievement of more rapid
and expansive communication. The Internet is increasingly creating the conditions to reinvigorate the
character of the “virtual economy” in several specific markets.
Under the current conditions, the main aspects that are being studied from the globalization
perspective are: a) New concepts, definitions and empirical evidence for hypotheses concerning
cultural variables and their change at the national, regional and global level; b) Specific ways to adapt
the principles of “comprehensive sociology” to the current “global village” atmosphere; c) Interactions
among the different levels of power from nation to nation, and from particular social systems which are
operating around the world; d) How new patterns of communications are affecting the minorities
within each society; e) The concept of autonomy of state in the face of increasingly flexible
communication tools and international economic ties, which are rendering obsolete the previous
unilateral effectiveness of national economic decisions; and f) How regionalism and multilateralism
agreements are affecting global economic and social integration.
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Chirot, D. Social Change in a Peripheral Society: The creation of a Balkan colony. (New York: Academic
Press, 1993).
Comision Economica para America Latina y el Caribe. Transformacion Productiva con Equidad.
(Santiago, Chile: CEPAL, 1991).
Etzioni. E. Social Change. (New York: Basic Books, 1991).
Foster-Carter, A. "Neo-Marxist Approaches to Development and Underdevelopment". Journal of
Contemporary Asia 3, 1973, 7-33.
Frank, G. Capitalism and Underdevelopment in Latin America. (New York: Monthly Review Press,
1967).
Goldfrank, W. The World-System of Capitalism: Past, and Present. (Beverlly Hills, California: SAGE,
1986).
Gough, I. Economia Politica del Estado de Bienestar. (Madrid, España: Blume, 1992).
Habermas, G. Crisis of Legitimacy (New York: MacMillan, 1992).
Habermas, G. Theory of Social Communication. (New York: MacMillan, 1992).
Hailstones, T. Viewpoints on Supply-Side Economics. (Reston, Virginia: Reston Publs., 1984).
Isuani, E. El Estado Benefactor. Un Paradigma en Crisis. (Buenos Aries, Argentina: Miño y Davila, 1991).
Kaplan, B. Social Change in the Capitalist World. (Beverly Hills, California: SAGE, 1993).
Killing, J. The Quest for Economic Stabilization: The IMF and the Third World. (London: Overseas
Development Institute, 1984).
Levy, M. Social Patterns and Problems of Modernization. (Englewood Cliffs, New Jersey: Prentice-Hall,
1967).
Liz, R. Crecimiento Economico, Empleo y Capacitacion. (Buenos Aires, Argentina: PNUD, 1993).
Lopez, J. Deuda Externa, Politicas de Estabilizacion y Ajuste Estructural en Centroamerica y Panama.
( San Jose, Costa Rica: CSUCA, 1990).
Nath, B. The Sociology and Politics of Development: A Theoretical Study. (London: Routledge & Kegan
Paul, 1990).
Perez, J. Globalizacion y Fuerza Laboral en Centroamerica. (San Jose, Costa Rica: FLACSO, 1993).
Pico, J. Teorias sobre el Estado de Bienestar. (Madrid, España: Siglo XXI editores, 1995).
Portes, A. Labor, Class, and the International System. (New York: Aberdeen, 1992).
Poulantzas, N. Estado y Sociedad en Naciones Dependientes. (Mexico: Siglo XXI editores, 1989).
Redfield, R. Peasant Society and Culture. (Chicago: University of Chicago Press, 1965).
Rodriguez, E. Deuda Externa: El Caso de los Pequeños Paises Latinoamericanos.
(San Jose, Costa Rica: Banco Centroamericano de Integracion Economica, 1989).
Rosa, H. AID y las transformaciones globales en El Salvador. (Managua, Nicaragua: CRIES, 1993).
Ruben, R. Mas Alla del Ajuste: La Contribucion Europea al Desarrollo en Centroamerica. (San Jose,
Costa Rica: DEI, 1991).
Saca, N. Politica de Estabilization y Deuda Externa. (San Salvador, El Salvador: UCA, 1991).
So, A. The South China Silk District. (Albany, New York: SUNY Press, 1986).
Stirton, F. Inside the Volvano: The History and Political Economy of Central America. (Boulder,
Colorado: Westview Press, 1994).
Tipps, D. Modenization Theory and the Comparative Study of Societies: A critical perspective. (New
York: Free Press, 1976).
Wallerstein, I. World-System Analysis. (Standford: Standford University Press, 1987).
Weber, M. The Protestant Ethic and the Spirit of Capitalism. (New York: Scribner, 1988).
Weinberg, B. War on the Land. (London: Zed Books Ltd., 1991).
Zolo, D. Democracia y Complejidad. Un enfoque realista. (Buenos Aires, Argentina: Nueva Visión,
1994).
NOTES
(*) University of Pittsburgh, Graduate School of Public and International Affairs -GSPIA-, July 2001
(1) See Pico, J. Teorias sobre el Estado de Bienestar. (Madrid, España: Siglo XXI editores, 1995), pp. 32-
41.; and Razeto, L. Economia de Solidaridad y Mercado Democratico. (Santiago, Chile: Academia de
Humanismo, 1995), pp. 56-61.
(2) So, A. Social Change and Development. (Newbury Park, California: SAGE, 1991), pp. 17-23. Liz, R.
Crecimiento Economico, Empleo y Capacitacion. (Buenos Aires, Argentina: PNUD, 1993),pp. 27-32.
(3) Chirot, D. Social Change in a Peripheral Society: The creation of a Balkan colony. (New York:
Academic Press, 1993), pp. 32-34; 56-59. Ramirez, N. Pobreza y Procesos Sociodemograficos en
Republica Dominicana. (Buenos Aires, Argentina: PNUD, 1993), pp. 34-42.
(4) See Smelser, N. Toward a Theory of Modernization. (New York: Basic Books, 1964), pp. 268-274.
(5) Ibid, pp. 276-278.
(6) Levy, M. Social Patterns and Problems of Modernization. (Englewood Cliffs, New Jersey: Prentice-
Hall, 1967), pp. 189-207.
(7) Tipps, D. Modenization Theory and the Comparative Study of Societies: A critical perspective. (New
York: Free Press, 1976), pp. 65-77.
(8) See Huntington, S. The Change to Change: Modernization, development and politics. (New York:
Free Press, 1976), pp. 30-31; 45-52.
(9) See So, A. Op. Cit, pp. 92-95.
(10) Hermassi, E. "Changing Patterns in Research on the Third World", Annual Review of Sociology 4,
1978, 239-257.
(11) See Huntington, Op. Cit. Pp. 58-60.
(12) McClelland, D. Bussiness Drive and National Achievement. (New York: Basic Books, 1964), pp. 167-
170.
(13) See, So. Op.Cit. pp. 89, and Vaitsos, C. Una Estrategia Integral para el Desarrollo. (Santo Domingo,
Republica Dominicana: PNUD, 1992), pp. 45-53.
(14) Killing, J. The Quest for Economic Stabilization: The IMF and the Third World. (London: Overseas
Development Institute, 1984), pp. 45-56.
(15) Redfield, R. Peasant Society and Culture. (Chicago: University of Chicago Press, 1965), pp. 35-43.
(16) See So, A. The South China Silk District. (Albany, New York: SUNY Press, 1986).
(17) See Bodenheimer, S. Dependency and Imperialism: The roots of Latin American
underdevelopment. (New York: NACLA, 1970), pp. 49-53.
(18) Prebisch, R. The Economic Development of Latin America and Its Principal Problems. (New York:
United Nations, 1950).
(19) Ibid.
(20) Dos Santos, T. The Structure of Dependence. (Boston: Extending Horizons, 1971). 225-233.
(21) Foster-Carter, A. "Neo-Marxist Approaches to Development and Underdevelopment". Journal of
Contemporary Asia 3, 1973, 7-33.
(22) Friedrichs, R. A Sociology of Sociology. (New York: Free Press, 1970), pp. 34-36.
(23) Frank, G. Capitalism and Underdevelopment in Latin America. (New York: Monthly Review Press,
1967).
(24) Frank, G. Latin America: Underdevelopment and Revolution. (New York: Monthly Review Press,
1969).
(25) Landsberg, M. "Export-led Industrialization in the Third World: Manufacturing Imperialism".
Review of Radical Political Economics, 11, 1979, 50-63.
(26) Dos Santos, T. Op. Cit.
(27) Cardoso, F. and Falleto, E. Dependency and Development in Latin America. (Berkeley: University of
California Press, 1979). Fagen, R. Theories of Development: The question of class strugle. Monthly
Review 35, 1983, 13-24.
(28) Poulantzas, N. Estado y Sociedad en Naciones Dependientes. (Mexico: Siglo XXI editores, 1989).
Pp 56-67; 78-83; 101-112. Alford, R. Los Poderes de la Teoria. Capitalismo, estado y democracia.
(Buenos Aires, Argentina: Editorial Manantial, 1991).
(29) So, A. Social Change and Development, Op.Cit. pp.46-49.
(30) Bergesen, A. Long Waves of Colonial Expansion and Contraction in Studies of the Modern World-
System. (New York: Academic Press, 1984). Goldfrank, W. The World-System of Capitalism: Past, and
Present. (Beverlly Hills, California: SAGE, 1986).

(31) Wallerstein, I. World-System Analysis. (Standford: Standford University Press, 1987).

(32) Wallerstein, I. Africa: The Politics of Unity. (New York: Random House, 1977).
(33) So, A. Op. Cit. Pp. 110-116.
(34) Wallerstein, I. (1987), Op. Cit. Akzin, B. Estado y Nacion. (Mexico: Fondo de Cultura Economica,
1988). Bell, D. El Advenimiento de la Sociedad Post-Industrial. (Madrid: Ed. Alianza, 1987).
(35) Kaplan, B. Social Change in the Capitalist World. (Beverly Hills, California: SAGE, 1993). Gough, I.
Economia Politica del Estado de Bienestar. (Madrid, España: Blume, 1992).
(36) Moore, M. Globalization and Social Change. (New York: Elseiver, 1993). Isuani, E. El Estado
Benefactor. Un Paradigma en Crisis. (Buenos Aries, Argentina: Miño y Davila, 1991).
(37) Portes, A. Labor, Class, and the International System. (New York: Aberdeen, 1992). Held, D.
Modelos de Democracia. (Madrid, España: Alianza Editorial, 1992).
(38) Weber, M. The Protestant Ethic and the Spirit of Capitalism. (New York: Scribner, 1988).
(39) Etzioni. E. Social Change. (New York: Basic Books, 1991). Galbraith, J. La Cultura de la
Satisfaccion. (Buenos Aires: Ariel, 1992). Hirschman, A. De la Economia a la Politica y Mas alla.
(Mexico: Fondo de Cultura Economica, 1987).
After reading this article you will learn about the National Development:- 1. Meaning of National
Development 2. Problems of National Development.

Meaning of National Development:

The term national development is very comprehensive. It includes all aspects of the life of an individual
and the nation.

It is holistic in approach. It is a process of reconstruction and development in various dimensions of a

nation and development of individuals.

ADVERTISEMENTS:

It includes full-growth and expansion of our industries, agriculture, education, social, religious and
cultural institutions. Moreover, national development implies development of a nation as a whole. It can
be best defined as the all-round and balanced development of different aspects and facets of the nation
viz. political, economic, social, cultural, scientific and material.
Facets of National Development

John Vaizey, noted economist defines:

“National development is the total effect of all citizen forces and addition to the stock of physical,
human resources, knowledge and skill.”

ADVERTISEMENTS:

United Nations Decade Report has defined it as:

“National development is growth plus change. Change in turn is social and cultural as well as economic
and qualitative as well as quantitative”.

Broadly, development of the nation encapsulates such parameters as:

(i) Development through a planned national economy,

(ii) Increase in agricultural production through application of modern technical know-how,

(iii) harnessing industrial production,

(iv) Development of human resource,

(v) Application of science and technology in production sector,

(vi) provision of mass education and

ADVERTISEMENTS:
(vi) Provision of various facilities to meet the needs and aspirations of disadvantaged, deprived and
poorest of the poor segments of population.

Problems of National Development:

These are the some of the problems of national development:

(i) Tardy economic growth in terms of G.N.P. and standard of living.

(ii) Large scale unemployment and under-employment.

(iii) Large pool of illiteracy.

(iv) Rapid growth of population.

(v) Challenges of national and emotional integration.

(vi) Inertia to change process.

(vii) Slow process of modernisation.

(viii) Problem of evolving a democratic, socialistic and secular order.

(ix) Incidence of poverty and poor standard of living.

(x) Phenomenon of urbanisation and its allied malaise.

(xi) Lethargic attitude of people to the core value of work and unwillingness to take responsibility.

(xii) Mismatch between moral and scientific values.

(xiii) Rise of phenomenon of brain-drain.

(xiv) Useless and low quality products of institutions of higher learning.

NATIONAL DEVELOPMENT
NATIONAL DEVELOPMENT
(Meaning, Scope & Indicators, Role of Education in National Development)

“National development refers to the ability of a country or countries to improve the social welfare of the
people, for example, by providing social amenities like good education, infrastructure, medical care and
social services.”
Braddell

“ The foundation of National Development is the development-especially development in social,

political, economic, emotional, linguistic and cultural fields”
H.G Johnson

When all the forces and factors endeavor to provide a unity in the integration of national actions and
challenges which encourages the people to meet their aspirations and goals related to their personal
and social benefits which willingly or unknowingly geared to the national progress is known as National
Development.

According to Kothari Commission (1964-66) National Development lies in

a) Confidence in nation
b) Continuous rise in standard of living of masses
c) Reduction of unemployment
d) Equal opportunities for social, political and economic development
e) Good and impartial administration
f) Mutual understanding and sense of co-operation amongst masses

Scope & Indicators of National Development

Scope refers to the range of perceptions, thoughts, or actions and Breadth or opportunity to function.

Education
Political Development
Moral Development
Cultural Development Indicators and Scope
Religious Development
Economical Development
Technological Development

BARRIERS in National Development

1. Casteism:
Caste is an imported part of our social fabric. This was developed in the past on the basis of division of
labour in the society. But now casteism has segregated the society. Unity and integrity has become a
dream in a caste ridden society. The feeling of socially neglected scheduled castes under the suppression
of upper caste ruined the sense of we feeling and unity. It becomes a problem for national
Development.
2. Communalism:
Religions antagonism has posed a serious challenge to national Development . Political manipulation has
projected one religion against the other which resulted in communal riot, bloodbath, mutual, distrust
and disintegration of the country. Large scale illiteracy and superstition are responsible along with other
causes for raise communalism in the country. It is very difficult to promote national Development under
these situations.
3. Linguistic Fanaticism:
Multi-linguism is one of the important characters .e.g. in India it has fifteen officially recognized
languages. There are about 1652 languages are spoken in India which shows its diversities. There is
conflict and riots on the languages issue. People of one language try to establish their language over
others. When Hindi was declared as the national language people of South India resented against this
decision supporting English language. Language issue became a barrier on the way of national
Development
4. Regionalism:
Each regional differs from the other in one or other ways which leads to disintegration of the country.
People of one region compete with the person of other regions which leads to conflict and riots. Land
dispute, language problem are some of the reasons which pose hurdle on the way of national
Development
5. Social Disparity:
Social disparity among the people of different communities, castes and sometime within the community
and caste causes tension and imbalance among the people. Social disparity poses great challenge to
national Development
6. Economic Inequalities:
Economic standard of people in a state depends on the fertility of land, resources available and
manpower management. All the states are not equal in the above matter which leads to economic
backwardness of the people. Even in a state distribution of wealth is not properly done. Day by day poor
becoming poorer and rich become richest this causes tension and conflict. It is a problem for national
Development
7. Unemployement
8. Illiteracy
9. Poverty
10. Educational Disparaties
11. Ignorance
12. Religious Fanaticism
13. Racism
14. Frustrated Youth
15. Economic Differences
16. Lack of National Character
Role Of Education in National Development
Modern and ancient Philosophers have supported the notion of national development and advocated
that education is the most powerful force in developing national development.
1. HRD

2. Emotional Integration

3. Technological Advancements

4. Technical Education

5. Fostering Positive attitude

6. Employment

7. Job oriented Education

8. Removing Illiteracy

9. Educated Elite

10. National Outlook

11. Inculcate Cooperative Responsibility

12. Practical use of Knowledge

13. Strengthen Democratic Principles

14. Acquaintance with one’s talents and virtues

EDUCATION FOR THE DEVELOPMENT OF INDIVIDUAL CAPABILITIES
EDUCATION FOR THE DEVELOPMENT OF INDIVIDUAL CAPABILITIES

The goal of development is the “promotion and expansion of valuable capabilities.” Amritya Sen

Dimensions Of Human Development

Life Knowledge work & Play Relationships Spirituality Participation Inner Peace

Appreciation of beauty Harmony with Non Human World

The concept of individual development is based on capability and capability is an all round human
quality observable in what Sir Toby Weaver describes as 'purposive and sensible' action (Weaver, 1994).
Capability is an integration of knowledge, skills, personal qualities and understanding used appropriately
and effectively - not just in familiar and highly focused specialist contexts but in response to new and
changing circumstances. Capability can be observed when we see people with justified confidence in
their ability to:

• take effective and appropriate actions and decisions

• explain what they are about
• live and work effectively with others; and
• continue to learn from their experiences as individuals and in association with others, in
a diverse and changing society.
WELL BEING
REFINED FUNCTIONING
CAPABILITIES

FUNCTIONING
SKILLS
Capability is a broader concept than that of competence. Competence is primarily about the ability to
perform effectively, concerned largely with the here and now. Capability embraces competence but is
also forward-looking, concerned with the realization of potential.

Education For the Development of Individual Capabilities

1. Inspiring a sense of Purpose

2. Use of Judgment, intelligence and commonsense
3. Providing opportunities to action
4. To think logically, Critically and analytically
5. Inculcation of sense of responsibility
6. Combining Internal and External Capabilities
7. Facilitating Cooperation and Partnership
8. Guiding and mentoring
9. Development of one’s potential for self development
10. Awareness about equality, justice and harmony
11. Development of inborn potentialities- Education helps the child to develop the inborn
potentialities of child providing scope to develop.
12. Modifying behavior- Education helps to modify the past behavior through learning and through
different agencies of education.
13. All-round development- Education aims at the all round development of child-physical, mental,
social, emotional, and spiritual.
14. Preparing for the future- After completion of education the child can earn its livelihood getting
proper education, which has productivity. The education should be imparted according to the own
interest of the child.
15. Developing personality- The whole personality of the child is developed physically, intellectually,
morally, socially, aesthetically and spiritually. He is recognized in the society.
16. Helping for adjustability- Man differs from beast. Man has reasoning and thinking power. Man tries
his best to adjust with his own environment through education.
17. Development of social and moral value: Society is always in tension with narrowism. There is no
social or moral value. Now the man is behaving like an animal. Animality can be changed with moral
education. Education teaches the moral value and social value like co-operation, tolerance, sympathy,
fellow feelings, love affection, respect towards elder, helping the poor and needy persons.
18. Providing opportunity or equality: Indian Constitution has introduced the term ‘equality’ because
we are not getting equal opportunities in all aspects. Education teaches us to give equal opportunities in
all aspects irrespective of caste, creed, color, sex and religion.
19. Development of ethical and moral values
20. Capacity for research and innovation
21. Inculcation of civic and social responsibility- Education helps to make rising generation to
understand its rights and duties as citizens of a democratic country.
22. Training for leadership- The leadership quality of the individual is developed when he participates in
all spheres of social, political, religious and educational activities.
23. National integration- We are living in one country having diversities in respect of color, caste,
language, diet, dress, habits and physical environment.
What is land-use planning?

There is bound to be conflict over land use. The demands for arable land, grazing, forestry, wildlife,
tourism and urban development are greater than the land resources available. In the developing
countries, these demands become more pressing every year. The population dependent on the land for
food, fuel and employment will double within the next 25 to 50 years. Even where land is still plentiful,
many people may have inadequate access to land or to the benefits from its use. In the face of scarcity,
the degradation of farmland, forest or water resources may be clear for all to see but individual land
users lack the incentive or resources to stop it.

Land-use planning is the systematic assessment of land and water potential, alternatives for land use
and economic and social conditions in order to select and adopt the best land-use options. Its purpose is
to select and put into practice those land uses that will best meet the needs of the people while
safeguarding resources for the future. The driving force in planning is the need for change, the need for
improved management or the need for a quite different pattern of land use dictated by changing
circumstances.
All kinds of rural land use are involved: agriculture, pastoralism, forestry, wildlife conservation and
tourism. Planning also provides guidance in cases of conflict between rural land use and urban or
industrial expansion, by indicating which areas of land are most valuable under rural use.

When is land-use planning useful?

Two conditions must be met if planning is to be useful:

• the need for changes in land use, or action to prevent some unwanted change, must be accepted by
the people involved;

• there must be the political will and ability to put the plan into effect.

Where these conditions are not met, and yet problems are pressing, it may be appropriate to mount an
awareness campaign or set up demonstration areas with the aim of creating the conditions necessary
for effective planning.

Making the best use of limited resources

Our basic needs of food, water, fuel, clothing and shelter must be met from the land, which is in limited
supply. As population and aspirations increase, so land becomes an increasingly scarce resource.

Land must change to meet new demands yet change brings new conflicts between competing uses of
the land and between the interests of individual land users and the common good. Land taken for towns
and industry is no longer available for farming; likewise, the development of new farmland competes
with forestry, water supplies and wildlife.

Planning to make the best use of land is not a new idea. Over the years, farmers have made plans
season after season, deciding what to grow and where to grow it. Their decisions have been made
according to their own needs, their knowledge of the land and the technology, labour and capital
available. As the size of the area, the number of people involved and the complexity of the problems
increase, so does the need for information and rigorous methods of analysis and planning.
However, land-use planning is not just farm planning on a different scale; it has a further dimension,
namely the interest of the whole community.

Planning involves anticipation of the need for change as well as reactions to it. Its objectives are set by
social or political imperatives and must take account of the existing situation. In many places, the
existing situation cannot continue because the land itself is being degraded (Plate 2). Examples of
unwise land use include: the clearance of forest on steeplands or on poor soils for which sustainable
systems of farming have not been developed; overgrazing of pastures; and industrial, agricultural and
urban activities that produce pollution. Degradation of land resources may be attributed to greed,
ignorance, uncertainty or lack of an alternative but, essentially, it is a consequence of using land today
without investing in tomorrow.

Plate 2: A land-use problem: illegal clearance of forest in Sri Lanka

Land-use planning aims to make the best use of limited resources by:

• assessing present and future needs and systematically evaluating the land's ability to supply them;

• identifying and resolving conflicts between competing uses, between the needs of individuals and
those of the community, and between the needs of the present generation and those of future
generations;

• seeking sustainable options and choosing those that best meet identified needs;

• planning to bring about desired changes;

• learning from experience.

There can be no blueprint for change. The whole process of planning is iterative and continuous. At
every stage, as better information is obtained, a plan may have to be changed to take account of it.
Goals

Goals define what is meant by the "best" use of the land. They should be specified at the outset of a
particular planning project. Goals may be grouped under the three headings of efficiency, equity and
acceptability and sustainability.

Efficiency. Land use must be economically viable, so one goal of development planning is to make
efficient and productive use of the land. For any particular land use, certain areas are better suited than
others. Efficiency is achieved by matching different land uses with the areas that will yield the greatest
benefits at the least cost.

Efficiency means different things to different people, however. To the individual land user, it means the
greatest return on capital and labour invested or the greatest benefit from the area available.
Government objectives are more complex: they may include improving the foreign exchange situation
by producing for export or for import substitution.

Equity and acceptability. Land use must also be socially acceptable. Goals include food security,
employment and security of income in rural areas. Land improvements and redistribution of land may
be undertaken to reduce inequality or, alternatively, to attack absolute poverty.

Box 1
The planning process

Land-use planning can be expressed in the following questions:

• What is the present situation?

• Is change desirable? If so:

- What needs to be changed?

Land-use problems and opportunities are identified by discussions with the people involved and by the
study of their needs and the resources of the area.

- How can the changes be made?

Planners seek a range of ways to make use of the opportunities and solve the problems.

- Which is the best option?

Decision-makers choose the best option, based on forecasts of the results of implementing each
alternative.

- How far is the plan succeeding?

Once a land-use plan is put into effect, planners monitor progress made towards its goals and change
the plan if necessary.

One way of doing this is to set a threshold standard of living to which those of target groups should be
raised. Living standards may include levels of income, nutrition, food security and housing. Planning to
achieve these standards then involves the allocation of land for specific uses as well as the allocation of
financial and other resources.

Sustainability. Sustainable land use is that which meets the needs of the present while, at the same
time, conserving resources for future generations. This requires a combination of production and
conservation: the production of the goods needed by people now, combined with the conservation of
the natural resources on which that production depends so as to ensure continued production in the
future.

A community that destroys its land forfeits its future. Land use has to be planned for the community as a
whole because the conservation of soil, water and other land resources is often beyond the means of
individual land users.
Box 2
Acceptability - an example

Following the drought of 1973/74 and the subsequent famine, the Government of Ethiopia became
more aware of the serious degradation of soil in the highlands.

An ambitious soil conservation programme has concentrated on protecting steep slopes by bunding and
afforestation. This has made a substantial impact on soil erosion but has not contributed much to
increased agricultural production. Large-scale afforestation is also unpopular with local people because
it reduces the area available for livestock grazing while forest protection implies denying access for
fuelwood collection. A balance between the competing requirements of conservation and production is
clearly needed if popular support for soil conservation work is to continue without inducements such as
the Food-for-Work Programme.

A land-use plan to conserve steeper slopes by restoring good vegetative cover through closure, followed
by controlled grazing, has been found to be more acceptable to the local people than large-scale
afforestation applied in isolation.

Trade-offs between conflicting goals

Clearly, there are conflicts between these goals. More equity may mean less efficiency. In the short
term, it may not be possible to meet the needs of the present without consuming resources, for
example by burning oil or clearing areas of natural forest. Decision-makers have to consider the trade-
off between different goals but, if the system as a whole is to survive, the use of natural assets must be
compensated by the development of human or physical assets of equal or greater worth.

Good information is essential; that is, information about the needs of the people, about land resources
and about the economic, social and environmental consequences of alternative decisions. The job of the
land-use planner is to ensure that decisions are made on the basis of consensus or, failing that, informed
disagreement.
In many cases, planning can reduce the costs in trade-off, for example by introducing appropriate new
technology. It can also help to resolve conflict by involving the community in the planning process and
by revealing the rationale and information on which decisions are based.

The focus of land-use planning

Planning is for people

People's needs drive the planning process. Local farmers, other land users and the wider community
who depend on the land must accept the need for a change in land use, as they will have to live with its
results.

Land-use planning must be positive. The planning team must find out about people's needs and also the
local knowledge, skills, labour and capital that they can contribute. It must study the problems of
existing land-use practices and seek alternatives while drawing the public's attention to the hazards of
continuing with present practices and to the opportunities for change.

Regulations to prevent people doing what they now do for pressing reasons are bound to fail. Local
acceptability is most readily achieved by local participation in planning. The support of local leaders is
essential while the participation of agencies that have the resources to implement the plan is also
important.

Land is not the same everywhere

Land is, self-evidently, the other focus of land-use planning. Capital, labour, management skills and
technology can be moved to where they are needed. Land cannot be moved, and different areas present
different opportunities and different management problems. Nor are land resources unchanging: this is
obvious in the case of climate and vegetation, but examples such as the depletion of water resources or
the loss of soil by erosion or salinity are reminders that resources can be degraded, in some cases
irreversibly. Good information about land resources is thus essential to land-use planning.

Technology
A third element in planning is knowledge of land-use technologies: agronomy, silviculture, livestock
husbandry and other means by which land is used. The technologies recommended must be those for
which users have the capital, skills and other necessary resources; that is, appropriate technology. New
technologies may have social and environmental implications that should be addressed by the planner.

Integration

A mistake in early attempts at land-use planning was to focus too narrowly on land resources without
enough thought given to how they might be used. Good agricultural land is usually also suitable for
other competing uses. Land-use decisions are not made just on the basis of land suitability but also
according to the demand for products and the extent to which the use of a particular area is critical for a
particular purpose. Planning has to integrate information about the suitability of the land, the demands
for alternative products or uses and the opportunities for satisfying those demands on the available
land, now and in the future.

Therefore, land-use planning is not sectoral. Even where a particular plan is focused on one sector, e.g.
smallholder tea development or irrigation, an integrated approach has to be carried down the line from
strategic planning at the national level to the details of individual projects and programmes at district
and local levels.

Planning at different levels

Land-use planning can be applied at three broad levels: national, district and local. These are not
necessarily sequential but correspond to the levels of government at which decisions about land use are
taken.

Different kinds of decision are taken at each level, where the methods of planning and kinds of plan also
differ. However, at each level there is need for a land-use strategy, policies that indicate planning
priorities, projects that tackle these priorities and operational planning to get the work done.
The greater the interaction between the three levels of planning, the better. The flow of information
should be in both directions (Fig. 1). At each successive level of planning, the degree of detail needed
increases, and so too should the direct participation of the local people.

Box 3
Land-use regulations - a comment

The following observations, made by an FAO field staff member, could apply to almost any developing
country:

• "There are a lot of regulations here - for example, forest conservation, fisheries - that are flouted with
the connivance of the officials who are supposed to enforce them. Regulations have to be publicly
accepted if they are to work. There aren't enough policemen to go around imposing unwanted
regulations in rural areas."

• "Land-use planning is as much a matter of public education as of land-use zoning and regulation."

Figure 1: Two-way links between planning at different levels

National level

At the national level, planning is concerned with national goals and the allocation of resources. In many
cases, national land-use planning does not involve the actual allocation of land for different uses, but
the establishment of priorities for district-level projects. A national land-use plan may cover:

• land-use policy: balancing the competing demands for land among different sectors of the economy
food production, export crops, tourism, wildlife conservation, housing and public amenities, roads,
industry;

• national development plans and budget: project identification and the allocation of resources for
development;
• coordination of sectoral agencies involved in land use;

• legislation on such subjects as land tenure, forest clearance and water rights.

National goals are complex while policy decisions, legislation and fiscal measures affect many people
and wide areas. Decision-makers cannot possibly be specialists in all facets of land use, so the planners'
responsibility is to present the relevant information in terms that the decision-makers can both
comprehend and act on.

District level

District level refers not necessarily to administrative districts but also to land areas that fall between
national and local levels. Development projects are often at this level, where planning first comes to
grips with the diversity of the land and its suitability to meet project goals. When planning is initiated
nationally, national priorities have to be translated into local plans. Conflicts between national and local
interests will have to be resolved. The kinds of issues tackled at this stage include:

• the siting of developments such as new settlements, forest plantations and irrigation schemes;

• the need for improved infrastructure such as water supply, roads and marketing facilities;

• the development of management guidelines for improved kinds of land use on each type of land.

Local level

The local planning unit may be the village, a group of villages or a small water catchment. At this level, it
is easiest to fit the plan to the people, making use of local people's knowledge and contributions. Where
planning is initiated at the district level, the programme of work to implement changes in land use or
management has to be carried out locally. Alternatively, this may be the first level of planning, with its
priorities drawn up by the local people. Local-level planning is about getting things done on particular
areas of land - what shall be done where and when, and who will be responsible.
Box 4
Starting at the local level: bottom-up planning

"Bottom-up" planning is initiated at the local level and involves active participation by the local
community. The experience and local knowledge of the land users and local technical staff are mobilized
to identify development priorities and to draw up and implement plans.

The advantages are:

• local targets, local management and local benefits. People will be more enthusiastic about a plan seen
as their own, and they will be more willing to participate in its implementation and monitoring;

• more popular awareness of land-use problems and opportunities;

• plans can pay close attention to local constraints, whether these are related to natural resources or
socio-economic problems;

• better information is fed upwards for higher levels of planning

The disadvantages are that:

• local interests are not always the same as regional

• or national interests;

• difficulties occur in integrating local plans within a wider framework;

• limited technical knowledge at the local level means technical agencies need to make a big investment
in time and labour in widely scattered places;

• local efforts may collapse because of a lack of higher-level support or even obstruction.
Examples are:

• the layout of drainage, irrigation and soil conservation works;

• the design of infrastructure - road alignment and the siting of crop marketing, fertilizer distribution,
milk collection or veterinary facilities;

• the siting of specific crops on suitable land.

Requests at the local level, e.g. for suitable areas to introduce tobacco or coffee, must be met with firm
recommendations. For instance, "this land is suitable, this is not; these management practices are
needed; it will cost so much and the expected returns are so much".

Planning at these different levels needs information at different scales and levels of generalization.
Much of this information may be found on maps. The most suitable map scale for national planning is
one by which the whole country fits on to one map sheet, which may call for a scale from 1:5 million to
1:1 million or larger. District planning requires details to be mapped at about 1:50000, although some
information may be summarized at smaller scales, down to 1:250000.

For local planning, maps of between 1:20000 and 1:5000 are best. Reproductions of air photographs can
be used as base maps at the local level, since field workers and experience show that local people can
recognize where they are on the photos.

Box 5
Land-use, sectoral and integrated rural development plans

Land-use plans

• Allocate land to different kinds of land use;

• specify management standards and inputs;
• coordinate the work of sectoral agencies related to land use.
Sectoral plans

• These are projects and programmes of sectoral agencies, for example the forestry department and the
irrigation department.

Integrated rural development plans

• Coordinate all aspects of rural development, including health, education, transport and land use.

Land use in relation to sectoral and development planning

Land-use planning is non-sectoral by definition but, unless a special planning authority is set up, a plan
must be implemented by sectoral agencies - in agriculture, forestry, irrigation, etc. Implementation will
call for help from the different extension services.

There can be no clear boundary between land-use planning and other aspects of rural development. For
example, a desirable change in land use may be the introduction of a cash crop. Successful management
may require the use of fertilizer. This cannot be done unless there are local centres for fertilizer
distribution, effective advice on its use and a system of credit for its purchase.

Local services will be of no use without an adequate national distribution system and the sufficient
manufacture or allocation of foreign currency for imports. Building a fertilizer factory and organizing
national distribution are certainly not part of land-use planning but they may be essential for the success
of planned land use. On the other hand, the siting of local distribution centres in relation to population
and suitable land could well be part of the work of a land-use planner.

Therefore, there is a spectrum of activities ranging from those that focus on the interpretation of the
physical qualities of the land, for which the land-use planner will be largely responsible, to those that
need a combined input with other technical specialists. Furthermore, where matters of national policy -
adequate prices for crops, for example - are prerequisites for successful land use, the planner's job is to
say so clearly.
Figure 2: People in planning

People in planning

Land-use planning involves getting many different people to work together towards common goals.
Three groups of people are directly involved (Fig. 2):

Land users. These are the people living in the planning area whose livelihood depends wholly or partly
on the land. They include not only farmers, herders, foresters and others who use the land directly but
also those who depend on these people's products, e.g. operators in crop or meat processing, sawmills
and furniture factories. The involvement of all land users in planning is essential. Ultimately, they have
to put the plan into effect and must therefore believe in its potential benefits as well as in the fairness of
the planning process.

The experience and determination of local people in dealing with their environment are often the most
neglected, as well as the most important, resource. People will grasp development opportunities that
they themselves have helped to plan more readily than any that are imposed on them. Without the
support of local leaders, a plan is not likely to succeed.

Achieving effective public participation in planning is a challenge. Planners have to invest the time and
resources needed to secure participation through local discussions, by broadcasting and newspaper
articles, through technical workshops and extension services. Imagination, a sincere interest in people
and the land as well as a willingness to experiment mark the more successful efforts.

Decision-makers. Decision-makers are those responsible for putting plans into effect. At national and
district levels, they will usually be government ministers; at the local level, they will be members of the
council or other authorities.

The planning team provides information and expert advice. The decision-makers guide the planning
team on key issues and goals while also deciding whether to implement plans and, if so, which of the
options presented should be chosen. Although the leader of the planning team is in charge of day-to-day
planning activities, the decision-maker should be involved at regular intervals.
Decision-makers also have a key role in encouraging public participation through their willingness to
expose their decisions and the way they are reached to public scrutiny.

The planning team. An essential feature of land-use planning is the treatment of land and land use as a
whole. This involves crossing boundaries between disciplines (natural resource, engineering, agricultural
and social sciences), so teamwork is essential. Ideally, a team needs a wide range of special expertise;
for example a soil surveyor, a land evaluation specialist, an agronomist, a forester, a range and livestock
specialist, an engineer, an economist and a sociologist.

Such a range may only be available at the national level. At the local level, a more typical planning team
may consist of a land-use planner and one or two assistants. Each must tackle a wide range of jobs and
will consequently need specialist advice. Government agency staff and universities may be useful
sources of assistance.

Application

These guidelines are written in general terms, applicable to any environment or region. Many problems
of land use are specific to particular areas, not only because of their differing physical environments but
also because of local social conditions such as those of land tenure.

To acquire the feel of land-use planning, it is useful to read these guidelines in conjunction with
examples of planning in practice. Thirteen such examples are assembled in the report, Land-use
planning applications. Proceedings of the FAO Expert Consultation 1990 (FAO, 1991b). Other accounts of
land-use planning, including national handbooks and sources of examples, are listed in Chapter 4.
USTAINABLE DEVELOPMENT

SUSTAINABLE DEVELOPMENT: DEFINITION, BACKGROUND, ISSUES AND OBJECTIVES

DEFINITION
According to the report ‘Our common future’ by Ms. Harlem Brundtland, sustainable development is
defined as development that satisfies the needs of the present without compromising the ability of
future generations to satisfy theirs. This report, published in 1987 by the United Nations World
Commission on Environment and Development, insists on the need to protect the diversity of genes,
species, and all terrestrial and aquatic ecosystems in nature. This is possible in particular via measures to
protect the quality of the environment, and by the restoration, development, and maintenance of
habitats that are essential to species. This implies the sustainable management of the use of the animal
and plant populations being exploited. In other words, it is the rational management of human, natural,
and economic resources that aims to satisfy the essential needs of humanity in the very long term.

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Sustainable development implies the fulfilment of several conditions: preserving the overall balance,
respect for the environment, and preventing the exhaustion of natural resources. Reduced production
of waste and the rationalisation of production and energy consumption must also be implemented.
Sustainable development is presented as a more or less clean break from other modes of development,
which have led and are still leading to worrying social and ecological damage on both a worldwide and a
local scale. In order to be sustainable, development must combine three main elements: fairness,
protection of the environment, and economic efficiency. A sustainable development project must be
based on a better-developed mode of consultation between the community and the members it
comprises. The success of such a policy also depends on consumers accepting certain constraints and
citizens observing certain requirements with regard to transparency and participation.

HISTORY

Faced with the over-exploitation of natural resources that accompanied economic and demographic
growth, the think tank known as the Club of Rome, created in 1968, advocated zero growth. This group
unites scientists, economists, national and international civil servants, and industrialists from 53
countries. It considers the complex problems that face all societies, whether industrialized or
developing. In 1971, this private international association sounded an urgent alarm by publishing ‘The
Limits to Growth’. Broadly speaking, it presents current economic development as being incompatible
with the long-term protection of the planet.
The United Nations Conference on the Human Environment in Stockholm in 1972 gave birth to the first
true notion of sustainable development, which was called ‘eco development’ in those days. This
founding conference was held in an atmosphere of conflict between the ecology and the economy.
Thanks to the support of personalities such as Maurice Strong, Professor René Dubos, Barbara Ward and
Ignacy Sachs, the integration of social equity and ecological caution were incorporated into the
economic development models for North and South. This would result in the creation of the United
Nations Environment Programme (UNEP) and the United Nations Development Programme (UNDP).

As the years have passed, the elements of civil societies, with timid support from governments, have
been waking up to the need to implement worldwide solidarity to deal with the risks of chaos disturbing
nature’s balances. In the 1980s, when the general public became aware of acid rain, the hole in the
ozone layer, and the greenhouse effect, etc., this gradually dawning awareness took another step
forward. Little by little, the media began to make these topics more accessible to the general public.

In 1980, the International Union for the Conservation of Nature (IUCN) published its world conservation
strategy. This document is one of the original sources of the expression ‘sustainable development’,
which is ‘développement durable’ in French and ‘desarollo sustenido’ (or sostenible) in Spanish. The
concept was born of the following observations: the North/South divide (creating the potential for
future conflicts), the search for human development and the ecological risks that give rise to the urgent
need to safeguard the environment.

The term ‘sustainable development’ remained virtually unnoticed until its revival in the Gro Harlem
Brundtland report 'Our common future', published in 1987. As the Prime Minister of Norway and the
chair of the World Commission on Environment and Development (WCED) at the time, she aimed to
clarify this concept of sustainable development as ‘development that fulfils the needs of the present
without compromising the ability of future generations to fulfil theirs’. Since then, the concept of
sustainable development has been accepted all over the world.

THE ISSUES AND AIMS OF SUSTAINABLE DEVELOPMENT

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Following the Rio conference of 1992, most countries undertook to draw up a national strategy for
sustainable development. The implementation of these strategies has turned out to be tricky, because it
must address very serious issues within economic and political contexts that are marked by strong
inertia. The issues appear at every level and affect practically every area of national policy. The various
approaches reflect different points of view, and in particular: more or less constrained free market
practices, a desire to place people at the heart of the economy, the greater or lesser determination of
the various countries in the world, and the balance between short, medium, long, and very long-term
interests. Moreover, there is no denying that the interdependence of modern-day economies means
that environmental problems must be dealt with on a worldwide level, which does not simplify the
implementation of the necessary strategies, particularly because of differences in levels of development.

The aim of sustainable development is to define viable schemes combining the economic, social, and
environmental aspects of human activity. These three areas must therefore be taken into consideration
by communities, companies, and individuals. The ultimate goal of sustainable development is to find a
coherent and long-lasting balance between these three aspects. In addition to these three main factors,
there is a transverse consideration, which is essential to the implementation of policies and actions with
regard to sustainable development: good governance. Governance consists in the procedures of the
decision-making process. In matters of sustainable development, the consensus of all the participants in
society is required in order to define objectives and implement them: private and public sector
companies, associations, NGOs, unions, and citizens.

Sustainable development did not just appear out of thin air; it is the product of a set of transformations
in which the exploitation of natural resources, the choice of type of investment, and orientation of
technological and institutional modifications are in harmony with present and future needs. As has
already been indicated, the aims of sustainable development must be considered by individuals, by
companies, and on a planet-wide level.

Moreover, the concept of sustainable development is based on a set of requirements. It must allow the
basic needs of present and future generations to be fulfilled with regard to demographic constraints,
such as: access to water, education, health, employment, and the fight against hunger or malnutrition.
Another aim of this type of development is to improve quality of life, which involves easier access to
medical care, social services, culture, and therefore also social well-being. In addition, respect for rights
and freedoms and the promotion of new forms of renewable energy such as wind, solar, and
geothermal power, are important aspects of sustainable development. Sustainable development must
allow the planet’s resources and condition to be protected for future generations and natural assets to
be shared. The concept of sustainable development also involves narrowing the gaps between rich and
poor countries, insofar as these gaps, if maintained or accentuated, could be the cause of violent
conflict, which by its very nature leads to regression rather than development.

SUSTAINABLE DEVELOPMENT: INITIATIVES, STANDARDS, CHALLENGES, AND STRATEGIES

INITIATIVES BY PRIVATE AND PUBLIC PLAYERS

GENERAL OVERVIEW

There are many initiatives in favour of sustainable development. However, these initiatives are often
scattered, sometimes not well known (in particular, there is little exchange between the public and
private sectors), and not well promoted. These initiatives, which are rarely part of a long-term plan, are
conducted by a wide variety of players: private and public-sector companies, associations, NGOs,
territorial authorities, educational institutions, healthcare facilities, public bodies, etc.

All these initiatives sometimes constitute a local knowledge base that must be exploited, promoted, and
shared. The various ministries must increasingly provide the driving force and co-ordinate, promote, and
encourage all stakeholders involved in sustainable development initiatives. In view of the size of the
task, sustainable development requires co-ordinated action by all of the economic actors and the public
authorities.

THE PARTICIPANTS
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The Legrand group is solidly committed to sustainable development, and continuously monitors the
implementation of its commitment, maintaining a balance on the economic, environmental, and societal
aspects. For example, Legrand's environmental approach aims to integrate the preservation of the
planet into all areas of the company. This is an important area to be worked on, which is reflected in the
Group’s contribution to improving the energy efficiency of buildings. According to its CEO, Legrand has a
responsibility to ensure the profitable, long-lasting and responsible growth of its activities. To achieve
this, Legrand has been involved for many years in a progress initiative with its customers and partners.
This approach is one way of responding to the environmental, economic and social issues of today and
tomorrow. Proof of this commitment: the 2011-2013 roadmap, which sets out Legrand’s sustainable
development objectives for the coming years. Objectives that are already mobilising all of the Group’s
teams.

The political authorities must work to reconcile a dynamic economy, a high level of education,
protection of health and social and territorial cohesion with protection of the environment, in a world
that respects diversity in all its aspects. The diversity of the objectives of sustainable development
requires many policies and actions to be conducted and co-ordinated by the state and by civil society.
The French national sustainable development strategy most notably incorporates the conclusions and
commitments of the Grenelle Environmental Round Table. Incentives, which are mainly tax-related, for
new modes of production and consumption, to encourage us to re-think our way of life and behaviour in
order to achieve more sustainable growth and consumption, are the main levers of political power.

On a local level, the ‘sustainable city’ plan encourages a re-think of urban planning, housing, energy,
transport, etc. The ecological solidarity pact, on the other hand, is an initiative that aims to build a new
way of 'living together as a community' that would be economical in terms of natural resources. The aim
of this pact is for sustainable development to become a universally shared value, which is socially
accepted and easily accessible while reducing social inequalities.

STANDARDS
REACH REGULATIONS

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Sustainable development is based on the institution of standards. The new European REACH regulations
came into force on 1st June 2007. REACH stands for ‘Registration, Evaluation and Authorisation of
Chemicals’. The main objectives of REACH are: better protection of human health and the environment
against the risks that can be caused by chemicals. It also promotes better knowledge of the chemical
substances used in industry. The aim of this standard is not to use toxic products for the sake of health
and the environment, and to replace them with inoffensive products.

REACH regulations concern all industries and all materials that exist on the European market, whether
produced in the European Union or imported, from one tonne per year. It obliges companies to register
their substances with the European Chemicals Agency; otherwise, they will not be authorised for
placement on the European market. Nevertheless, this registration is not applicable to substances
already covered by other regulations (radioactive substances, medication, phytopharmaceutical
products, biocidal products, food additives, etc.). Other categories, such as polymers, are subject to
special handling.

THE ISO 26000 STANDARD

Published on 1st November 2010, this is an international standard which is by definition for voluntary
application and which gives the main guidelines concerning social responsibility with regard to
sustainable development. This is the first big step towards CSR (Corporate Social Responsibility), and it
proposes a method for its adaptation and implementation in an organization. It provides an
international behavioural framework for any type of organization (companies, communities, NGOs,
unions, etc.) irrespective of size or field of activity.
The ISO 26000 standard observes the major international founding texts, such as the Universal
Declaration of Human Rights, the articles of the International Labour Organisation, etc. It clarifies,
explains, gives additional information, and prevents misunderstandings or arbitrary situations. It was
drawn up by consensus, which means that it cannot favour the interests of a limited group of players; on
the contrary, it favours the greatest possible number of players.
The ISO 26000 standard is thus a common international tool for any player wishing to build ‘responsible’
legitimacy. It invites organisations to express their approach according to seven central questions in
order to define the scope of their responsibility to society: the governance of the organisation, human
rights, working relationships and conditions, the environment, best business practice, questions
concerning consumers and the societal commitment. These central questions aim to identify the
relevant areas of action the organisation will be able to focus on to set its priorities and implement its
own actions.

THE MANAGEMENT OF WEEE AND ROHS

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The management of WEEE and RoHS corresponds to two European directives. D3E (2002/96/EC) deals
with the framework for the management of waste electrical and electronic equipment in Europe. The
RoHS directive (2002/95/EC) (Restriction of Hazardous Substances) concerns the composition of
electrical and electronic equipment (EEE). According to Article R.543-172 of the French Environmental
Code, EEE represents equipment operating on electrical current or electromagnetic fields, as well as
equipment that produces, transfers, or measures such currents and fields. It thus concerns equipment
designed for use at a voltage not exceeding 1000 volts AC and 1500 volts DC.

One of the aims of these directives is to inform users of the rules to apply and the means available to
manage waste electrical and electronic equipment in strict observance of sustainable development.
These directives also identify the needs and problems of users and service providers, and solutions that
exist or need to be created. There are approved bodies, known as environmental organisations, such as
ECO-SYSTEMES, ECOLOGIC, ERP, and RECYLUM. These organisations have been created by and for
producers, in partnership with all participants in the sector. The aims are to handle the economic
management of the WEEE sector, to organise the collection and processing of WEEE, and to implement
awareness, information, and communication actions.
There is a difference between WEEE regulations and RoHS, which has more restricted applicability.
Unlike the WEEE directive, the RoHS directive excludes medical devices (except implants or infected
products), monitoring and control instruments (smoke detectors, etc.), batteries and accumulators.

There are two categories of WEEE: household and professional. As the name implies, household WEEE
comes from home, and can include similar equipment used for professional purposes because of its
nature and the channels through which it is distributed. Professional WEEE is equipment typically used
in company activities, such as vending machines, medical equipment, or measuring instruments. Certain
equipment is similar to household equipment, but remains suited to professional requirements, e.g.,
supermarket chiller cabinets, portable air conditioning units, and professional computer screens.

WEEE includes a wide variety of waste, and their typical composition is too complex to be fully defined.
The waste electrical and electronic equipment collection and processing system has been operational
for household WEEE since 15 November 2006. It has been operational for professional WEEE since 13th
August 2005. It is based on the principle of the extended responsibility of manufacturers of electrical
and electronic equipment. This waste essentially consists of ferrous and non-ferrous metals (10 to 85%),
inert materials excluding cathode ray tubes (0 to 20%), plastics whether or not containing halogenated
flame-retardant materials (1 to 70%), and specific components that are potentially hazardous to health
and the environment (CFCs and other greenhouse gases). Nonetheless, many fractions of WEEE can be
recycled, thereby preserving natural resources and limiting the amount of waste placed in landfill sites
or incinerated.

CHALLENGES

In the field of sustainable development, there are many major challenges to be addressed. They require
us to re-think our economy and our growth in favour of a society that is more economical in its use of
raw materials and energy. Some of these challenges include: climate change, energy consumption,
waste production, threats to public health, poverty, social exclusion, management of natural resources,
loss of biodiversity, and land use. In this context, sustainable development approaches are now essential
obligations.
Sustainable development must mainly be able to respond to the various problems raised by
demographic growth, the planet’s limited capacity, and social inequality. In 2100, the world’s population
will be close to 10 billion, but the Earth does not have unlimited resources, especially since individual
consumption has been increasing considerably because the less developed countries wish to catch up
with the others. Greenhouse gas emissions are one of the main consequences of human activity that
accelerate global warming. This warming carries risks of shortages and the disruption of certain natural
cycles such as fresh water, impoverishment of agricultural soil, deforestation, and reduced biodiversity.
This means that the future development of all species living on earth, ultimately including human
beings, is under threat.

In order to be sustainable, development must also be harmonious. At least a certain amount of social
cohesion must exist on a planetary scale in order to create the conditions for the peace we need. Major
differences between the situations of economic players are sources of tension and conflict. The
North/South economic divide and the unequal distribution of the consumption of the planet’s natural
resources between the world’s populations are notable potential causes of tension. Will the 10 billion
men and women inhabiting our planet in 2100 be able to live as well as the 750 million people in
industrialized nations do today?

STRATEGIES

On a political level, the European Union has determined a strategy to facilitate more sustainable
development. Sustainable development relies on economic, social and environmental foundations in the
framework of co-ordinated worldwide governance. Feedback concerning the various economic, social
and environmental policies already implemented must be obtained. The states and the European Union
must assume their responsibilities as a driving force in the field of sustainable development.

This strategy follows on from the European Sustainable Cities & Towns Conference (Lisbon 1996), and
must be a facilitator of public opinion and policies in order to change consumption and investment
behaviours. This strategy hinges on measures that take the main challenges into account, transverse
measures, appropriate funding, the involvement of all the parties concerned, and the efficient
implementation and monitoring of political decisions. The main directives of the strategy are: the
promotion and protection of basic rights, solidarity within and between generations, the guarantee of
an open and democratic society, the participation of citizens, companies and the social partners, the
coherence and integration of policies, use of the best available knowledge, the precautionary principle,
and the ‘polluter pays’ principle.

As a general rule, any policy involving a strategy in favour of sustainable development must include the
following guidelines, which have international scope and permanent validity:

• Becoming more responsible with regard to the future and future generations: promoting the
precautionary principle, the ‘polluter pays’ principle, and the general principle of responsibility.
• Taking into account the three aspects already mentioned, in a balanced manner, which assumes that
the ‘environmental responsibility’, ‘economic capacity’, and ‘social solidarity’ areas must be handled
equally.
• Incorporating sustainable development in all areas of politics. All activities and all processes in the
city must be concerned.
• Increasing the co-ordination between political areas and improving consistency. Thus, any wide-
ranging political decision must be preceded by an early evaluation of its social, economic and ecological
consequences. This approach requires transparent decision procedures and the involvement of all
participants concerned, as well as the prior determination of conflicts of interest.
• Achieving the sustainable development objectives through partnership. All institutional levels must
work together constructively and fully assume their role as an interface with civil society and the private
sector.

SUSTAINABLE DEVELOPMENT – THE PROBLEM OF ENERGY AND THE IMPACT OF ITS CONSUMPTION

THE ENERGY PROBLEM

GENERAL COMMENTS ON THE ENERGY PROBLEM

Energy is tightly linked to the three dimensions of sustainable development: economic, environmental,
and social. Energy services are obviously essential to economic and social development. To contribute to
this ongoing development, the main issue in the energy sector will be to control the consumption of
natural energy resources. In fact, we must set up a system for better compatibility of current living
standards with the conservation of energy resources for future generations.

There is no denying that energy is the driving force—the very essence—of modern civilization. Energy
services are essential for human well-being, and contribute to strengthening social stability thanks to
the constant increase in the standard of living. Energy is decisive for the development and prosperity of
economic players. Although the energy intensity needs of modern economies are gradually falling,
enormous quantities of energy will be required to improve living conditions in the developing countries.
The energy sector itself occupies an important place in the world economy in terms of employment,
income, and trade.

Résidence eclairée
Every country in the world seems to view the standard of living in the USA at the start of the 21st
century as the ideal objective. The means of achieving this objective comes up against a simple
equation. This equation provides an evocative illustration: the USA (accounting for 5% of the world's
population) consumes 25% of the world's oil production! Most specialists agree that, at current rates of
consumption, oil reserves will run out within 50 years. It is therefore obvious that the development
model of the United States of America, on which the European model is based, cannot be applied on a
worldwide scale. Energy-wasting practices must therefore be replaced by a sustainable development
model.

ENERGY AND POVERTY

Energy and the preservation of resources are currently at the heart of the international debate on
sustainable development. Energy occupies a major role in the alleviation of poverty and the construction
of sustainable development. This is a basic aspect of the physical and natural world and humanity’s
socio-economic systems. Energy therefore constitutes one of the critical areas for interaction between
technology, economics, and politics. It is definitely at the heart of social and environmental matters, as
is its fundamental role in any system for planning or developing a society. As a primary resource, it is
crucial for the implementation of all initiatives to combat poverty, and constitutes the engine of socio-
economic development.

Logo Electricien sans frontière

Access to energy facilitates the enhancement and development of agriculture and other productive
economic areas. Energy constitutes a key factor to improve living conditions and reduce poverty.
Legrand’s task in this area is to allow the greatest possible number of people all over the world to have
access to electricity. This responsibility sees it make two kinds of commitment: firstly, solidarity-based
involvement in supporting development projects and providing emergency aid, particularly through its
partnership with Electriciens Sans Frontières (Electricians Without Borders) since 2007; secondly, the
development of a range of products and solutions tailored to emerging countries. In certain parts of the
world, Legrand provides its trade expertise in order to promote development and participate in
improving the living conditions of the population. Thanks to appropriate products that are easy to install
and which fulfil specific local requirements, the Group works every day at providing access to electrical
equipment. We have a true public-spirited commitment in this area.
If producers have access to energy, local agricultural products can be processed and sold at a reasonable
price in cities, allowing rural households to reap greater benefits from their work. Moreover, if these
households are connected to the public electricity system, they can often benefit from subsidized prices.
The possibility of funding the supply of energy to the remote countryside and the sustainability of this
funding contribute to promoting economic productivity in favour of the poorest segments of the
population.

The case of agriculture illustrates how electrical energy can significantly improve living conditions in the
rural areas of poor countries. Note also that eliminating poverty is one of the central objectives of
modern development policy. Access to energy services is an essential tool to improve the capabilities of
poor and underprivileged populations, thus promoting equality. Some schools of thought even argue
that access to sustainable energy should be set out as a basic human right. If production does not
succeed in fulfilling our growing energy needs, however, the access of poor or rural populations to
electricity and other sources could become even more difficult.

CONTROLLING ENERGY DEMAND

Electrical energy is the number one final energy consumed in France. We are particularly concerned by
sustainable development. The approach to controlling energy demand starts with better use of the
electricity consumed. The goal is not to downgrade user convenience, but to maintain the current level
while saving energy. This goal can be achieved through the use of devices that consume little electricity
and through the possible intelligent management of the equipment already in place. Legrand plays a
leading role in this area. More and more users are changing their behaviour in the right direction. The
energy saved in this way, and therefore not consumed, will not emit any local pollutants or greenhouse
gases!

The control of electricity demand involves a set of technologies and methods that aim to optimise the
energy expenditure of consumers. This must be achieved while limiting public infrastructure costs and
the impact on the environment. This control involves a certain number of actions and choices.
Equipment must have the best possible performance (low-energy lamps, insulation of buildings with
electrical heating systems, economical household and professional appliances, etc.). It is also preferable
to choose devices that can limit the subscribed power demand on the network (power controllers,
programmers, etc.). Finally, we must work towards replacing mains electricity used for thermal
applications (heating, hot water) with electricity obtained from renewable energy sources.

RENEWABLE ENERGY SOURCES

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The proportion renewable energy in our energy consumption must inevitably be greatly increased. The
use of such energy sources is possible locally, and the methods are better and better mastered. Every
citizen can therefore make a contribution to sustainable development by choosing to use renewable
energy sources, whether partially or exclusively.

The question of the development of renewable energy sources is inseparable from the question of
sustainable development. Sustainable energy is abundantly provided by the sun, the wind, the earth’s
heat, waterfalls, tides, and the growth of plants, and it creates little or no waste or polluting emissions.
By using these sustainable sources, we preserve the planet’s fossil resources, such as natural gas and
petroleum, the reserves of which are naturally limited and will inevitably be exhausted.
Thanks to scientific and technical progress, renewable energy sources can already fulfil a large
proportion of the present-day population’s energy needs, outside the transport sector. Future progress
should further reduce our dependence on non-renewable energy sources. Sustainable development will
ensure the perpetuity of the Earth’s resources and save fossil fuels for the coming generations. Better
management of renewable energy sources is a response to the problem of maintaining the overall
balance and the value of our natural heritage. By producing more of our electricity using renewable
energy sources, we will reduce the proportion of electricity produced by traditional or nuclear electric
power plants. We can therefore directly reduce the production of radioactive waste, which future
generations will be obliged to deal with in any case. The very serious accident at Fukushima, Japan on
11th March 2011has just shown us that nuclear power cannot provide the solution to all of our
electricity supply problems.

OTHER ENERGY SOURCES

Energy production using fossil fuels is a polluting process from start to finish. The use of these non-
renewable energy sources is a major source of greenhouse gas emissions. Moreover, we will need to
find a way to cope with the shortage of fossil resources. For the time being, biofuels are not an
acceptable option. They consume a great deal of water, pesticides, and farmable land. They are also a
source of greenhouse gases because of the deforestation they cause, the fact that their farming is highly
mechanized, and the need to transport them. Biofuels give an overall negative result, and cannot
therefore be included in a sustainable development policy.

Nuclear power is produced and controlled in nuclear power plants. It generates much debate, criticism,
concern, and danger. It has the advantage, however, of emitting very little greenhouse gas compared to
fossil fuels. There is, however, a risk of accidents occurring in nuclear power plants (human error,
malicious acts, earthquake, tidal wave, attack, technical fault, etc.).

IMPACT OF ENERGY CONSUMPTION

IMPACT ON CLIMATE CHANGE

As previously indicated, energy in general and electricity in particular are essential factors in the
economic development of human societies.
On the other hand, although energy sources are a decisive factor in economic and social development,
in the current state of knowledge, their exploitation is a source of pollution which undeniably causes a
problem. The steady rise in energy consumption is one of the causes of climate change. If humanity does
not change its ways, specialists predict that temperatures could rise by 1.4 to 5.8°C between 1990 and
2100.

In addition to the increase in average temperature, human activities are likely to have immediately
visible consequences on other aspects of the climate. Rising sea levels, major increases in precipitation
in certain regions, reduced snow cover at the poles, and the frequency and intensity of extreme weather
phenomena would all be signs of impending climate change. In this context, sustainable development is
a must.

ENVIRONMENTAL IMPACT

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Like any human activity, the production and consumption of energy can affect the entire biosphere. It is
clear that certain systems, sectors, and regions will be harder hit than others by these large-scale
phenomena. Certain terrestrial ecosystems (mountain regions, boreal forests, etc.), marine ecosystems
(coral reefs, etc.), and coastal ecosystems (mangroves, etc.) are the most endangered. The following
areas are also concerned: certain dry regions at middle latitudes because of changes in rainfall, low-lying
coastal regions and large deltas in Asia and Africa, small islands, and populations with little ability to
adapt, whose sanitary conditions could deteriorate, etc.

It is therefore important to anticipate the exhaustion of reserves in order to prevent or limit the impact
of this. In terms of sustainable development, energy efficiency is the first lever to reduce the
consumption of natural resources. Technological progress must contribute to improving energy
performance. The Legrand Group works towards this goal every day.
SUSTAINABLE DEVELOPMENT: THE GRENELLE ENVIRONMENTAL ROUND TABLE

INTRODUCTION

Faced with the need to implement sustainable and efficient development, governments, driven by
players in civil society, have begun to implement initiatives in proportion to the issues that our country,
too, is facing. The Grenelle Environmental Round Table of 2007 made it possible to embark on a
consultation process with all parties concerned by environmental problems. States, NGOs, local
authorities, unions, and companies were all involved in this discussion.

A consultation was carried out, and 268 commitments were made by the President of the [French]
Republic. 34 operational committees were subsequently set up to propose concrete actions to
implement these commitments. The outcome of the round table was set out in two laws: the Grenelle 1
law and the Grenelle 2 law. Today, the Grenelle Environmental Round Table has given rise to concrete
achievements all over France and in every business sector.

THE GRENELLE 1 LAW

Salle de réunion
Following the consultation exercise begun in July 2007, and in view of the urgent need to take action
concerning the deteriorating condition of our planet, the state created legislation. The planning law
concerning the implementation of the Grenelle Environmental Round Table, known as the ‘Grenelle 1’
law, was passed on 3rd August 2009. Through its 57 articles, this global law proposes measures affecting
the energy and building sectors, transport, biodiversity and natural environments, governance, and risks
to the environment and health.
The Grenelle 1 law is intended to favour and accelerate the taking into account of new environmental
challenges by all participants. The aim is to guarantee sustainable operation and development for
society and the economy. Another of its aims is the long-term preservation of the standard of living and
purchasing power of the French population. This law faithfully reflects the commitments made at the
Grenelle Round Table. It specifies and supplements some of the approaches based on proposals put
forward by the committees set up following the Grenelle, and gives budget estimates.
The building and energy sectors are in the front line of those concerned by the Grenelle law. This law
has most notably confirmed all the approaches concerning the control of energy, the development of
renewable energy sources, and the fight against climate change. The decision was made to reduce
greenhouse gas emissions by a factor of 4 before 2050. A target of 23% renewable energy sources was
set. The 50 kWhEP/m2/year standard, expressed in primary energy, was confirmed.

THE GRENELLE 2 LAW

The law, which constitutes a ‘national commitment to the environment’, was passed on 12th July 2010.
This law, called Grenelle 2, corresponds to the application of some of the commitments from the
Grenelle Environmental Round Table, which were made in order to promote sustainable development.
The 248 articles that make up this important law were enriched by Parliament, and give a list of
measures for six main areas of work:
• Building and urban planning,
• Transport,
• Energy,
• Biodiversity,
• Risks, health, waste,
• Governance.
Note that, in addition to the Grenelle 1 and Grenelle 2 laws, there is other legislation that incorporates
the commitments of the Grenelle Environmental Round Table. These include laws on environmental
responsibility, on GMOs, and the law concerning the organization and regulation of rail transport.
The field of energy receives prominent attention in the second Grenelle law. In particular, this concerns
improving the energy efficiency of buildings and harmonising urban planning tools. The aim is to design
and create buildings that are more economical in terms of energy consumption. Another aim is to
achieve urban planning that is better linked with policy on habitat, commercial development, and
transport, while improving the quality of life of inhabitants. To achieve the goals that have been set, a
technological breakthrough must be made in the construction of new buildings, and the thermal
renovation of old buildings must be accelerated. A town planning approach that is economical in terms
of real estate and energy resources must also be favoured.
SUSTAINABLE DEVELOPMENT – ELECTRICITY SAVINGS, PRACTICES AND MANAGEMENT

ELECTRICITY SAVINGS

Plante
The fight against climate change and reduction in consumption of non-renewable energy raw materials
are viable. 'Energy savings' refers to all economically profitable actions undertaken to reduce energy
consumption (e.g. optimizing the management of electricity, adapting consumption according to tariff
band, or reducing installed power). The aim is also to consume energy in an optimum way (for example,
by recovering the heat lost in combustion gases, recycling waste to produce energy, etc.).

They say that ‘the best energy is energy not consumed’. One of the means to achieve this is through
energy efficiency. This involves producing the same goods or services with the least energy possible. This
optimisation is at the heart of sustainable development.

The Grenelle Environmental Round Table firmly set energy efficiency policy back in motion, giving a
central role to the control of energy and sustainable modes of production and consumption. As we have
indicated, this concerns every sector: construction, transport, research, industry, etc. Energy savings
should also allow consumers to save money on their electricity bills. They limit greenhouse gas
emissions caused by the production of electricity and reduce the construction of costly additional
infrastructures that would be dedicated to supplying electricity and would disfigure the countryside.

Nowadays, energy efficiency is an undeniable and essential component of each Legrand project. It has
even become a major factor in its success. Legrand is a global specialist in electrical and digital building
infrastructures and proposes ever more solutions to better manage electrical energy, reduce
consumption, and continue to contribute to providing high-quality energy. Above and beyond the offer
itself, the involvement of all participants in their daily practices of prescription and installation is what
will allow these environment-friendly solutions to achieve their full potential. The same applies to the
beneficial reduction in the environmental footprint of buildings.

PRACTICES
At the workplace, energy savings are achieved by applying good behavioural practice. Practices that
favour sustainable development include:
• switching off the light when leaving a room,
• adjusting the air temperature and recycling according to occupancy,
• switching off a computer before an absence of a few hours or more,
• disconnecting the charger when a mobile phone has finished charging,
• switching off devices that remain on stand-by after use (printers, scanners, etc.).

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Thanks to Legrand’s innovative solutions, these good practices can be automated at the workplace. Even
though these small actions would seem to be mere common sense, in practice they are often forgotten
by employees who are not being careful or who are in a rush because they are snowed under by a huge
number of tasks. Thus, in addition to the collective realisation that there is a real need to control energy
consumption, technology can help to ensure the systematic application of these practices. To help users
adopt good practices automatically, Legrand offers a whole range of solutions that contribute to
sustainable development. Green outlets, presence detectors, lighting management systems, etc., are
some of these. These solutions contribute to a significant reduction in energy consumption and increase
energy efficiency, whether in the context of renovation or construction, or the use of a building.

OPTIMISED MANAGEMENT

LIGHTING

For lighting, LED lamps are the best item in terms of low consumption and sustainable development.
Lamps consisting of five or seven LEDs can be used, and these are equivalent to the small halogen spot
lamps used for directional lighting (bookcase, showcase, etc.). These lamps of the future, which are very
economical, ecological, and health-friendly, are becoming increasingly affordable. They can now be
obtained more easily, because they are beginning to be available in supermarkets. They can be used for
any type of lighting, whether for additional or decorative lighting, for home or outdoor use.
Low-energy lamps can thus help to achieve substantial energy savings. They can supply the same
amount of light while consuming five times less electricity than classic incandescent lamps. These lamps,
however, produce weak electromagnetic fields that could be damaging to health and the environment.
Low-energy lamps contain mercury (highly toxic if released, for example from a defective or broken
lamp). These lamps must not be accessible to children.

Allumage par détection

Automation or the control system also leads to highly significant savings of electrical energy by placing
equipment in stand-by mode or switching it off completely, according to the programming. Presence
detectors, complete home automation systems, automatic switches, stand-alone detectors, etc., are all
effective lighting or temperature management solutions. These accessories are used to control and
program lighting, heating, and other types of consumption in order to optimise their use and reduce
costs. They can be controlled via BUS/SCS, CPL, ZigBee, or components of the Mosaic Program.

HOUSEHOLD APPLIANCES

General remarks concerning household appliances

Household appliances (microwave ovens, washing machines, tumble driers, etc.) and convenient and
useful, but they consume a large amount of energy. Their consumption can be as much as 40% of a
family’s electrical consumption (excluding heating, hot water, and cooking), and 60% for households
with a large amount of equipment. Ecology and sustainable development are now gradually becoming a
way of life, and environmental practices are becoming increasingly integrated into everyday life. In view
of the increasing awareness of western consumers, the major brands are offering economical, ecological
machines that are kinder to the environment.

When buying a household appliance, it is important to consider its energy label. This label provides
essential information allowing machines to be compared and selected according to which are the most
efficient and the most economical. For equal performance, certain machines can consume much less
energy than others.
The energy label is the simplest, quickest way to guide the consumer in his choice of household
appliance. Household appliances consume less and less energy, thanks to the tireless efforts of their
manufacturers. Despite this, they still account for a significant proportion of household electricity bills.

Devices in Class A, A+, or A++ are the most highly recommended, according to the type of use. There are
many advantages to choosing such devices. A Class A machine generally has a longer working life. It
consumes up to three times less electricity than a Class C device. The lower consumption of household
appliances lessens the cost of operating these machines, and makes a public-spirited contribution to
preserving the environment.

Freezer

The freezer is one of the major consumers of electricity in a household. Its average consumption can be
as much as 20% of a household electricity bill. It is therefore particularly profitable to apply all necessary
measures to make energy savings in its use.

It is essential to avoid the build-up of frost in a freezer or freezer compartment. To reduce frost
formation, it is important to develop the habit of leaving the door open for the shortest possible time.
Frost is caused by the contact between water vapour in the air and the cold walls of the device. Frost
build-up leads to unnecessarily high energy consumption because of the energy used to maintain the
mass of ice thus formed.

Frost can also be caused by poor sealing of the device caused by gaskets in poor condition or by an
incorrect temperature setting. One solution is an anti-frost mat, which insulates and prevents the
accumulation of ice. Regular defrosting, approximately twice a year or whenever necessary, will limit the
electricity consumption. There are other good practices that can help consumers contribute to
sustainable development:

• Choose the size of your device in accordance with your actual needs. If the device is too large,
consumption is unnecessarily high.
• Place your freezer in a cool location, near an opening. Above all, avoid placing it beside heat sources
such as an oven or cooker. A nearby source of heat would lead to significant overconsumption of
energy.
• Do not adjust your freezer to the coldest setting. A temperature from -15°C to -20°C is sufficient to
freeze food and avoid wasting energy.
• Fill your freezer as much as possible. It will consume less energy if it contains no empty space.
• Whenever you open the freezer door, close it again as soon as possible. Food can be labelled so that
the user can locate it easily in the freezer; this reduces the time during which the freezer door is kept
open.
• Leave a space of at least 5 cm behind the freezer (between the grille and the wall) for air circulation.
Clean the grille behind your refrigerator–freezer regularly.
• Before freezing food, leave it to cool at room temperature before placing it in the freezer. This will
not only save energy, but also reduce the frost formation and bacterial growth.

Washing machine and tumble drier

For ecological and sustainable laundry, avoid using pre-wash cycles. Moreover, it is preferable to run the
machine at 30°C or 40°C. This gives the same result as at 60°C, but with far lower energy consumption.
‘Economy’ mode or a short cycle is recommended. You should also optimise the load placed in the
machine. These small precautions can save up to 25% on electricity and 30% on water for a small load.

The tumble drier is not a machine that favours sustainable development. Of all household appliances, it
is the biggest consumer of energy. Its average consumption can reach 500 kWh, which represents
almost 15% of a family’s annual electricity consumption (excluding heating). Users who cannot do
without a tumble drier are advised to wring out the clothing as much as possible by hand before placing
it in the drier, to start the machine only when it is full, and to clean the filter regularly. Remember that
clothing has a longer life if not dried in a machine. Energy can be saved by hanging the washing to dry on
an indoor rack or outdoor line.

ENVIRONMENTAL FOOTPRINT
DEFINITION ECOLOGY

Ecology is a biological science born in the 1800s, but ‘ecology’ also refers to a very recent concern about
the future and living conditions on the planet. This is not just a fad; ecology is a matter of our planet,
and ultimately affects our lives, life in general, and even the survival of future generations.
The Earth is a complex system that exists only thanks to its equilibrium. But Planet Earth has a fragile
equilibrium. As we exploit the planet’s resources, create pollution through our activities and our way of
life, and accelerate the extinction of certain species, we humans are changing and threatening the
Earth’s fragile equilibrium. Sustainable development is a credible alternative, which we must implement.

ENVIRONMENTAL FOOTPRINT

ECO-DESIGN

Equipe bureaux d'études en action

Eco-design consists of integrating the environment right from the product design phase, for both goods
and services. This integration depends on a global, multi-criteria approach to the environment, and is
based on taking all the stages of the product life cycle into account. This can be developed only thanks
to the involvement of companies, which are playing for many important stakes in terms of economic
gain, improved image, and market differentiation.
For example, within the Legrand Group, the next generation of eco-designed emergency luminaires has
enabled the following improvements: reduction
- a 48% reduction in total product mass, giving rise in particular to a 70% reduction of the impact on the
exhaustion of natural resources, as well as allowing a 74% in total energy consumption, particularly
thanks to the use of new light sources (LED); This excellence is also recognised by the French ‘NF
Environnement’ environmental standard.
The aims of the Legrand group for 2011/2013 are to increase the proportion in the Group offers of eco-
designed products demonstrating reduced environmental impact in a multi-criteria life cycle analysis.
This is a good thing to do, but a commitment to transparency will make it even better. Legrand is
committed to providing transparent and accurate information on the performance and environmental
impact of its products. Product Environmental Profiles (PEPs) specify the environmental characteristics
of each product over its entire life cycle. As a founder member of the PEP Ecopassport association, the
Group is also committed to promoting the use of PEPs throughout the electrical industry.
Building eco-design must address the following points:
• Taking environmental aspects into account in the design,
• Preservation of resources (energy, water, materials, land),
• Protection of ecosystems on a planetary level (climate, ozone), regional level (forests, rivers, etc.),
and local level (waste, air quality, etc.).
• Links between environment and health.

Green building obviously fits in with the principles of sustainable development and eco-design.

CARBON BALANCE

Graphique des émissions carbone du Groupe

The carbon balance is part of an overall approach to controlling greenhouse gas emissions. The carbon
balance was developed by ADEME (the French agency for the environment and energy control), a
government establishment under the aegis of the ministries of research, ecology and energy. It is both a
methodological approach and a set of tools used to keep track of the quantities of greenhouse gas
emissions due to an activity by a public or private company.
It is an evaluation that facilitates the identification of the items responsible for the most emissions, and
therefore to carry out the most relevant actions to reduce the company’s impact on climate change. It
complies with the ISO 14064 standard and the ISO 14000 reference, which apply just as much to the
‘quantification of the greenhouse gas emissions of an organization or project’. Moreover, if carried out
during the design phase, the carbon balance provides a unique reference so that greenhouse gas
emissions can be ranked in order to choose materials with less impact on the environment. It is a tool to
measure the implementation of sustainable development. Green building naturally attributes a great
deal of importance to the carbon balance.
Legrand contributes to the reduction of greenhouse gases through an in-house project known as
"Legrand Climact", which was launched in 2007 and is based around three fields of action: controlling
energy on industrial sites, product eco-design and transportation.
As a result of this initiative, significant reductions are made each year. Accordingly, between 2008 and
2009, Legrand reduced its CO2 emissions from the transport of finished products by 5%.
In 2011, Legrand also began to formalise its carbon footprint according to the international Greenhouse
Gases (GHG) protocol. This approach revealed that the most significant greenhouse gas emissions were
related to raw materials, logistics, and the energy consumption of the Group’s manufacturing sites.

SUSTAINABLE DEVELOPMENT – THE RESPONSIBILITIES

THE RESPONSIBILITY OF COMPANIES

THE SOCIAL CONTRACT

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Sustainable development covers three dimensions: economic, social, and environmental. Social
responsibility is the contribution made by organisations to sustainable development. It is reflected in the
company’s will to take responsibility for the impact of its decisions and activities on society and on the
environment, and to answer for this impact. On 1st November 2010, the first international standard
concerning social responsibility, ISO 26000, was published. Its aim is to give guidelines to organisations,
taking into account the existing references for general operation, management systems, and reporting.
Social responsibility concerns the principles of sustainable development applied to the sphere of an
organization and its stakeholders.

The organisation may be a large company, and SME, an administration, an association, or an NGO. Its
stakeholders are all individuals or groups with an interest in its decisions or activities: personnel, unions,
occupational physicians, shareholders, customers, subcontractors, suppliers, technological or financial
partners, as well as representatives of the State, local authorities, neighbours, associations, media, etc.
The scope is vast, and it must be delineated with a careful assessment of priorities. Embarking on a
social responsibility initiative means first identifying the stakeholders, initiating a dialogue with them to
find out about their expectations, and evaluating the impact of the organisation on these expectations.
The NF ISO 26000 standard facilitates this procedure. It offers a common, universal, international
framework and guidelines to structure the approach and to integrate it into the management system. It
allows the organisation and its stakeholders to reveal their expectations concerning the main themes of
sustainable development. This standard is like a methodological guide that contains seven central
questions on which it invites the user to reflect and act. For companies, the CSR approach consists of
taking the social and environmental impact of their activity into consideration in order to adopt the best
possible practices, thereby contributing to improving society and protecting the environment. The CSR
approach combines economic logic with social responsibility and environmental responsibility.
A company can evaluate its level of social responsibility thanks to ISO 26000. The interest lies on several
levels: company, investors or shareholders, and employees. On a company level, social responsibility is a
recognized factor in growth and durability for two reasons. The first reason is the increasingly strong
pressure from contractors and consumers in this area: ‘responsible buyers’ are selecting ‘responsible
suppliers’. The second reason is that, with social responsibility, the company has a strategic and
effective tool to limit the exposure to risk (environmental, social, disputes with stakeholders, etc.).
Where investors and shareholders are concerned, the growth in the responsible investment market is
real, and the social and environmental performance of the companies is taken into account. Employees
appreciate working in a responsible company; it is definitely a motivating factor.

THE ETHICS CHARTER

This is an initiative implemented by professionals to be used as a reference system to give meaning to

their actions, help to choose between several solutions, and guide their behaviour. The principles of
action and actions constitute a federating element when considering the future. This ethical approach
fits in with the more general framework of sustainable development.
This ethics charter must represent values of responsibility, commitment and conviction held by the
company and its partners with regard to green building. Professionals undertake to observe and
distribute the ‘good practice guides’. They raise their professional responsibilities to the level of
sustainable development requirements.

Visuel document la charte des fondamentaux Legrand

For Legrand, compliance with the Group's ethical commitments, formally set out in the charter of
fundamental principles, is a priority. In 2009, the Group's ethics representatives - over sixty in number -
attended a training session webcast by the Company Secretariat, the Human Resources Department and
the Group Internal Communication Department. The aims of this session were as follows:
- Providing information on the 2009 update of the Charter of Fundamental Principles and the creation of
a practical guide. In particular, the updating of the charter made it possible to develop the Legrand
Group's position on Human Rights and the fight against discrimination, complying with the key
international texts, as well as on issues relating to the protection of property and on confidentiality. It
also provided an opportunity to add to the themes of the prevention policy and environmental policy. A
supplement on the subject of competition was published this year.
- To formalize the strengthening of the group alert system, with the creation of a generic email address
used to directly receive information on any difficulties and questions Legrand Group employees might
have. This system complements the local role of the ethics representatives.
- To facilitate the sharing of experience within the Legrand Group. In addition to the Group training
session, both local and more specific, activity-based training courses are organised on a regular basis.
Another area of action for Legrand is the fight against corruption. In June 2011, a webcast training
session was organised to make Ethics representatives aware of a corruption prevention initiative. New
training materials on this topic have been created, supplementing the Group Charter of Fundamental
Principles.
Finally, Legrand wants its suppliers to make a commitment in terms of social and environmental
responsibility. Our suppliers are therefore encouraged to comply with the principles of the Global
Compact to which the Group signed up in 2006. To date, 62% of the Group's total purchases are from
strategic suppliers who share the principles of the Global Compact. Furthermore, since 2007, the
"purchasing" specifications include Legrand's requirements in terms of the environment, health and
safety at work, respect of human rights and compliance with labour law. Compliance with this
purchasing policy is now one of the criteria for the selection and monitoring of the performance of
suppliers. In its objectives for 2011 to 2013, Legrand will extend the evaluation of suppliers to include
sustainable development criteria and continue to train Group purchasing personnel in the field of
responsible purchasing.
In order to facilitate the implementation of the approach in terms of purchasing, our head buyers and
quality specialists participated in a session to increase awareness of the Sustainable Development
approach with suppliers and to present the related tools and processes. Since 2011, a sustainable
development module has been incorporated in all training sessions for newly hired purchasing
personnel.
In 2009, the Legrand Group Purchasing Department participated in drawing up the national charter "10
commitments for responsible purchasing". This charter provides a framework for dealings between
major instructing parties and SMEs / VSBs. In France, Legrand has signed up to the 10 Responsible
Commitments Charter.

THE RESPONSIBILITY OF MANUFACTURERS

PRESENTATION

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The environmental responsibility of manufacturers is to continue to develop innovative solutions that
favour sustainable development. The Group holds the ongoing quest for more energy-efficient buildings
as one of its primary concerns. From this standpoint of respect for the environment and sustainable
development, the Legrand Group has defined priority actions to be carried out in its activities. These
priorities constitute the charter of its intangible commitment:

• Incorporating the environmental approach on all Group sites by implementing environmental

management on ISO 14001-certified manufacturing sites, continually improving performance, and
reducing the environmental impact of sites.
• Taking the environmental aspect into account right from the design phase of products, systems, and
solutions, by incorporating the eco-design concept, for all design and development projects, in order to
reduce and quantify the environmental impact of products over their entire life cycle.
• Fully informing customers to help them choose the best solutions, through clear and transparent
information on the environmental impact of products, systems and solutions.
• Offering customers solutions to improve the energy efficiency of buildings via energy-saving
products for residential, commercial, or industrial premises.

These environmental commitments are integrated into the daily activities of the company. They involve
the responsibility of all participants in the company, in accordance with the sustainable development
approach. This commitment to sustainable development promotes awareness and obtains the support
of all industrial partners.
PROMOTING ENERGY EFFICIENCY

Energy efficiency is a fundamental factor in Legrand projects, and one of the main criteria in its value.
More and more products are being proposed to optimise the management of electrical energy, supply
high-quality energy, reduce consumption, and contribute to sustainable development. Offers of practical
solutions, such as the electric vehicle charging station, the lighting management system, and green
outlets, allow consumers to make significant energy savings while taking concrete action to help
preserve natural and energy resources.

Responsible and clearly indicated information accompanies every energy efficiency offer. The true
benefits provided by these sustainable development solutions also include financial savings, the
amortization period, and the CO2 mass equivalent saved. Thanks to clear and sincere communication,
customers have the essential information they require to make a choice and then to install the solutions
to be implemented.

These solution offers are supported by the strong involvement of every player in the Legrand Group, in
order to endow these products with their full economic, social, and environmental value. The reduction
of the environmental footprint of buildings thus contributes to the preservation of non-renewable
resources and the reduction of greenhouse gas emissions. For the Legrand Group, promoting energy
efficiency is not only a challenge: it is what we are here for.

HIGH ENVIRONMENTAL PERFORMANCE PRODUCTS

Armoire Legrand
Product manufacture is an important stage in contributing to environmental performance. The design
and development of high environmental performance products must be based on a certain number of
action foundations, from materials management to eco-design. These environment-friendly products
thus constitute energy-saving solutions and therefore contribute to sustainable development.

The main actions are carried out on:

• The substances covered in the RoHS Directive: Legrand has eliminated all of these substances, even
in equipment not within the scope of this directive.
• Traceability of substances: The IEC 62474 standard is used to declare substances. This declaration
and REACH regulations in Europe are important elements for the Legrand Group, and are taken into
account so that customers can be fully informed, all over the world.
• Recyclability must be at least 60%: this is the percentage of material able to be recycled through the
application of the current state of the art in this field. To take this parameter into account while
facilitating manufacture, the VDI enclosure was redesigned with 20% less material and different
components from the previous range. Its recyclability was thus increased to 99%.
• ISO14001 certified manufacturing site: this certification results in reduced energy consumption,
reduced waste, the control of risks, and awareness of the personnel.
• Management of the environment associated with R&D: this incorporates environment management
in all phases of the development process. Innovation and creativity are therefore the fruits of this
ongoing striving for environmental improvement.
• Product Environmental Profile (PEP): this is the provision of all the transparent and precise data
concerning the environmental impact of products. This approach involves compliance with the ISO14025
standard, which specifies the environmental characteristics of each product over its entire life cycle.
• Eco-design, for new versions of products: according to the description of the ISO14040 standard, this
means producing products with a minor environmental impact over their entire life cycle. For example,
the eco-design of the new generation of emergency lighting units provided very significant progress. The
total mass of the product was reduced by 48%, giving a 70% reduction in the impact on over-
consumption of natural resources. These products allow the total energy consumption to be reduced by
74%, most notably thanks to the use of new lighting sources with LED technology. This emergency
lighting unit naturally holds the NF environmental certification.

ECO-LABEL

Logo Développement durable Legrand

The eco-label is a simple, innovative tool developed by Legrand. It answers three of the main questions
asked by most site owners: How much money do we save? How much CO2 do we save? What is the
return on investment? This product allows customers to quickly and easily identify the savings made, in
terms of both cost and energy.
This label is physically present on each product and sustainable development solution, and lists the
actual savings and the return on investment time. It is a decision-making aid for all participants
interested in improving the energy efficiency of buildings. For example, when installing three energy
meters and a measuring unit combined with corrective actions, the following information is shown on
the eco-label: Potential savings for 300 m2 office space; annual savings €799; maximum amortization
time 16 months; savings per year 1000 kg CO2 equivalent of all pollutant gases (CO2, methane, carbon
monoxide, fluorinated gases, etc.).

As this article has shown, sustainable development is no longer just a possible alternative: it is the path
of reason. Several means of action already exist. Decisions involving their implementation concern all
the economic participants. Each person on his own level can be a participant in this gigantic project,
which will affect the lives of future generations. Through its public-spirited innovation policy, the
Legrand Group provides equipment that combines highly desirable savings with the protection of
natural resources, which are all the more precious because they are becoming so rare. Let’s make the
most of it!
NTRODUCTION

The need to formulate a new economic and social development vision for Tanzania emanated from the
outcomes of economic reforms - especially those which were pursued since 1986. These social and
economic reform measures were taken in response to the economic crisis that had persisted in the
country and the world as a whole since the early years of 1980s. Secondly, the government had realised
that those earlier development policies and strategies were not in consonance with the principles of a
market led economy and technological development occurring in the world. The government therefore
started preparing three year reform programmes with strategies, generally, focusing on only a few
economic and social areas, and the areas of focus changing frequently. These structural adjustment
programmes, have been followed for a long time, about fifteen years. Over this long period, the whole
philosophy of working for the country's development and that of its people started losing direction and
as a result the country lost its vision which had originally been based on long-term development
objectives. The government and the society in general realised that the nation lacked direction and a
philosophy for long-term development. The new Development Vision 2025 feels this vacuum.
The Government started the formulation exercise of this development Vision in 1995. A Team of
Experts, appointed from various sectors in the society, was the focal point of this exercise under the
auspices of the Planning Commission. Observing the need to build a national consensus over the Vision's
objectives, people's participation was advocated right from the early stages of the exercise. People's
participation was effected through various methods including conducting symposia, interviews and
dialogue with various people, and meetings which brought together people from various social settings
in society. The mass media was also closely involved through publishing special articles and features in
newspapers, debates and discussions in radio and television programmes.

The basic issues in the development Vision are elaborated in six areas. First is an elaboration of the
concept and scope of national development vision. This part describes attributes our country is expected
to have attained by the year 2025. These include people having attained a high quality of life; peace,
tranquillity and national unity; good governance; an educated society imbued with an ambition to
develop; and an economy which is competitive with sustained growth for the benefit of all people.

Secondly, is a brief analysis of approaches of previous national development visions pursued since
independence. This analysis spells out the observed successes and problems encountered which
justified the need to formulate the new Development Vision.

The three principal objectives of the Vision 2025 - which are; achieving quality and good life for all; good
governance and the rule of law; and building a strong and resilient economy that can effectively
withstand global competition - have been described in detail in section three. These objectives not only
deal with economic issues, but also include social issues such as education, health, the environment and
increasing involvement of the people in working for their own development. The thrust of these
objectives is to attain a sustainable development of the people

The fourth section deals with important issues which must be borne in mind during the implementation
of the vision's objectives. It outlines the basic pillars with which the society at large will be guided in
order to ensure a successful implementation of the Vision. These implementation driving forces or
pillars, include among others, the need for Tanzania society as a whole treasure a competitive
development mindset as well as nurturing a self-reliance culture.
The fifth section offers basic guidelines on the implementation of the Vision which include noting the
importance of undertaking reviews and reforms of existing laws and structures of various institutions in
order to ensure that they meet the requirements of implementing the objectives of this Vision. The
participation of the people in preparing and implementing plans for their own development is also
emphasized, including putting in place an appropriate framework for coordinating and evaluating the
implementation of the Vision. It is stressed that only through this participatory process that the Vision
will be able to promote people's development and its management by people themselves. These are
basic issues in making the people accept the responsibility to ensure the realization of their own
development aspirations.

Lastly, I believe that if we shall internalize in our minds all the important issues outlined in this Vision,
our nation will have made a very big stride in, promoting the desire for economic development and
people's welfare. I would like to take this opportunity to thank the Team of Experts and other people
who have participated in the preparation of this Vision. I also wish to thank development partners from
outside the country for their financial and technical support towards a successful accoplishment of this
exercise. I recognise especially the United Nations Development Programme (UNDP), the Government of
Japan, the European Union and Government of the Republic of Ireland.

It is my hope that these and the other partners will continue to work with us during the implementation
stage; particularly by giving us moral and material support in implementing the priority areas nationally
identified to lead us towards the attainment of the objectives of this Vision 2025.

NASSORO WAMCHILOWA MALOCHO (MP)

Minister of State and Vice Chairman
Planning Commission

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1.0 DEVELOPMENT VISION

1.1 The Concept

By the mid-1980s, the government had realised that the past development policies and strategies were
not adequately responding to changing market and technological conditions in the regional and world
economy and were also not adapting to changes in the domestic socio-economic conditions.

In response, beginning mid-1986, the Government adopted socio-economic reforms which continue to
be implemented to date. However, it has increasingly become apparent to the Government and its
people that these socio-economic reforms are not adequately informed by a national long-term
development philosophy and direction.

It was out of the realization that these reforms had to be underpinned by a long-term development
philosophy, if they were to be owned and sustained by the people, that the idea of formulating a
national vision emerged. Moreover, the Government recognised the importance of re-kindling the
hopes and expectations of the people as well as their patriotism and nationalistic aspirations thus
reinforcing the need for a national vision.

A vision for development is an articulation of a desirable future condition or situation which a nation
envisages to attain and the plausible course of action to be taken for its achievement. A national vision
therefore seeks to actively mobilize the people and other resources towards the achievement of shared
goals. A shared vision arouses people's aspirations and creates the spark that lifts the nation out of the
mundane. In the process, it instils the courage and determination to rise to challenges at the individual,
community and national levels. A vision is a vehicle of hope and an inspiration for motivating the people
to search and work harder for the betterment of their livelihood and for posterity.

1.2 The Tanzania Vision 2025

A Tanzanian who is born today will be fully grown up, will have joined the working population and will
probably be a young parent by the year 2025. Similarly, a Tanzanian who has just joined the labour force
will be preparing to retire by the year 2025. What kind of society will have been created by such
Tanzanians in the year 2025? What is envisioned is that the society these Tanzanians will be living in by
then will be a substantially developed one with a high quality livelihood. Abject poverty will be a thing of
the past. In other words, it is envisioned that Tanzanians will have graduated from a least developed
country to a middle income country by the year 2025 with a high level of human development. The
economy will have been transformed from a low productivity agricultural economy to a semi-
industrialized one led by modernized and highly productive agricultural activities which are effectively
integrated and buttressed by supportive industrial and service activities in the rural and urban areas. A
solid foundation for a competitive and dynamic economy with high productivity will have been laid.
Consistent with this vision, Tanzania of 2025 should be a nation imbued with five main attributes;

High quality livelihood.

Peace, stability and unity.

Good governance,

A well educated and learning society; and

A competitive economy capable of producing sustainable growth and shared benefits.

1.2.1 High Quality Livelihood

Ideally, a nation's development should be people-centred, based on sustainable and shared growth and
be free from abject poverty. For Tanzania, this development means that the creation of wealth and its
distribution in society must be equitable and free from inequalities and all forms of social and political
relations which inhibit empowerment and effective democratic and popular participation of social
groups (men and women, boys and girls, the young and old and the able-bodied and disabled persons)
in society. In particular, by the year 2025, racial and gender imbalances will have been redressed such
that economic activities will not be identifiable by gender or race. All social relations and processes
which manifest and breed inequality, in all aspects of the society (i.e., law, politics, employment,
education, culture), will have been reformed.

1.2.2 Peace, Stability and Unity

A nation should enjoy peace, political stability, national unity and social cohesion in an environment of
democracy and political and social tolerance. Although Tanzania has enjoyed national unity, peace and
stability for a long time, these attributes must continue to be cultivated, nurtured and sustained as
important pillars for the realization of the Vision.

1.2.3 Good Governance

Tanzania cherishes good governance and the rule of law in the process of creating wealth and sharing
benefits in society and seeks to ensure that its people are empowered with the capacity to make their
leaders and public servants accountable. By 2025, good governance should have permeated the national
socio-economic structure thereby ensuring a culture of accountability, rewarding good performance and
effectively curbing corruption and other vices in society.

1.2.4 A Well Educated and Learning Society

Tanzania envisages to be a nation whose people are ingrained with a developmental mindset and
competitive spirit. These attributes are driven by education and knowledge and are critical in enabling
the nation to effectively utilize knowledge in mobilizing domestic resources for assuring the provision of
people's basic needs and for attaining competitiveness in the regional and global economy. Tanzania
would brace itself to attain creativity, innovativeness and a high level of quality education in order to
respond to development challenges and effectively compete regionally and internationally, cognisant of
the reality that competitive leadership in the 21st century will hinge on the level and quality of
education and knowledge. To this effect, Tanzania should:

Attain self reliance driven by the psychological liberation of the mindset and the people's sense of
confidence in order to enable the effective determination and ownership of the development agenda
with the primary objective of satisfying the basic needs of all the people - men, women and children.

Be a nation whose people have a positive mindset and a culture which cherishes human development
through hard work, professionalism, entrepreneurship, creativity, innovativeness and ingenuity and who
have confidence in and high respect for all people irrespective of gender. The people must cultivate a
community spirit; one which, however, is appropriately balanced with respect for individual initiative
Be a nation with high quality of education at all levels; a nation which produces the quantity and quality
of educated people sufficiently equipped with the requisite knowledge to solve the society's problems,
meet the challenges of development and attain competitiveness at regional and global levels.

1.2.5 A strong and Competitive economy

Tanzania should have created a strong, diversified, resilient and competitive economy which can
effectively cope with the challenges of development and which can also easily and confidently adapt to
the changing market and technological conditions in the regional and global economy

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2.0 TANZANIA PAST VISIONS AND IMPEDIMENTS

2.1 Tanzania's Past Visions

Tanzania has gone through two national visions: first, the Vision to achieve independence. Every
Tanzanian understood and accepted that goal, which was a basic human right. However, having attained
independence, it was realized that not everybody understood his or her consequent obligation; namely,
that enjoying the fruits of independence implied hard work. Hence the post-independence catchword
"Uhuru na Kazi".That catchword was intended to exalt the importance of hard work in realizing the
development which was championed in the struggle for independence.

The second national Vision was the Arusha Declaration. It articulated a philosophy of socio-economic
liberation based on socialism and self-reliance as the long-term national goal of Tanzanians. The
Declaration was accepted by the majority of Tanzanians and galvanized them behind its realization. Thus
since February 1967, the development vision of Tanzania as well as the policies for social and economic
transformation have been guided by the principles and programmes enshrined in the Arusha
Declaration.
It is notable, however, that the strategy of the Arusha Declaration did not sufficiently address the
complexity and dynamic character of policies and incentive structures which were necessary to
effectively drive the development process. The strategy was based overly on state-control of the major
means of production, exchange and distribution and on the prospect of a growing and viable public
sector (through public investment), as the principal engine of economic growth and development.

Notwithstanding these strategy shortcomings, the Arusha Declaration credibly sought to realize a set of
fundamental moral, spiritual, ethical and civil values which stand the test of time. Thus Tanzania today
prides itself of and enjoys national unity, social cohesion, peace and stability largely as a result of the
Declaration's core social values. These values have to be acknowledged and should form part of the
underlying underpinnings of the Vision 2025.

2.2 Impediments

The central thrust of the first two visions was the commitment to achieve substantial progress in
attaining higher standards of living as reflected in the various development plans. In particular, Tanzania
vowed to eradicate poverty, ignorance and disease. And although reasonable progress has been
achieved in the fields of education and health, there is concern that the momentum and the level of
progress made in these areas has not been equal to expectations. In fact, during the 1980s, the signs of
reversal in some of the achievements became evident. In this context, the underlying factors and forces
which have persistently impeded the realization of the goals of the development plans and programmes
need to be identified in order to engineer a break from the past and deploy more appropriate driving
forces to assure socio-economic progress for the future. Four main impediments have been identified:

A donor dependency syndrome and a dependent and defeatist developmental mindset.

A weak and low capacity for economic management.

Failures in good governance and in the organization of production and

Ineffective implementation syndrome.

2.2.1 Donor-Dependence Syndrome and a Dependent and Defeatist Developmental Mindset

The mindset of the people of Tanzania and their leader has succumbed to donor dependency and has
resulted in an erosion of initiative and lack of ownership of the development agenda. This condition has
not been conducive to addressing the development challenges with dignity, confidence, determination
and persistence through hard work and creativity. The educational system has not been structured to
counter this deterioration in the ownership of the development agenda and in fostering self-confidence
in the determination of the nation's destiny.

The following characteristics have become evident:

External dependence and the erosion of confidence, dignity and determination have demobilized the
ability to effectively utilize human, physical and mental capacities to take initiative and to earnestly
search for creative options to solve developmental problems. As a result, considerable potential;
capabilities in Tanzania have not been effectively marshaled and deployed for development.

The mindset of the leaders and people of Tanzania has neither been supportive of hard work, ingenuity
and creativity, nor has it provided a conducive environmental for these attributes to emerge. Thus,
there is a high degree of apathy and lack of accountability and self-motivation. Initiative, ingenuity,
creativity and innovativeness in society are at a low ebb. Consequently, a culture of admiring "effortless"
success has erupted and, with it, productive individual initiative and the spirit of the community
development have not taken a positive shape.

The level and quality of education that has been attained has not been adequate to meet the growing
development challenges and to enable the search for solutions to the development problems that
confront the nation. In particular, education has not adequately and appropriately been geared to
integrate the individual into the community. Equally, it also has not been able to innovatively engage
Tanzanians in entrepreneurship and self-employment.

2.2.2 A Weak Economy and Low Capacity for Economic Management

The capacity for economic management has not been in concert with the demands for macro-economic
stability and has not responded to changing conditions as quickly as it should. Generally, there has been
some degree of macroeconomic instability. Policy response to changing conditions has been slow.
Assuming that all other factors were constant, this situation would impute a lack of policy-making
capacity to anticipate and effectively respond to changing conditions. As a result, an environment which
has not been conducive to the sustenance of economic stability necessary for an appreciable and
continuous flow of investments has been created. Further aggravating this situation has been the
excessive use of administrative controls extending to non-strategic spheres and even precluding the
mobilization of capabilities outside the government. The excessive use of administrative controls and
regulations have negated the possibility of harnessing market forces to achieve development objectives
with the result that the economy has become weak.

The general picture of the Tanzania economy reflects the following:

The economy has remained largely untransformed. Agriculture, the backbone of the economy,
continues to be dependent mainly or rainfall and on backward technology. Thus agricultural productivity
is low and erratic.

Productivity level in other sectors has equally remained low. The available domestic resources have not
been adequately mobilized and effectively utilized to promote development on a robust and sustainable
basis. This low level of productivity also reflects a low degree of creativity and innovativeness including
the low level of utilization of science and technology.

The structure of the economy has continued to be dominated by primary production, thus making the
economy seriously vulnerable of frequent changes in international commodity market conditions and
newer technologies which significantly use less raw materials.

Development has generally been characterized by a low level of mobilization of domestic natural,
human and financial resources to produce wealth and to raise the standards of living of the people.

2.2.3 Failures in Governance and Organization for development

Over time, and particularly in recent years, there are indications that there is a risk of cracks in social
cohesion and national unity taking shape. Corruption and other vices in society have been on the
increase. This situation raises great concern. The rule of law and the voices of the people in the
development process have tended to be weak. The national institutional and organizational structures
have not been reviewed to cope with the demands of the on-going reforms. As a result, these structures
have not been supportive of evolving social relations which promote the participation of all partners in
development and have equally failed to effectively mobilize domestic resources and capabilities to meet
the emerging challenges of market-oriented and private sector-led development.

2.2.4 Ineffective Implementation Syndrome

Tanzanians have developed a propensity to prepare and pronounce plans and programmes, and
ambitions which are not accompanied by effective implementation, monitoring and evaluation
mechanisms. As a result, implementation has been weak. This situation has given rise to the erosion of
trust and confidence among the people on their leaders. It is evident that the people are now less
enthusiastic about participating in national endeavors. Apathy has set in.

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3.0 THE TARGETS OF THE VISION 2025

The Tanzania Vision 2025 aims at achieving a high quality livelihood for its people. attain good
governance through the rule of law and develop a strong and competitive economy. It is envisioned that
the following specific achievements would be attainable by the year 2025:

3.1 High quality Livelihood

A high quality livelihood for all Tanzanians is expected to be attained through strategies which ensure
the realisation of the following goals:

Food self-sufficiency and food security.

Universal primary education, the eradication of illiteracy and the attainment of a level of tertiary
education and training that is commensurate with a critical mass of high quality human resources
required to effectively respond and master the development challenges at all levels.

Gender equality and the empowerment of women in all socio-economic and political relations and
cultures.

Access to quality primary health care for all.

Access to quality reproductive health services for all individuals of appropriate ages.

Reduction in infant and maternal mortality rates by three-quarters of current levels.

Universal access to safe water.

Life expectancy comparable to the level attained by typical middle income countries.

Absence of abject poverty

3.2 Good Governance and the Rue of Law

It is desired that the Tanzanian society should be characterized by:

Desirable moral and cultural uprightness.

Strong adherence to and respect for the rule of law

Absence of corruption and other vices.

A learning society which is confident, learns from its own development

experience and that of others and owns and determines its own development agenda.
3.3 A Strong and Competitive Economy

The economy is expected to have the following characteristics:

A diversified and semi-industrialized economy with a substantial industrial sector comparable to typical
middle-income countries.

Macroeconomic stability manifested by a low inflation economy and basic macroeconomic balances.

A growth rate of 8% per annum or more.

An adequate level of physical infrastructure needed to cope with the requirements of the Vision in all
sectors.

An active and competitive player in the regional and world markets, with the capacity to articulate and
promote national interests and to adjust quickly to regional and global market shifts.

It is also envisaged that fast growth will be pursued while effectively reversing current adverse trends in
the loss and degradation of environmental resources (such as forests, fisheries, fresh water, climate,
soils, biodiversity) and in the accumulation of hazardous substances.

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4.0 DRIVING FORCES FOR THE REALIZATION OF THE VISION

The Vision 2025 can be realized if Tanzanians capitalize on their strengths and engage the appropriate
driving forces for development and effectively avoid the impediments which have held back their
development. The major strengths which Tanzanians must capitalize on are national unity, social
cohesion, peace and stability. However, these assets, born out of the Arusha Declaration, should not be
taken for granted. They have been cultivated over a long period of time and are the pillars upon which
the hopes and expectations of the majority of Tanzanians rest. Indeed, there are indications that, in
recent years, the momentum derived from these hopes and expectations has been on the decline. The
present challenge is to ensure that deliberate efforts are made to rekindle the hope, confidence, faith
and commitment among the men, women and the entire citizenry if the goals of the Vision are going to
be realised, taking into account the changing conditions.

It is evident that both the global and the Tanzanian economy have changed fundamentally since the
adoption of the Arusha Declaration. Tanzanians will therefore have to adapt to these new changes and
realities. Specifically, it is important to recognise the following new characteristics of the national and
global economy:

The on-set of political and economic pluralism.

Exposure of the limitations of policies of public sector-led development and administrative control of
the economy in a centrally planned fashion.

The recognition of individual initiative and the private sector as the central driving forces for building a
strong, productive and renewing economy

State welfare responsibilities are more focused on cost-effective ways of enhancing access to and the
quality of social services.

The fast changing market conditions and technological developments

The determinants of international economic relations are being influenced by post-cold war geopolitical
factors.

Nation-state economic behavior is being transformed by globalization and regionalism, trends which
undermine inward looking economic nationalism.

These characteristics pose new challenges which demand the adoption of new driving forces capable to
graduate Tanzania from a least developed country to a middle income country with a high level of
human development characterized in improvements in the quality of livelihood of the people. In this
context, the following three key driving forces need to be promoted and utilized:
A developmental mindset imbued with confidence, commitment and empowering cultural values.

Competence and a spirit of competitiveness; and

Good governance and the rule of law.

4.1 Developmental Mindset and Empowering Culture

High priority must be given to education and continuous learning Equally, the effective transformation
of the mindset and culture to promote attitudes of self development, community development,
confidence and commitment to face development challenges and exploit every opportunity for the
improvement of the quality of livelihood is of prime importance. The effective ownership of the
development agenda coupled with the spirit of self-reliance, at all societal levels, are major driving
forces for the realization of the Vision. Tanzanians should learn to appreciate and honour hard work,
creativity, professionalism and entrepreneurship and strive to develop a culture of saving and
investment.

The key elements of this developmental mindset and empowering culture are the following:

development oriented culture of hard work and creativity

A progressive and development oriented culture needs to be involved to link the people's way of life to
the attainment of the goals of the development vision with particular regard to cultivating and nurturing
a culture of entrepreneurship and self-development through creative and innovative hard work,
responsibility, discipline, respect for life, education, saving and investment and fostering self confidence
and self esteem among individuals.

ii. Culture of saving and investment

A culture and habit of saving and investing productively to generate wealth for individuals, households,
communities and the nation has to be cultivated and promoted. In the same vein, a culture of wealth
creation and accumulation for development must also be reinforced by a culture of maintenance to
prevent unnecessary loss of capital stock.

iii. Developmental community spirit

A positive community spirit well balanced with individual initiative in the promotion and management of
socio-economic development activities and in other national affairs, at all levels of society, should be
developed by inculcating a culture of sharing of ideas and facilities within communities and between
communities as one way of pooling resources for the good of all.

iv. broad human development strategy

There is need to promote a broad human development investment strategy which involves a wide range
of players as well as a broad resources base which embraces individuals, families, communities, agencies
and corporate bodies.

v. a learning society

The society should be encouraged to learn continuously in order to upgrade and improve its capacity to
respond to threats and to exploit every opportunity for its own betterment and for the improvement of
its quality of life.

vi. Incentive system to reward such attributes as excellence, creativity, innovation

The management environment should be transformed at all levels. This can be achieved by putting into
place incentives that encourage and reward individuals, groups and firms to embrace initiative,
creativity, innovativeness and excellence. This transformation must be reflected in the education
system, training institutions, recruitment and promotion process and in business culture.

vii. Education as a strategic change agent

Education should be treated as a strategic agent for mindset transformation and for the creation of a
well educated nation, sufficiently equipped with the knowledge needed to competently and
competitively solve the development challenges which face the nation. In this light, the education
system should be restructured and transformed qualitatively with a focus on promoting creativity and
problem solving.

4.2 Competence and Competitiveness

Competence of the nation in the management of development will be achieved when the government
provides a conducive environment for actors to effectively harness domestic resources in order to attain
competitiveness in their diverse economic activities. Competence and competitiveness, as driving
forces, will be realized through sound macroeconomic policies, adequate and reliable infrastructural
development, quality education, effective utilization of domestic resources, higher productivity and
strengthening of the capacity to effectively anticipate and respond to external changes.

Among the strategies for the realization of this goal are the following:

i. Sound macroeconomic management

Reorientation of the role of government and the enhancement of its core competence in providing
leadership through public policy deserves the highest priority. The aim being to ensure stability,
continuity and predictability of the environment in which economic decisions are made. There is need to
put in place a sound and stable macroeconomic environment recognizing the prime importance of
getting the macroeconomic fundamentals right and their resultant role in attaining high levels of
domestic savings and investment, promoting price stability and the management of macroeconomic
balances to ensure that the Tanzanian society does not live beyond its means.

ii. Infrastructural development

Investment in infrastructure must be accorded the highest priority and be spearheaded by the
government. This investment must also involve the private sector and communities generally. In
particular, the development of the road network is absolutely essential for promoting rural
development. Investment in energy, water and telecommunications is also central to the stimulation of
local and foreign investment and for creating wealth and employment-generating activities.

iii. Promotion of science and technology education

The education system must instill a science and technology culture from its lowest levels, giving a high
standard of education to all children between the age of 6 to 15. Basic sciences and mathematics must
be accorded signal importance in keeping with the demands of the modern technological age. Science
and technology education and awareness of its applications for promoting and enhancing productivity
should permeate the whole society through continuous learning and publicity campaigns.

iv. Promotion of Information and Communication Technologies (ICTs)

Advanced micro-electronic information and communication technologies (ICTs) are central to

competitive social and economic transformation. ICT costs are continuing to fall while their capabilities
and resultant profitability enhancements are increasing.

These technologies are a major driving force for the realization of Vision. They should be harnessed
persistently in all sectors of the economy and should be put to benefit of all social groups with a view to
enabling the meeting of basic needs of the people, increasing productivity and promoting
competitiveness.

The new opportunities which the ICTs are opening up can be harnessed to meet the goals of the Vision.
However, appropriate skills and capabilities would have to be put in place. This task demands that
adequate investments are made to improve the quality of science based education and to create a
knowledge society generally.

v. The utilization of domestic resources

The mobilization and effective utilization of domestic resources (natural, financial and human) is the
foundation on which the realization of the Vision rests. These resources should be utilized to build
adaptive capacity for promoting economic activities that enjoy comparative and competitive advantages
with a view to minimize the impact of external economic shifts and shocks.

vi. Transformation of the economy towards competitiveness

The quality of livelihood should be raised by increasing the level of productivity in all sectors. This goal
can be achieved by transforming the economy into a strong, resilient and competitive one, buttressed
by science and technology. The strategy to be adopted is that of transforming the economy from a
predominantly agricultural one with low productivity to a diversified and semi-industrialized economy
with a modern rural sector and high productivity in agricultural production which generates reasonably
high incomes and ensures food security and food self-sufficiency. The diversification of the economy
must be based on a dynamic industrialization programme focused on local resource-based industries
(agro-industries) and capable of meeting the needs of other sectors whilst continuously developing
activities that have dynamic comparative advantages.

vii. Development of the capacity to anticipate and respond to external changes

The capacity to anticipate and effectively respond to external changes must be developed as a driving
force in a world of changing market, technological and environmental conditions. High priority must be
given to organizational learning and creativity in response to the challenges of nature (including
disasters) and to developments in the regional and global economy.

4.3 Good Governance and the Rule of Law

Governance must be made an instrument for the promotion and realisation of development, equity,
unity and peace buttressed by the rule of law and involving public participation in the war against
corruption and other vices in society. Good governance must permeate the modalities of social
organization, coordination and interaction for development. This can be achieved by an institutional
framework which is capable of mobilizing all the capacities in society and coordinating action for
development. Good governance must be cultivated by promoting the culture of accountability and by
clearly specifying how incentives are provided for and related to performance and how sanctions are
imposed.
An appropriate institutional framework is needed to exhort and exhilarate the commitment of men,
women and youths to stimulate creativity, galvanize diverse efforts and recognize and reward deserving
performance. Three basic principles underpin this institutional framework:

i. Unleashing the power of the market and private sector

Harnessing the power of the market and the dynamism of private initiative to achieve a high economic
growth.

ii. Striking a balance between the State and other institutions

The role of the State and its new place in the economy must be clearly redefined to permit and facilitate
various actors (e.g. the family, business enterprises and civic organizations) to participate in the market
in the context of national and global realities.

Specifically, the role of the State must be to:

Ensure that a legal and regulatory framework is in place and functioning.

Undertake directly and encourage other actors to undertake investments in infrastructure development.

Undertake directly and encourage others to invest in education and training.

Ensure efficiency and commitment to developing and building the State's capacity to facilitate and
regulate the development process including influencing and facilitating strategic investments and
selective industrial support.

Ensure that markets permit a wide participation of men, women, youths and the entire citizenry in
activities which enable the realization of the Vision. The government will have to put in place affirmative
action programmes which provide special support for promoting the participation of all the indigenous
population in the wealth creation and ownership process. These programmes will need to be effectively
supported to ensure that the place of the indigenous Tanzanians in the ownership and control of the
economy is enhanced; and

Ensure that mechanisms for promoting dialogue, consultations and networks of various actors in
development are put in place and are made to work.

iii. Promoting democratic and popular participation

Deliberate efforts must be made to empower the people and catalyse their democratic and popular
participation. The strategy should entail empowering local governments and communities and
promoting broad-based grassroots participation in the mobilization of resources, knowledge and
experience with a view to stimulating initiatives at all levels of society.

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5.0 IMPLEMENTING THE VISION

Effective realisation of the development Vision 2025 hinges on its implementation. There are two key
prerequisite for effective implementation of the Development Vision 2025. These are good governance
and competitiveness of the economy. It is obvious that these forces cannot happen by themselves but
have to be deliberately grown and natured. In this regard, if it so happens (for instance) none of these
prerequisites are created, there is obvious possibility that by the year 2025 there would be no positive
impact on the quality of life of the people and instead it would increasingly worsen year after year. If
there would be good governance and a weak economy or a competitive economy and weak governance
there would be some possibilities of realising some positive results although by all means, these
achievements cannot be sustainable and thus would not be effective in improving the quality of life of
the people. The Economy cannot be sustained if there is a weak leadership and the positive impact of
good governance would not be realized with a declining economy. Sustainable realisation of the
Development Vision 2025 would therefore hinge on the combination of good governance and a strong,
competitive economy.
Tanzania's experience reflects clearly the important role of leadership in the development of its men
and women. At the promulgation of the Arusha Declaration, good governance was identified as one of
the key prerequisites for attaining the development goals of the Declaration. Various policies were
adopted aiming at attaining rapid transformation of the socio-economic structure and improving the
quality of life of men and women of which sensitisation of the society at large for the purpose of
realizing effective implementation of these policies was accorded high priority. Along with this, various
training programmes to build up capacities or skills for those responsible for implementation were
prepared and implemented.

Just as it was for the Arusha Declaration good governance is essential for the successful realisation of
the Development Vision 2025. It is essential that the leadership has a developmental mindset and be
able to interpret these views in executing their daily duties. It is also essential for the leadership to have
the capacity to build and support existence of an effective administrative system that would effectively
follow-up and manage the implementation process. This also requires availability of a leadership which
continuously learns, listens and which is tolerant to opposing views and opinions of various groups of
the society. In this regard, appropriate measures to prepare the leadership to adapt to this new
framework have to be put in place and or in those areas where these measures are already effective be
strengthened. In addition to building capacities, it will be essential for the implementors to be of the
same mind-set and vision as their leaders.

There is a very close relationship between the quality of life of the society as well as an individual and
the capacity of the economy in which it enables an individual, society and the nation at large to live and
sustain higher quality of life. Tanzania has ample experience in this area. Until the mid 1970s the
Tanzania economy was strong and growing at an average rate of between 5 - 6 percent per annum and
the inflation rate was considerably low. The high level in the standards of living of the people which was
attained then is largely attributed to that high level of economic growth. Failure to sustain such standard
of living in the latter years was a consequence of economic instability which occurred during that period.
Standards of living deteriorated despite the fact that the economy was much better than it had been in
the 1960s and 1970s. The economy started to stagnate and was reflected by a slowing down of
economic growth and high rates of inflation.
In order to attain real economic recovery and surpass the levels of 1960s and 1970s, it is essential to
ensure existence of a stable economy with a high rate of growth. What is required therefore is to build a
strong and resilient economy that is capable of responding accordingly and capitalize on the benefits
resulting from an increasingly competitive environment. The leadership and implementers will be
expected to identify the appropriate policies and strategies that would enable the nation to attain such
an economic structure.

The implementation of the Development Vision 2025 should fundamentally embody the following
attributes:

i. Developmental mindset and competitiveness

In order for the Tanzania society to attain this level, there is need to:-

Ensure existence of sound economic management;

Increasingly promote investment in infrastructure by involving government, private sector and various
communities of the society;

Reactivate the commitment to self-reliance, and recultivate resourcefulness and savings culture in order
to curb and overcome the donor dependency syndrome which has led many Tanzanians into
unprecedented apathy;

Transform the education system so that it can develop the human capital in tandem with the socio-
economic changes envisaged in the Vision 2025. The curriculum at various levels of education should be
overhauled along side the needs of implementing the vision 2025.

ii. Democratization and popular Participation

In order for the Tanzania Society to reach this level, there is a need to:-
Create an open and democratic society that provides equal opportunity to every person. This entails
creation of an active and participatory civil society in the articulation of its needs and in taking pride to
fulfill its societal responsibilities;

Sensitize society to use the democratic election mechanism at its disposal to elect good incorruptible
and responsible leaders. Leaders with personal integrity, committed to the development of society and
to the pursuit of the interests and welfare of the whole society;

Improve public service delivery by ensuring that public servants are accountable to the people;

Permit a greater role for local actors to own and drive the process of their development. Local people
know their problems best and are better placed to judge what they need, what is possible to achieve
and how it can effectively be achieved;

Decentralize the political administration and the fiscal structure roles and responsibilities on the basis of
the principle of subsidiarity to commit individuals, households, communities and local government to
the pursuit of the common Vision goal;

iii. Monitoring, Evaluation and Review

This framework is essential in order to:-

Ensure that the process of evaluation and monitoring is used to track down progress towards the
realization of the Development Vision goals. The best way to track down such progress is to start with ~
The envisioned end-result~and work backwards to map out the milestones;

Develop specific performance benchmarks and measurable outputs to assist in monitoring the process
of implementing the Development Vision goals;

Review the Development Vision in every five years so to gauge how the nation is faring and what
adjustments need to be made as part of a regular evaluation and monitoring exercise.
Establish an efficient system of information and communication to facilitate timely monitoring and
evaluation and ensuring a synergy between the various actors in society.

iv. Governance and the Rule of Law

Existence of this framework requires the society to:-

Build the capacity of the public sector, civil society, media, parliament, the law enforcement institutions
and others inside and outside the government as a means to build accountability to concerns public;

Sensitize the people and raise their level of awareness as necessitated by the need to implement the
Development Vision;

Adopt strategies to build integrity by promoting accountability and transparency;

Ensure that all service delivering institutions provide correct information and analysis in response to
their obligations to society;

Enshrine and entrench the pillars and core values of the Development Vision into the Union Constitution
to make them sacrosanct and thereby galvanizing Tanzanians behind their practical realization.

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6.0 CONCLUSION

The Tanzania development Vision 2025 seeks to realize patriotism, nationalism and to strengthen
national cohesion of all the people in society, taking into consideration current environment in the
economic, political and other relevant factors. The national cohesion will be realized only when the
implementation of the Development Vision entails equal opportunities for participation of all the people
and the same opportunities extended to all people for the enjoyment of the fruits of its achievements.
The formulation of the Development Vision 2025 has been realized through a national consensus which
involved extensive consultations with the various groups in Tanzania society in the form of workshops,
interviews, meetings, etc. It is emphasised that the Development vision's implementation be equally
participatory. For it is only through such a participatory process that the Development Vision will acquire
a people-centred and people-driven character which is the main foundation for obtaining the people's
genuine commitment towards ensuring the realisation of their goals.
People's Participation
People's participation is becoming the central issue of current period. Participation means that people
are closely involved in the economic, social and cultural and political processes that affect their lives.
People may in some cases have complete and direct control over these processes – in other cases the
control may be partial or indirect. People have constant access to decision making and power.

Participation in this sense is an essential element of human development. It generally refers to people's
involvement in particular projects or programmes. But today participation means an overall
development strategy focusing on the central role that people should play in all spheres of life. Human
development involves widening their choice and greater participation enables people to gain for
themselves access to a much broader range of opportunities.
People can participate as individuals or groups.As individuals in a democracy they may participate as
voters or political activists or in the market as entrepreneurs or workers.Often they participate more
and more effectively through group action as members of a community organization or a trade union or
a political party.

Since participation requires increased influence and control,it also demands increased empowerment in
economic,social and political terms.In economic terms this means being able to engage freely in any
economic activity. In social terms it means being able to join fully in all forms of community life without
regard to religion,colour or sex or race.In political terms it means the freedom to choose and change
governance at every level from top to bottom.All these forms of participation are intimately
linked.Without one the others will be incomplete.

Participation from the human development perspective is both a means and an end.Human
development stresses the need to invest in human capabilities and then ensure that those capabilities
are used for benefit of all.Greater participation has an important part to play there.It helps to maximize
the use of human capabilities and is thus a means of increasing levels of social and economic
development.But human development is also concerned with personal fulfillment.So active participation
which allows people to realize their full potential and make their best contribution to society is also an
end in itself.

Many new windows of opportunity are opening. The cold war in East-West relations is over and there is
a good chance of phasing it out in the developing world. The ideological battles of the past are being
replaced by a more pragmatic partnership between market efficiency and social compassion. The rising
environmental threat is reminding humanity of both its vulnerability and its compulsion for common
survival on a fragile planet.

Many old concepts must now be radically revised. Security should be interpreted as security for people,
not security for land. Development should be woven around people not people around development. It
should empower people and groups rather than take away power from them. Many of the old
institutions of civil society need to be rebuilt and many new ones created. The future conflicts may well
be between people rather than between states, national and international institutions will need to
accommodate much more diversity and difference and to open many more avenues for constructive
participation. Participation is a process and not a event. It will proceed at different levels for different
regions and countries and its forms and extent may vary from one stage of development to another.

The implications of widespread participation are profound embracing every aspect of development.
Markets need to be reformed to offer everyone access to the benefits they can bring. Governance needs
to be decentralized to allow greater access to decision making. Community organizations need to be
allowed to exert growing influence on national and international issues. We must realize the fact that
human development is the development of the people and for the people.
The importance of land in a modern economy
THE POLITICAL ECONOMY OF LAND: Putting Henry George in His Place
Frank Stilwell and Kirrily Jordan, The Journal of Australian Political Economy, December 2004.
Land is the most basic of all economic resources, fundamental to the form that economic development
takes. Its use for agricultural purposes is integral to the production of the means of our subsistence. Its
use in an urban context is crucial in shaping how effectively cities function and who gets the principal
benefits from urban economic growth. Its ownership is a major determinant of the degree of economic
inequality: surges of land prices, such as have occurred in Australian cities during the last decade, cause
major redistributions of wealth. In both an urban and rural context the use of land – and nature more
generally – is central to the possibility of ecological sustainability. Contemporary social concerns about
problems of housing affordability and environmental quality necessarily focus our attention on ‘the land
question.’

These considerations indicate the need for a coherent political economic analysis of land in capitalist
society. Indeed, the analysis of land was central in an earlier era of political economic analysis. The role
of land in relation to economic production, income distribution and economic growth was a major
concern for classical political economists, such as Smith, Ricardo and Malthus. But the intervening years
have seen land slide into a more peripheral status within economic analysis. Political economists
working in the Marxian tradition have tended to focus primarily on the capital-labour relation as the key
to understanding the capitalist economy.1 Neo-classical economists typically treat land, if they
acknowledge it at all, as a ‘factor of production’ equivalent to labour or capital, thereby obscuring its
distinctive features and differences. Keynesian and post-Keynesian economists have also given little
attention to land because typically their analyses focus more on consumption, saving, investment and
other economic aggregates.

1 A significant contributor to the analysis of land and rent within the Marxian tradition is David Harvey
(see, for example, Harvey, 1982: 330-367). However, it is notable that Harvey comes from a background
in geography, not economics.
However, there is an alternative current of political economic thought for which ‘the land question’ is
central. This is the tradition based on the ideas of Henry George. This article seeks a balanced
assessment of the usefulness of George’s ideas in the modern context. It outlines how insights derived
from Georgist thinking can help in dealing with contemporary economic, social and environmental
problems, while noting deficiencies and additional concerns. Following a general summary of Georgist
ideas and policy proposals, six themes are addressed:

the moral issue,

wealth inequality,
housing affordability,
environmental concerns,
urban development and
economic cycles.
In each case it is argued that Georgist insights provide a valuable but incomplete basis for analysis and
policy.

George and Georgism

What are the key ideas advanced by Henry George and promoted by his followers? Like Marx’s analysis
and the political movement he inspired, George needs to be understood in historical context. Although
not a trained economist, his ideas gained widespread currency in economic debates throughout much of
the Western world in the late nineteenth century. Also like Marx, his analysis stemmed from both
ethical and economic considerations. He was primarily concerned with exploring the reasons why
poverty and destitution coexisted with economic growth, and saw the root cause of these problems in
the prevailing policies towards land. It is this focus on land, contrasting with the Marxian focus on
capital, that is the characteristically Georgist emphasis.

George saw land as a community resource provided by nature, to which every human being had an
equal right. He argued that, since land was fixed in supply, the system of private land ownership allowed
the wealthy few to enjoy exclusive rights to land and its benefits, while alienating the poorer majority
from land ownership and forcing them to pay rent to landowners in order to access this necessary
resource. Moreover, the collection of rents by landowners allowed them to increase their wealth
without contributing to the productive efforts of society. As the population grew, so too did the demand
for land, forcing rents and land values ever higher. In addition, increases in land value resulting from
publicly-funded developments, such as roads and public transport systems, unduly benefited
landowners at the expense of the community. Such unearned gains from landownership encouraged
speculation in land, pushing prices even higher, while exposing the economy to the risks of speculative
‘booms’ and ‘busts’.

One might expect such arguments to have led to the advocacy of land nationalisation. But George
thought this unnecessary because a tax on land could be effective in capturing the economic surplus
arising from land ownership. This tax would generate all the revenue necessary to fund public
expenditures. George thought that such a land tax would permit the removal of other taxes on labour
and capital, which he regarded as inherently inefficient. He argued that taxes on incomes, sales, and
payrolls, for example, acted as disincentives to production and active endeavour, thereby stifling
economic growth and creating a barrier to full employment. A land tax, by contrast, would be both
economically efficient and more equitable in its distributional effects.

George’s advocacy of replacing all existing taxes with a single tax on land values was powerful. He
argued that this tax would redistribute the wealth that would otherwise accrue to private landowners,
forcing them to repay the community for their exclusive use of a public resource. Moreover, such
redistribution would reduce wealth inequalities and allow massive improvements in welfare provisions
and public services. In addition, removing taxes on labour and capital would boost economic growth and
provide a stimulus to employment. Conversely, taxing land values would reduce speculation in land and
depress land prices, allowing greater access to landownership while reducing economic instability.

The publication of George’s major treatise, Progress and Poverty, in 1879 stimulated widespread
interest. Supporters emerged throughout the Western world, roused by George’s explanation of wealth
inequalities and inspired by his proposed solution of a single tax on land. However, this initial wave of
interest subsided, and George’s ideas have been almost universally ignored in ‘respectable’ economic
circles during the last century. They have been accorded the status of a historical curiosity, at best (see,
for example, Heilbroner, 1968: 166-73). But a Georgist movement advocating a land tax has persisted
and the last few years have seen a partial resurgence. While still ignored by the economic orthodoxy,
interest in George’s work has been stimulated by modern concerns about housing affordability and
environmental decay. Such revival of interest recognises that these problems stem, in part, from
inadequate policies relating to land. Some members of Green parties, in particular, have embraced
Georgist ideas.

Not all those attracted to Georgism embrace the extreme single-tax position. A more pragmatic position
emphasises retaining a mix of different taxes but putting more emphasis on land tax revenues and less
on income, consumption, payroll and other taxes. In the Australian context a pragmatic Georgism
emphasises:
aligning the rates of land taxes currently levied by the State governments so as to eliminate inter-State
variations in the tax scales;
removing the existing exemption from land tax for owner-occupied property;
ensuring that all rate revenues generated by local governments are based on unimproved capital values,
ie. on land values only, not including the value of any property on that land;
combining these State and local revenue-raising measures into a more comprehensive nationally
uniform land tax system;
incrementally raising the rate of land tax and making corresponding reductions in taxes on income,
consumption, employment, capital gains (other than gains arising from land values) and stamp duties.
These reforms would comprise a radical restructuring of the tax system. There is little prospect of the
major political parties embracing it in toto in the foreseeable future.2 But whether is it a worthwhile
direction for reform in the long-term warrants careful consideration. This requires attention to the
fundamental principles of a Georgist political economy.

2 However, it is pertinent to note some support from an otherwise unlikely source – the Federal
Government’s Productivity Commission. Its recent report on First Home Ownership (2004) explores the
case for shifting from stamp duties to higher land taxes.
The Moral Issue

Georgism has a distinctive ethical basis. So a review of the contemporary relevance of Georgist political
economy can usefully begin by making this explicit. The key moral issue is the private appropriation of
public wealth. As George recognised, land is a ‘gift from nature’ and, as such, is rightfully a community
resource. Hence, those deriving benefits from the private ownership of land should recompense the
community for the privilege. This principle has strong echoes of the idea of ‘usufruct’, a pre-capitalist
term denoting a person’s legal right to use and accrue benefits from property that does not belong to
them. In return, the user is obliged to keep the property in good repair and pay all costs as a ‘ground
rent’ (‘Lectric Law Library, n.d). The concept of ‘usufruct’ has fallen out of common usage, so one
hesitates to try to revive it. Moreover, as Richards (2002) notes, ‘it is difficult to image how this word
could be employed, or brought back into circulation, in the modern world, since we live in a world in
which people tend to be remarkably unsympathetic to the property rights or claims of others’.
However, the principle of ‘usufruct’ goes to the heart of the question of how best to balance collective
and individual rights and interests. George’s solution of a tax on the value of land squarely addresses
this issue. By returning a proportion of the land value to the community in the form of taxation revenue,
restitution would be paid for the use of a community resource. This is an ethical justification for land
taxation.

Indeed, one could say that the term ‘tax’ is a misnomer because what is really involved is value created
by the community being retained by the community rather than being appropriated by private
landholders. For example, under current arrangements landowners receive ‘windfall’ gains when the
market value of their land rises as a result of publicly provided infrastructure being built nearby, or when
local government zoning decisions reclassify their land as appropriate for further development. In this
way, individual landowners stand to reap huge benefits at the expense of community-generated
processes. Such arrangements create an odd incentive: allowing landholders to appropriate the
unearned wealth generated by rising land values, thereby rewarding this unproductive activity, while
taxing productive endeavour. The Georgist land tax ‘remedy’, by contrast, would eliminate such
perverse incentives and thereby more effectively align private and public interests in the use of society’s
resources.

However, the Georgist position cannot claim to provide a fully comprehensive solution to the moral
issue of balancing individual and collective rights. While land tax addresses the private appropriation of
wealth from land, it does not address the appropriation of wealth from other sources. The
characteristically Georgist focus on land as the source of the maldistribution of wealth is limiting in this
respect. Political economists have long argued that the accumulation of capital also arises from the
exploitation of labour, for example. Whether the exploitation of labour is systemic, as Marx argued, or
exceptional is properly a matter of debate. Either way, the point is that an ethical basis for the economic
system, and for the tax system in particular, needs to take account of both land-related and other
sources of unjustifiable wealth appropriation. The moral issue thereby links with a second concern of
more explicitly economic character – the sources of inequality in the distribution of wealth.

Wealth Inequality
Georgist analysis strongly emphasises landownership as a principal source of inequality. Because land is
a strictly limited resource, its private ownership necessarily excludes large sections of the community
from its benefits. A landowning class thereby gains political economic power. In George’s own time the
social identity and power of this landowning class was distinctive. Those who could not afford to buy
land were forced to pay rent to the wealthier few who could. By taxing the value of land, George posited
that publicly created wealth could be recouped from the private landowners and redistributed
throughout the community more equitably in order to address social goals.

Are George’s arguments about land ownership and wealth inequality relevant today? Australia provides
an interesting example, because land is the single largest item in national wealth. Laurie Aarons outlines
the concentration of farming land in particular in the hands of a few very wealthy corporations and
individuals – what he refers to as ‘corporate squattocracy’ (Aarons, 1999: 23). The relentless increase in
urban land values in recent years has also produced dramatic redistributions of wealth. In the State of
New South Wales, for example, land values increased by about $361 billion over the period 1993 – 2003.
The existing land-based taxes clawed back only $44 billion in government revenues, comprising only
about 12% of the land-related economic surplus. So 88% was retained as ‘unearned income’ by
landowners (Stilwell and Jordan, forthcoming). A higher rate of land tax with fewer exemptions could
have substantially reduced this private wealth appropriation. This is not necessarily to posit the
desirability of recouping 100% through land tax, because that would certainly raise major problems of
people’s ability to pay, given that much of the increased wealth resulting from land price inflation has
not been realised as current income. But it is indicative of the current imbalance between private and
public appropriations of the surplus arising from increases in land-based wealth.

However, it is also pertinent to note that land ownership today is significantly less concentrated than in
George’s time, with around 70% of Australians being home-owners (including those in the process of
purchasing their homes with mortgage finance). According to the recent Household, Income and Labour
Dynamics in Australia (HILDA) Survey, home-ownership is unevenly distributed between income groups,
with 56% of households in the lowest income quintile owning their own homes, compared to 85% of
those in the highest quintile (Kohler et al, 2004: 10). But this distributional inequality is significantly less
marked than the ownership of other assets, such as shares for example. Of course, most land ownership
for residential purposes involves very small tracts, typically only about one-sixth of an acre in the
suburban areas of the major cities. Flat-owners, growing annually as a proportion of the population,
usually own less land and do so more indirectly through strata property titles. So the form of land tax
(that is, whether flat rate or on a progressive scale, whether applying to all land or only that above a
‘threshold’ value, or exempting owner-occupied property) becomes crucial to its effectiveness as a
mechanism for tackling distributional inequality. It is also crucial to the political acceptability of land tax
reform.

In addition, it is apparent in modern economies that not all socioeconomic inequalities stem from the
unequal capture of the economic surplus associated with land. Inequalities are also generated by
unequal access to capital, educational and employment opportunities. These inequalities are imperfectly
correlated with wealth deriving from land ownership. Hence, additional means of redress are needed, as
J. K. Galbraith and other institutional economists have consistently argued (e.g. see Galbraith, 1992;
2002: chapter 3). For example, ‘floors,’ such as minimum wage requirements and ‘social security’
payments, must be provided to guarantee a minimum income to all members of society, including those
excluded from the production process. A strong, albeit unfashionable, case can also be made for
‘ceilings’ to limit excessive salaries, such as those of some top corporate executives, which far outweigh
their productive contributions to society. The average executive remuneration levels in major Australian
companies increased from 22 times average weekly earnings to 74 times average weekly earnings in the
period 1992-2002 (Shields et al, 2003: iii). It may be, as George argued, that ‘the increase of land values
is always at the expense of the value of labour’ (George, 1966: 224) but the complex distributions of
income received by capital and labour are not readily explicable in terms of an analysis focusing
exclusively on land.

Housing Affordability

A third aspect in this ‘stocktaking’ of the relevance of Georgist analysis and policy to contemporary
political economic conditions concerns the persistent problems of housing affordability. The difficulty of
purchasing, or renting, affordable housing has reached social crisis proportions in many large cities
around the world. In Sydney, for example, a median-priced house could be bought for just under four
years of average Australian earnings in 1986, but an equivalent house in 2003 cost over twelve years’
worth of earnings (Stilwell, 2003). This constitutes an enormous barrier to home-ownership for a
younger generation, a problem that both Federal and State Governments have sought to redress by the
provision of first home-buyers’ subsidies.3 It is not typically the house itself that has been the cause of
the inflation, but the price of the land on which it stands. So, looking at the situation from a Georgist
perspective immediately directs our attention to how the demand and supply of land affects housing
affordability.

3 These subsidies can have counter-productive effects to the extent that they increase demand and
therefore the price of housing. See, for example, the Report of the Productivity Commission Inquiry into
First Home Ownership, (2004: 71-73).
The demand for land involves both use values and exchange values. People seek land because the
housing built on it provides shelter and security, but they also purchase it as a store of wealth and a
means of capital appreciation. A particularly important driver of real estate prices has been the
speculative demand, as investors seek capital gains in the property market. In Australia, this has been
such common and longstanding practice that it has been referred to as ‘the national hobby’
(Sandercock, 1979). By ‘creaming off’ a part of this potential capital gain, a higher uniform rate of land
tax would act as a disincentive to this property speculation, and could therefore be expected to exert a
downward influence on property prices. Georgists have always been emphatic that land taxes are
different from other taxes in this respect – they depress prices because they reduce demand. So the
usual fears that a tax will be ‘passed on’ to customers (such as housing tenants, in this case) do not
apply.4 By making land less attractive as an item to be purchased in the hope of making capital gains,
land tax can therefore be an important check on the inflationary process.

4 This issue is discussed in more detail in Gabbitas and Eldridge (1998: 151-154). The Productivity
Commission Staff Research Paper written by these authors suggests that, while passing on the tax is
unlikely to occur in the short term, in the longer term supply-side responses may shift some of the
burden onto subsequent buyers and/or users of the land.
However, while a higher uniform land tax could be an important component in a policy addressing
housing affordability, it seems unlikely to provide a complete solution. The severity of the housing
problem in Australia, for example, also derives partly from the dwindling supply of public housing. Public
housing is now less than 5% of the total housing stock and falling (National Housing Alliance, 2004: 5).
Governments have withdrawn funds from public housing and tightened entry requirements (for
example, lowering the threshold for the means test). This has caused public housing waiting lists to
lengthen and put greater pressure on the private rental sector. More and more people have been forced
into circumstances of significant ‘housing stress,’ paying a third or more of their net income for housing
(Hawtrey, 2002), and further adding to inflationary pressures on housing prices.

There is a potentially important link between these concerns – land tax and public housing – because a
higher, more uniform land tax could generate revenue to finance a significantly larger public housing
sector. That would, in effect, kill two birds with one stone, providing the twin basis for an assault on the
problem of housing affordability.

Environmental Concerns

What about the relevance of Georgist ideas to current concerns with environmental quality and
ecological sustainability? Here too there is a strong claim to consider. Interest in Georgism has been
reinvigorated in recent years by the need to develop public policies that reflect the nature of land as a
finite natural resource. From a ‘green’ perspective, land tax is a useful tool in discouraging the excessive
and wasteful use of land. That is, the prospect of paying a high rate of land tax can be expected to
discourage people from purchasing more land than they need directly for their own purposes. It accords
with the principle that people should be taxed according to their use of scarce environmental assets.

This ‘ecological take’ on Georgism is particularly powerful at a time of intensifying global environmental
problems and recognition of the need for remedial policy responses. It requires creative extension of
Georgist principles because the limitation of George’s own analysis in this context is its primary focus on
land. A range of other natural resources needs to be considered, linking up with the broader concerns of
modern environmentalists such as Herman Daly (see, for example, Daly and Cobb, 1990). Hence, land
tax should be seen as an adjunct to taxes on the use of other scarce environmental assets, including
mineral, forestry and fishing stocks, and also bandwidth for radio and telecommunications, for example
(Stilwell, 2002: 316-317). It should also be seen as a corollary to other taxes that discourage
environmental damage, including resource rental taxes, carbon taxes and fuel excises.

The case for these environmental taxes need not necessarily rest on Georgist principles, of course, but
Georgism can claim to provide a unifying analytical framework. A common feature of ‘environmental
taxes’ is that they are all targeted, like land tax, at reducing the scope for profiting from the private
appropriation of natural resources, and thereby restricting the profligate use of those resources.
A tension remains, reflecting the Georgist orientation towards taxes rather than more directly
regulatory interventions. Whether the use of the price mechanism in this ‘environmental fine tuning’ is
sufficient for dealing with pervasive environment threats is a moot point. The nature and severity of
environmental stresses is such that more directly proscriptive environmental policies are commonly
needed to protect natural resources. The creation and maintenance of national parks, for example,
constitutes a necessary direct regulation of land-use: the market, even when modified by taxes, cannot
absolutely guarantee the conservation of such crucial assets. In other words, protection of ‘natural
capital’ may commonly require regulation as well as taxation.

Urban Development
Concerns about urban policies also raise questions about the current relevance of Georgist ideas. For
example, it is pertinent to ask whether a more uniform land tax would encourage the more efficient
utilisation of urban space. George argued that, in order to cover the costs of a higher rate of land tax,
landowners would be forced to put their land to its most productive use, and could not afford to hold it
idle. Here is a clear link with the modern concerns to discourage ‘urban sprawl’ and to promote ‘urban
consolidation.’ To the extent that a higher land tax would encourage the development of more housing
in existing urban areas, the pressures for housing development in outlying areas would be significantly
reduced. This, in turn, could reduce the burgeoning demand for transport that is currently characteristic
of large cities.

Land tax also impacts on the politics of peripheral urban expansion. Currently, the prospect of huge
capital gains resulting from decisions by local governments to rezone land from rural to urban acts as an
incentive for landowners on the fringes of built-up areas to lobby for changes that will allow increased
development. Hence, landowners push for rights to subdivision, irrespective of whether or not there is
actual demand (Day, 1995: 3). By creaming off the gains from windfall increases in land values, land tax
obviates this bias towards relentless urban expansion.

However, the question remains: would a uniform land tax be sufficient to produce more efficient
patterns of urban development? Or would there still be a need for direct land use controls? Land tax can
certainly be a tool for discouraging the wasteful use of land. It tends to discourage people from
purchasing excessive amounts of land or leaving it idle. However, it may also encourage the
overdevelopment of land in order to produce the income stream necessary to pay the higher rate of tax.

Critics of urban consolidation such as Patrick Troy (1996) have examined the potential problems of such
overdevelopment, including a range of environmental impacts such as altered hydrological processes. It
seems to be an overly bold claim that a Georgist land tax alone would be sufficient to achieve optimal
urban development patterns. Land use controls a necessary adjunct to land tax – in setting minimum
requirements for green space, for example.

Local government planning controls are also important to prevent incompatibility of land uses, such the
development of hazardous or unhealthy industrial activities adjacent to residential areas. Targeted
decentralisation policies are a means of encouraging the further development of regional centres. Such
policies can work in conjunction with land taxes to ease growth pressures in the larger cities, while
addressing long-standing spatial, social and economic inequalities (Stilwell, 2000: 254-260). The
desirability of promoting more decentralised regional development is consistent with a Georgist
perspective, but not altogether compatible with the claim that land tax would facilitate urban
consolidation. It seems clear that it ‘overburdens’ land tax to expect it alone to produce the best spatial
outcomes, taking account of all the economic, social and environmental issues involved in urban and
regional policy. The various other policy instruments – including regulations relating to green space,
zoning, and the provision of public infrastructure to pave the way for decentralisation – are important
complements to land taxation. In other words, land tax is best regarded as a necessary but not sufficient
condition for more effective spatial policy.

Economic Cycles

Georgists have also frequently claimed to be able to explain and ameliorate, even resolve, the cyclical
character of the capitalist economy. George argued that a higher uniform land tax could reduce the
severity of booms and busts in the housing market by reducing the speculative investment in land. This
would produce more stable economic conditions throughout the economy, removing the boom-bust
cycle to which capitalism is otherwise prone. It is an argument that has contemporary Australian
relevance because the boom-bust character of the urban property market is clearly a significant factor in
overall cyclical economic instability. An earlier article on Australian land price trends by Kavanagh (2001)
has illustrated this connection, demonstrating that, while the property market is more volatile than the
economy as a whole, there has been a clear temporal connection between the two patterns of cyclical
behaviour over the last half century. Property booms and busts have typically coincided with swings in
overall national economic performance. The policy implication is that, by smoothing out cycles in the
housing market, a uniform land tax could help to avoid periodic crises in capitalist economies more
generally.

However, the argument needs to be kept in perspective. Periodic economic recessions cannot be solely
attributed to speculation in land.

Inadequate levels of aggregate demand, problems of overproduction, and problems of instability in

financial markets are among other causes of interruptions to the process of capital accumulation. Land
tax cannot feasibly claim to redress all the systemic contradictions and malfunctions of a capitalist
economy. Additional counter-cyclical policies are necessary. These include macroeconomic stabilisers,
such as monetary and fiscal policies, that can contribute to reducing the cyclical tendency to which the
economy is otherwise prone, along with incomes policy and the more radically interventionist
‘socialisation of investment’ that Keynes (1936: 378) advocated. So here, too, land tax seems to have the
status of a necessary but not sufficient condition for progressive economic reform.

Conclusion

Enthusiastic proponents of Henry George’s ideas have often presented them as a panacea for the
economic, social and environmental problems that beset contemporary society. Indeed, the Georgist
analysis does have much to offer. By more adequately addressing land as a unique economic, social and
ecological resource, it can help to reveal underlying causes of currently pressing issues such as declining
housing affordability, growing economic inequality, and environmental decay.

The Georgist land tax ‘remedy’ can also play an important role in the redress of these problems.
However, there are limitations to the modern application of George’s ideas, as outlined in this article.
While a uniform land tax is a necessary component in addressing contemporary political economic
problems, it is not sufficient. It needs to be set in the context of a broader political economic analysis
and policy program, also addressing public housing, urban and regional policies, environmental taxes
and regulations, ‘floors and ceilings’ to limit income inequalities and macroeconomic stabilisation.

While the Georgist analysis redresses the general neglect of land in modern economic orthodoxy, it is
important not to go too far to the other extreme. In other words, the important emphasis on land
should not come at the expense of attention to problems associated with labour and capital and to the
complex forms of government policy necessary for the balancing of contemporary economic, social and
ecological concerns. The Georgist analysis needs to be integrated into a comprehensive political
economic analysis of contemporary capitalism.

So what does ‘putting Henry George in his place’ entail? It means recognising the political economic
importance of land and the potential social gains from the extension of land taxation. Equally, it means
recognising the necessity of relating Georgist ideas and policy prescriptions to a broader canvas of
modern political economy, including the analytical traditions associated with Karl Marx, J. M. Keynes,
and J. K. Galbraith, and modern environmental economics. Henry George’s place is in good company

Part 2 of the importance of land in a modern economy

Some people instinctively grasp the fundamental role land plays in economics. Others require time for
the ideas to take root. If you really want to understand the importance of land in the economy please
explore this website as well as the links on the right hand side. Spend some time getting to know the
ideas of Henry George and it will become clear. “Land” in the economic sense refers to all gifts of nature
– the physical world not created by human endeavours. The article below is from Martin Adams, author
of Sharing the Earth and a director at Humaniteer, an organization that seeks to promote human
welfare. We thank him for allowing us to reproduce it here.

martinadams

Why is something as basic as land still important in our technologically advanced world? After all,
developed nations even have thriving Internet economies, where wealth is created virtually yet leads to
tangible benefits in the material world. Companies such as Google don’t even use significant amounts of
land in the vast majority of their business transactions.
So why, then, does land still matter? The answer is simpler than you think: look down.

Yes, you’re standing on it right now. Land matters. It’s like the air you breath — you can’t live without it
and you probably don’t really pay much attention to it either.

It also matters because people buy and sell it. Imagine if people bought and sold the air! But unlike the
air, land is more limiting: there’s only so much of it in each location — which is why land has a price tag.
In fact, land enables you to have access to locations: if you own land in an urban environment, you’ll
have access to a lot more goods and services in the surrounding environment than if you owned land in
a rural area.

Because land is inherently limited for each location, it acts like a cool pane of glass that coalesces
invisible water vapor into droplets — by coalescing demand for a particular location into increases in its
value. As I extensively document in my forthcoming book (stay tuned here), the value of land needs to
be shared or else we’ll continue to have a host of negative side-effects such as involuntary
unemployment, ecological destruction, and even economic boom and bust cycles.

Part 3 of the importance of land in a modern economy

I was discussing Land Value Tax with someone recently and he made the point that land is not such an
important factor in the economy as it once was. Stalwart blogger Mark Wadsworth answers this one
well on his “Killer Arguments Against Land Value Tax … Not!” website, which I have pasted here, with a
little redaction:

Mark-Wadsworth-300x225

People claim “We are no longer a land-based economy”

They sometimes phrase this as: “We do not understand your obsession with land, land isn’t important in
a modern economy, therefore what’s the point in taxing rental values?”. Back in the 19th century Karl
Marx made the same false assumption.
Why are they wrong about this?

It’s true we are not an agricultural economy (even though the UK is or could be more or less self-
sufficient in food), less than one per cent of the population earn a living in farming; farm gate prices only
amount to less than one per cent of GDP and the total rental value of all UK farmland/buildings is less
than one per cent of the total rental value of urban/developed land and buildings.

Nevertheless everything is land-based, we use land for houses, roads, offices, shops, radio transmitter
masts etc. Some people live in house boats, but these still have to be moored somewhere, they still
need land/location, and all that separates them from the land is a few feet of water. We are just as
much a land-based economy as we ever were and always will be (until we all live in hot air balloons or
spaceships or something).

Furthermore Ricardo’s law of rent is still easily observable today. There are differentials between
average incomes (before housing costs) in different parts of the UK (or any other country for that
matter) but most or all of the differential goes into higher rents, even The Daily Mail reports this
regularly. A typical private sector worker (hairdresser, receptionist, bus driver, shop worker) can
increase his or her income before rent by (say) £5,000 moving from a low wage area to London, but will
end up paying £5,000 more in rent. So after housing costs (actual or notional), net household incomes
are pretty much the same everywhere in the country, I refer to another article in The Daily Mail which
reports exactly this effect.

Where are land values highest?

Where are land values highest?
So the analogy with farming is this: if the “yield” from a job in a low-yield area is £11, then the rent is £1,
and if the yield is £15 in a high-yield area, then the rent is £5, and true net wages after housing costs are
more or less the same everywhere. In a roundabout sort of way, Ricardo’s Law of Rent is exactly the
same as the estate agent’s mantra: “Location, location, location”. What is plainly observable is that as an
economy grows and becomes more productive – due to population increase, the adoption of new
technology, increasing complexity and greater division of labour etc – the difference in value between
the least and most desirable land grows too.
The countervailing force which prevents 100% of any growth in the economy going into higher rents is
that over time, people also have a higher expectation of what the basic minimum is; if they get less than
that they will not exactly starve, but they will revolt, strike, emigrate or turn to crime. So with the
farming example, if some new technique is invented which increases the yield of all fields by ten
percent, then wages (or the net profit of a self-employed worker) will creep up a bit, from £10 to £11,
but mathematically, rents will still take a slightly larger slice of the whole cake.

But “With the internet, locations are no longer so important” I hear you say

People sometimes show how little they understand by throwing this into the mix. The internet is merely
a great way of communicating, but you could have said the same thing when they invented writing and
the messenger boy or the carrier pigeon, or the telegraph, radio, telephone or fax. The differentials in
rental values between the city centre, the suburbs and farm land; between nice and grotty areas;
between high wage and low wage areas; between plots with restrictive and with less restrictive planning
permission will always be there.

And where do you find fledgling cutting edge tech start-up enterprises? Chiefly where its buzzing –
places like London, Berlin, Stockholm and San Francisco . The clustering of these energetic and exciting
new ventures in certain districts contributes to gentrification processes which are characterized by rising
rents.

Furthermore whatever you do over the internet, it still requires land to hold the cables (or the WiFi
transmitters), goods sold over eBay and Amazon still have to be manufactured somewhere and
delivered from warehouses somewhere to shops or homes somewhere else. We can safely assume that
the Internet increases our productive capacity and therefore the total rental value of UK land. Houses
with broadband sell or rent for more than houses with only sporadic 3G reception; and those sell or rent
for more than ones without either, or without even a telephone line. Conversely, rents on the High
Street might have fallen a bit because a lot of people shop online. But the rents for factories and
warehouses are unaffected.
At this stage, some will throw in a diagonal comparison and say: “But with LVT, a best-selling author
would be able to live in a remote croft, email his books to his publisher, and not pay any tax; he’ll pay
less tax than the printer with a printing shop in an urban area who prints his books.” Well yes of course,
but that’s his good fortune and a stupid comparison. Surely it is more relevant to compare a best-selling
author in a remote croft with one in a swanky mansion? Or compare a printer with a good site on the
high street (with lots of passing trade and extra customers) with one in a back street or out of town
industrial estate who has to spend more money on advertising and marketing?

Also please note…

The traditional system of taxing profits and transactions doesn’t really work with internet based
businesses. They can circumvent many of the old rules and concepts dictating what will be taxed in
which country, which gives them an unfair advantage over their competitors. So to level that particular
playing field, taxes on output and profits and so on have to be reduced for all businesses.

But internet businesses need land the same as anybody else. Amazon and other internet retailers have
their warehouses and delivery depots. Google, Facebook and Microsoft have massive offices, usually in
expensive central locations (Google will soon be relocating to the massive new development behind
Kings Cross Station). All their employees, directors and shareholders have to live somewhere. So the
more that business takes place over the internet, the more important is is to collect revenue from the
rental value of land instead of trying to collect taxes from turnover and profits in a most haphazard and
damaging fashion.