Poverty Cycle: a cycle often created by a 
developing country that needs to invest to develop. So they invest, but they have low incomes, therefore, they have low investment levels leading to even lower incomes.
TANZANIA: HDI: 0.530, Literacy rate: 69.4, water supply access: less than 40% rural and 70% urban population, GDP (purchasing power parity): $29.62 billion , GDP per capita: $800, HIV/AIDS: about 1.5 million people, Population below poverty line 36% , Inflation rate 5.9%, external debt: $4.61 billion.
Although many facts and figures do not show Tanzania in extreme poverty, still most of the population lives in poverty, particularly in rural areas. There are efforts from the government to reduce policy levels but many have failed for numerous reasons.
Institutional and Political factors: the basic institutional framework and political structure for the country. If these basics are poor, they could cause an ineffective taxation structure, lack of property rights, political instability, corruption, unequal distribution of income, formal and informal markets, and lack of infrastructure.
TANZANIA: In the early 1990s the economy looked hopeful with rigorous economic reforms, however, because of corruption in the political structure the economy took a very negative turn.
Tanzania first gained its independence in the 1960s, so it is still developing as a country. The political stucture is still adjusting, and meanwhile it shows attempts of helping the economy grow. However, there are other problems the government must face including the poverty, the clean water supply, medical and public health access, and education. Additionally there has also been problems of corruption or failure in the political framework that has posed major setback for Tanzania.
International Trade Barriers: this factor is based on a country’s reliance on other countries and trade. International trade may lead to a developing country’s overdependence on primary products for exports, as it likely leads the developing country to export more products in return for less imported products. Also considering elasticity and terms of trade, developing countries often export with each other rather than developing countries. Additionally these barriers can cause a lower value for the country’s currency. From a narrow range of exports, consequences may include overproduction, failure to get all producers to join, storage of some commodities is difficult, and floor prices are too high and encourage overproduction. There are also issues of protectionism, which is often practices by developing countries to protect the domestic economy.
TANZANIA: no restrictions on exports and foreign exchange controls. major trading partners: Japan, India, European Union, Germany, Zambia, Netherlands, Kenya, China. Major trade product: Tanzanian coffee
International trade barriers do not seem to be a large barrier of growth for Tanzania. They have a popular product as well as trade partners willing to trade.
International Financial Barriers: these barriers often include net capital inflows reduced, net outflows of money, total debt increased, debt-export ratio increased, debt to GDP ratio increased, debt-service ratio increased. Also as loans are taken out to help this debt, they sometimes only create more. With more loans and time, then more interest added over time, the country only increases its debt in the long-run. This barrier may lead to changes in a country’s exchange rate and capital flight.
TANZANIA: external debt: $4.61 billion, inflation rate (consumer prices): 5.9%
International financial barriers do seem to exist for Tanzania, hurting its domestic economy. This may possibly be another setback along with the political structure, because it prevents Tanzania from reducing major problems within the country.
Social and Cultural factors: these factors are basically religion, culture/tradition, and gender issues.
TANZANIA: Official Language: Swahili (mostly all ethnic groups have own tribal language). Religions: Muslim, Christian, (also Animalistic, Jainism, Hinduism, Roman Catholic ). Although there is “freedom of religion” in Tanzania, there are often religious conflicts that may go to the extent of affecting schools and businesses.
Overall, Tanzania’s social and cultural factors do seem to pose some bit of a barrier for the economy. They all speak a common language, which is very convienent for a growing economy. However, there are different ethnic groups with different religions and these sometimes cause conflicts that could greatly affect the economy.
Probably the major barriers for Tanzania are the Political and Institutional factors, poverty cycle, and perhaps the international financial barriers. The most significant, I feel, is the institutional and political factors because these seem fairly weak and if they were stronger the government would be more organized at running the country enforcing actions that will help the current problems at hand, such as the poverty cycle. The factor of international financial barriers should be of a lesser concern in my opinion. Although it is a nightmare that will not really go away, until Tanzania is strong enough as a country and an economy nothing in this area is likely to be resolved in the close future.
