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The title of this report is inspired by the great Danish author Hans Christian Andersen who in the children's tale "Den Grimme Elling" ("The ugly duckling") tells the story of a particularly ugly duckling. She is so ugly, in fact, that she is despised and disliked by all the other ducks and ducklings. After a long and painful period of time, however, she grows up-but not to become an ugly duck. Instead she becomes a beautiful white swan, admired by all. The major question tackled in this report is whether a similar fate is awaiting Tanzania. Having been something of an enfant terrible since the deep crisis in the early 1980's, economic progress since 1995 provides some hope that the duckling period in Tanzania is finally over.