Transforming Tanzanite: The Transnational Politics of Processing Promotion and Value Chain Control

Over the past two decades, low-income countries have increasingly turned to industrial policies to promote the structural transformation of their economies. The promotion of resource-processing industries has played a particularly important role in this development. In the face of fierce international competition from advanced industries, it is difficult to find room to promote domestic infant industries. In the case of resource processing, the governments of low-income countries assume that control of raw materials provides more leverage from which to launch industrial transformation. Thus, many resource-rich low-income countries have recently increasingly used restrictions on commodity exports to compel local processing. Importantly, however, little is known about the political dynamics that drive the promulgation and implementation of such policies. Who are the proponents and opponents of such policies in the value chain? And (how) do they influence the policy process to protect their interests? Addressing these questions can provide important insights to better understand the motivations, performance, and consequences of current policies to promote commodity processing. To this end, this study examines the promulgation and implementation of the Tanzanian government's 2010 export ban on uncut tanzanite gemstones aimed at developing a domestic lapidary industry. Based primarily on semi-structured interviews conducted during four months of fieldwork, it traces the process that led to the imposition of the ban and its subsequent (non-)implementation. It maps the interests and roles of various interest groups, including small and large-scale miners, local traders, policymakers, and foreign exporters, processors, and retailers. The analyses show that the actor-interest constellations are highly complex and deviate from expected patterns. They are strongly shaped by transnational political economies, with international non-state actors operating across three continents playing a significant role. They not only promoted the introduction of the ban, but also actively circumvented it in order to increase their control over the commodity and the sector, and ultimately to further their own international business ventures. Overall, the case study contributes to a better understanding of the often complex and transnational political dynamics that influence national and local industrial policies.