Balancing macroeconomic and social sectors in national development

Uganda like other developing countries adopted stabilization and structural adjustment (Washington Consensus) programs (SAPs) since the 1980s with a focus on export-oriented economic growth; fiscal discipline to balance the budget through inter alia retrenchment of public servants; inflation control through high interest rates that discouraged borrowing and reduced the quantity of money in circulation and economic liberalization that fostered competition and freed trade. The invisible hand of the market mechanism and individual entrepreneurship (laissez-faire) would drive economic growth while governments generally took a back seat. The human rights sectors of food security, education, healthcare, housing and work that form the foundation of nation building were starved of resources because they were considered non-productive in the short-run.

Studies have shown that the implementation of SAPs has had adverse consequences on the standard of living of many people especially in rural areas. The discouragement of labor-intensive small and medium-scale enterprises through high interest rates has contributed to a contraction of economic growth and consequently a rise in under and un-employment and a fall in wages aggravated by government spending cutbacks.

Basic infrastructure, institutions and social services have suffered severe deterioration due to underfunding and mismanagement. Liberalization measures have resulted in imports replacing domestically manufactured products and laying workers off.  The overall impact has been a reduction in economic growth, lowered income levels, diminished purchasing power, reduced access to basic human needs with severe consequences for the most vulnerable and disadvantaged groups such as poor women, children, orphans, the elderly and the disabled.

Rising hunger and under-nutrition, school drop out, early marriage and rapid population growth, youth crime and delinquency, alcoholism and domestic violence and males abandoning their families have occurred in the wake of structural adjustment and could become chronic if countermeasures are not taken quickly.
As the negative impact of SAPs escalated, criticism has mounted from many quarters including academic community, international and church organizations, civil societies and the media arguing that the short-term macroeconomic and growth-oriented model should be altered fundamentally in favor of basic needs, poverty alleviation and sustainable development – the pillars of long-term and sustained growth with equity.

The natural resources-based export growth model has resulted in massive de-vegetation with serious thermal and hydrological consequences that have contributed to slow economic growth. The international Labor Organization, for example, has contended that adjustment policies have contributed to increased unemployment and skewed income distribution with adverse effect on basic needs provisions in poor communities.

At its fortieth session in 1985, the United Nations General Assembly heard leaders from developing countries complain about poor human conditions arising from the implementation of structural adjustment programs. It was stressed that rising poverty, malnutrition and other behavioral changes such as increasing crime and violence might lead to social and political instability.

In 1987, the United States Congress passed legislation calling on the IMF and the World Bank to accord a higher priority to poverty alleviation within SAPs. However, subsequent changes by the IMF and the World Bank are believed to have been cosmetic with little impact.

Calls have been made for compensatory measures such as income transfers to the poor, job creation in private and public sectors, improved productivity through investments in education, vocational training and skills development as well as the availability and accessibility of credit, technical assistance and other forms of support to labor-intensive small and medium scale enterprises. Healthcare and other basic social infrastructure such as housing should receive commensurate support. In the interest of space, let us focus on what needs to be done in the critical areas of food and nutrition security, healthcare and education with a view to laying a strong foundation for long-term sustained economic growth with equity.

Regarding the right to food, the late President Senghor of Senegal remarked that ‘human rights begin with breakfast’ emphasizing that the right to food need to be secured very early in life. It is also important to stress that rights are mutually reinforcing such as nutrition, education and healthcare and should be implemented together to have a lasting impact.

To achieve the right to food for a healthy and active life the conditions of food availability, accessibility and affordability must be met. Governments should plan for food production, processing, storage and distribution from surplus to deficit areas and empower citizens to have the means to access all the food they need through employment or assistance when individuals are temporarily unemployed, or sick or unable to secure enough food for other reasons beyond their control.

Governments need to ensure that their countries achieve ‘food sovereignty’ to minimize risks when imports become unavailable for various reasons including diversion to feed livestock or to fill gas tanks and should limit food sales to surplus beyond household requirements.

Education is essential to the enhancement of human rights and standard of living. Governments should meet the requirements of availability, accessibility, acceptability and adaptability to ensure adequate ‘reading, writing and arithmetic’ in compulsory and free primary schools.

Schools must have sanitation facilities for both sexes, safe drinking water, qualified and well paid teachers and other facilities such as instructional materials and housing as appropriate to enable them do their work well. Schools should serve lunches to maintain high levels of attendance and academic performance. These arrangements would ensure that girls are not disadvantaged.

There are many cases of good pupils from low income families failing to continue secondary and tertiary education because they cannot afford school expenses. In these circumstances, governments should provide scholarships to cover all expenses.

Regarding the right to healthcare, governments should ensure that the system responds to national and local priorities and covers the needs of all – rich and poor. Governments must ensure equal access to preventive and curative health services, should take steps to ensure that third parties do not interfere through marketing and control of medicines and equipment. Passing legislation and strict enforcement would go a long way in this regard. Legislation should also ensure that privatization of the health sector does not occur at the expense of public health services.

Governments should facilitate the attainment of the right to health by designing and adopting a national health policy, ensuring provision of healthcare including immunization programs and ensuring that everyone has adequate access to the basic determinants of quality health such as nutritious and safe food, safe drinking water, basic sanitation and hygiene and adequate housing, adequate trained medical personnel, sufficient health centers equitably distributed throughout the country as well as advocacy facilities to discourage alcoholism, sexually transmitted diseases, domestic violence, use of drugs and other harmful substances especially among the youth.

Realigning development priorities between macroeconomic and social sectors along these recommendations would lay a strong foundation for and contribute to long-term economic growth with equity.