At the beginning of the 1980s the Tanzanian economy found itself in an acute crisis. The crisis was triggered by exogenous factors, such as deteriorating terms of trade and the war with Uganda. More important, however, is the fact that the crisis was also a logical consequence of the development strategy followed by the country after the 1967 Arusha Declaration. The latter laid down the principle of self-reliance as the path to be followed in the years to come. The country turned its back on the world market and embarked on a voyage characterized by stagnation, external and internal imbalances, commodity scarcity and deteriorating physical and social infrastructure.