Globalization and de-industrialization in Uganda

is not a poor country at all. It never has been. It is endowed with a wide
range of natural resources and resilient people. But Uganda is an impoverished
country with many impoverished people due in part to its incorporation into the
global economy as a dependent member. It is among some 50 countries in the
world that are categorized as least developed, meaning that the majority of the
people in these countries do not meet the basic needs of food, shelter,
clothing, health care and education.

has neither benefited from the globalization phase of the late 19th century (1870-1914) nor of the late 20th century (1970s to the
present). The main pillar of globalization is openness that promotes trade,
investment, financial and service flows across national borders.

to expectations, globalization has not benefited all countries or all people
within countries. There have been few winners and many losers. Uganda is among
countries that are losers and has many people that have lost a great deal.

colonial rule, Uganda produced abundant foodstuffs – crops, livestock and
fisheries—as well as wild game and fruits and vegetables – which provided a balanced
diet. Uganda also had developed a wide range of manufactured products using its
natural resources such as iron, cloth, wooden, salt, pottery and a variety of mats
and baskets. Surplus agricultural and manufactured products were traded in
local and regional markets in eastern and central Africa.

travelers, explorers and missionaries were impressed by the abundance and the
quality of Uganda people. Accordingly, Churchill named Uganda the “Pearl of

incorporation of Uganda into the globalized market after it became a protectorate
in 1894 changed all the economic activities and began the process of
de-industrialization and underdevelopment.

comparative advantage and laissez faire (let
alone) arrangements which marked the 1870 to 1914 phase of globalization,
Uganda was reduced to a producer and exporter of primary commodities with low
and fluctuating unit prices in exchange for manufactured products with high
unit and ever increasing prices, making the terms of trade unfavorable to
Uganda. Uganda had to produce more for the same unit of manufactured product. Uganda
industries were outcompeted and completely wiped out.

Uganda de-industrialized, it also became food insecure because more fertile
land and economically active labor were devoted to the production of raw
materials for British industries and food to feed rising British population. When
globalization came to an end in 1914 because of imperfections in free market
and laissez faire economics, de-industrialization
and food insecurity outcomes in Uganda had already initiated the process of

the Second World War, the British administration attempted to improve the
economic and living conditions in Uganda and to cater for rising labor force on
several fronts including industrialization and food security. Through a number
of measures such as the building of the hydroelectric dam at Jinja (the Detroit
of East Africa) to provide energy and the creation of Uganda Development
Corporation (UDC) to plan for economic transformation, a process of re-industrialization
of Uganda was launched. Many products in the mineral, agricultural and forestry
sectors were manufactured, jobs were created and incomes improved.

development of fisheries and establishment of nutrition clinics throughout the
country was initiated to provide an affordable source of protein for low income
families, and to treat undernourished people especially children and to train
mothers in hygiene and in the preparation and serving of balanced and safe
diets. Notwithstanding these efforts, Uganda’s economy and society remained
dependent, exporter of raw materials, poor and ill-fed.

the National Resistance Movement (NRM) government came to power in 1986, it was
justifiably determined to introduce fundamental changes in the economy and
society. It wanted to create an independent, self-reliant and self-sustaining
economy and a well-fed, healthy and active population. It produced a ten-point
program which was subsequently expanded to fifteen points as a basis for this
transformation – a program that received overwhelming support of Ugandans.

the implementation of this program using a mixed economy model (public and
private partnership) coincided with the new phase of globalization which had
begun in the late 1970s. The economic challenges at that time including
external debt called for the introduction of stabilization and structural
adjustment programs in particular the three basic and interdependent objectives
of promoting economic growth, reducing inflation and improving balance of
payments through increased and diversified exports in a liberalized,
deregulated and privatized atmosphere.

these circumstances, the NRM government abandoned its fifteen point program and
a model of mixed economy in favor of a globalization agenda popularly known as
the Washington Consensus which was comprehensively and quickly implemented.

current globalization phase like the one before it, has led to uneven
development. From the 1970s, the world economy has experienced a divergence in
levels of income between and within countries. The gap between rich and poor
countries and rich and poor within countries has widened.

Uganda, income distribution has become skewed in favor of a few – 20 percent in
the high income bracket own over 50 percent of national income whereas 40
percent in the low income bracket own a mere 15 percent of total income.
Poverty levels have remained unacceptably high with serious social and
environmental consequences.

from various and reliable sources indicate that some 30 percent of Ugandans go
hungry, over 33 percent are mentally sick in part because they are eating
unbalanced diets dominated by bananas, cassava and maize, 40 percent of
children under the age of five are undernourished, 12 percent of infants are
born underweight because their mothers are undernourished and up to 80 percent
of children are dropping out of primary school largely because they are hungry
– all these adverse developments are happening when Uganda is a major exporter
of food including fish which the colonial administration had developed
specifically to provide an affordable source of protein to low income families.

diseases such as trachoma which leads to blindness and environmental
degradation that may turn Uganda into a desert within 100 years constitute serious
development challenges indeed. If not
checked in time these developments can degenerate into social breakdown and
tensions that may spill into the political arena.

this background, a new development model is long overdue. When it is launched –
and hopefully soon – it must include manufacturing which transforms economic
structures, creates jobs and promotes equity.

noted already, in the period 1870 through 1914 countries such as Uganda that
had open economies experienced de-industrialization. Similarly countries such
as Uganda that have embraced open economies under globalization that began in
the 1970s have again experienced de-industrialization and the associated income
inequalities and high levels of poverty.

Uganda authorities are fully aware of the crucial role that manufacturing plays
in economic transformation, job creation and poverty reduction. All they need
to do is to muster courage and political will to act. No country in the world
has developed without protecting its industries against unfair competition. Let
us add that the Corn Laws from 1400s to 1846 in England were designed to stabilize
prices and to protect British agriculture against imports.

current global recession offers a unique opportunity to take bold steps to
introduce appropriate manufacturing policies to re-industrialize Uganda’s
economy with a clear strategic role for the state. Washington Consensus has
outlived its usefulness and is being abandoned in many countries around the
world. Uganda has no choice but to join
others. Postponing action will only make matters worse and nobody surely wants
that to happen.