Neoliberal economic reforms in post-socialist Tanzania heightened racial as well as anti-foreign hostilities, while liberal political reforms made possible the expression of these antagonisms in electoral politics. Newly formed opposition parties mobilized popular support by advocating anti-Asian indigenization policies that questioned a key element of liberal democracy, the protection of minority rights. This prompted the ruling party, which had initially denounced advocates of indigenization as racist, to alter its position. In doing so, ruling party leaders redefined the meaning of indigenization, shifting the focus of the debate away from racial issues and Asian control of the economy toward issues of free trade, foreign investment, and foreign economic domination. By implementing indigenization measures targeting non-citizens and featuring anti-liberal economic policies, including tariff barriers, local content laws, and restrictions on property ownership, the government faced the danger of losing international support from foreign donors and international financial institutions. The trajectory of the indigenization debate reveals the role of electoral competition and party formation in shaping race relations and national identity in post-socialist Tanzania. It suggests the need for event-centered studies of the way in which political identities are constructed in processes of conflict within the institutional arenas created by liberal political reforms.