News about Uganda is very depressing and has damaged our national pride, reminiscent of Amin’s days when Uganda was defined as a failed state with a dictatorial regime as now. Wrongdoing cannot be hidden any more thanks to advanced technology. Images of sleeping government leaders and advisers when the president was presenting the State of the Nation address (and it happened last year) have raised questions as to whether that is the best team he can find among 34 million Ugandans. Many Ugandans are convinced beyond any shadow of doubt that Uganda is in a political, economic, social, moral and environmental crisis, no matter what NRM government officials and friends abroad may say. That is not the team that will pull Uganda out of its endemic difficulties including unemployment, poverty and environmental decay. This is the moment when we ought to collectively put our heads together and find a lasting solution. Leaders who ignore the views of others and insist on governing by divine right cause harm to themselves and their nations as history has taught us.
In societies where major changes have taken place, there were individuals or groups who took risks and challenged the status quo that was out of date. The Polish priest and astronomer Copernicus and the Italian and astronomer Galileo changed history when they proved that the earth was not as previously believed the center of the solar system. Martin Luther’s 95 theses changed the course of religion. Priest Abbe Sieyes who belonged to the privileged First Estate in France took a different stand and defended the interests of commoners in the Third Estate during the French Revolution. Deng Xiaoping, a moderate within the Chinese communist party, disagreed with the Cultural Revolution and Maoist economic policies and embarked on an economic revolution in 1978 that made China what it is today. Narasimha Rao, India’s prime minister broke with Congress Party’s economic ideology and embarked on economic restructuring in 1991 that made India what we are seeing today. The point being made here is that in society some visionary citizens go against the status quo in order to change the course of history for the better. That is what UDU is trying to do to make life better for all Ugandans. We are therefore challenging the status quo in Uganda by intellectual and peaceful means. We need your support.
Up to 1970, Uganda had a relatively good economic and social record. Uganda was ahead of Kenya and Tanzania in many areas of human endeavor, now it is at the bottom. Makerere was the “Harvard” of Sub-Saharan Africa, now it is graded as a community college. Mulago hospital was an outstanding teaching and referral hospital, now it is a place sick people are running away from because some wards are considered hospices. Churchill christened Uganda as the “Pearl of Africa” because of its vegetation, abundant domestic and wild animal population, vast water bodies and a pleasant weather, now all that has virtually vanished replaced by desertification conditions as reported by a UN specialized agency recently.
As a Christian country, Uganda had high moral standards enshrined in community cohesion and caring for the vulnerable members of society and doing things in moderation. Leaders in the church and administration served as role models for the young and parents cared about the future of their children. Now Uganda is known for excessive alcohol consumption and reckless driving; human torture, sacrifice and trafficking; grabbing weak people’s land; underpaying workers and treating others like house workers more or less like slaves; engaging in rampant corruption, sectarianism and mismanagement of public funds without shame. Individualism is increasingly becoming order of the day and the spirit of patriotism is fading fast as we chase material wealth and pursue a desire to stay in power indefinitely.
When NRM came to power in 1986, it was fully aware of these challenges witness the content of its ten-point program. Museveni’s speeches and interviews confirmed that he was fully aware of the problems. Sadly, by May 1987, NRM had lost its way although it had enough information about the shortcomings of the tough (shock therapy version of) stabilization and structural adjustment especially the adverse impact on social sectors of education, healthcare and food security. It was fully aware of alternatives to the shock therapy version. For example, an independent team of advisers sponsored by the Canadian International Development Research Centre recommended a pragmatic program of economic reform that contained a hybrid of stabilization, adjustment and strategic state intervention in the economy. NRM government was also aware of the political, economic and social troubles Chile, Ghana and Senegal had experienced and steps that had been taken including changes at ministerial and senior civil servants levels.
To recap, the whole idea of stabilization and structural adjustment was to iron out macroeconomic imperfections in the domestic arena through austerity measures (slashing government expenditure, controlling credit through high interest rates, cutting fiscal and current account deficits). Macroeconomic stability would attract domestic and foreign investments, stimulate a supply response that would drive economic growth, export diversification, job creation and poverty reduction through a trickle down mechanism and resource generation for the development of physical and human infrastructure leading to self-correcting and self-sustaining economic growth and equity without state intervention.
Government made it clear that in the initial stages austerity programs would cause hardship and Ugandans were warned about it. But it was also emphasized that that would be a short term (under five years) suffering and it was worth it for the better of present and future generations. It was likened to working hard at school including sacrificing social activities in order to get a good degree and a well paying job after graduation. That was the argument that went on until December 1989 when a seminar was held for parliamentarians and other stakeholders to endorse structural adjustment as Uganda’s development model which NRM had vigorously opposed under Obote II regime.
Structural adjustment began in earnest in 1990. Museveni termed it a second phase of the revolution – from short term rehabilitation to long-term economic restructuring. The strategy would focus on export diversification, inflation control, exchange rate alignment and balancing the budget. The country experienced rapid economic growth reaching ten percent per annum in mid-1990s which has steadily fallen since then to 3.2 percent recorded for 2011/2012 financial year against a population growth of 3.5 percent due to a combination of natural causes and immigration. Thus the economy isn’t in good shape, calling for a major reorientation in terms of new priority areas and a different model from the current one that has continued to follow monetarism of inflation control and high interest rates that discourage borrowing especially by small and medium enterprises that create jobs and sustain economic growth.
In 1997, a World Bank representative observed that “assessing the impact of adjustment on poverty is more difficult, given the paucity of reliable data. Nevertheless, available data indicates that hard core poverty has been reduced as economic growth has accelerated”. He concluded that “while lifting Uganda out of poverty is an enormous challenge, Uganda’s performance in the 1990s suggests that the country can meet this challenge” (Report of Consultative Group for Uganda. Paris November 21-22 1996).
Reports of the impact of economic growth on poverty have varied considerably. Government reported that between 1992 and 2000 poverty had declined from 56 percent to 35 percent and later to 31 percent (S. Malaby 2004 & HDR 2010). However, another source reported that rapid economic growth averaging 6 percent per annum was not accompanied by a commensurate decline in poverty which stood at two thirds (66 percent) during the decade (1998 Development Cooperation Seminar. Japan 1999). Perhaps convinced that poverty was not declining, the government has not been giving figures on the level of poverty in major statements. A gallop poll issued a report recently that 81 percent of the population reported they were poorer because of the current economic recession.
While it is clear that the reforms did not work and structural adjustment program was officially abandoned in 2009, the government has continued to implement the elements of the failed program. In the president’s budget speech for the financial year 2012/13 delivered by the minister of finance, the government will continue to implement strict fiscal and monetary policy to maintain macroeconomic stability including inflation in single digit. Tackling inflation remains government’s overriding macroeconomic objective in order to protect macroeconomic stability”, the minister said. She announced that the macroeconomic objectives of the government are:
1. Achieve a growth rate of at least 7% in the medium term (which is less than the 8-9 percent required as minimum to meet the Millennium Development Goals by 2015 including reducing poverty and hunger in half);
2. Return to single digit inflation rates;
3. Improve Uganda’s balance of payments by reducing the current account.
These government objectives are similar to those announced at the 1989 seminar and in the president’s speech on January 26, 1990. The government representative at the seminar stated: “the two most important variables in the Uganda economy are the government budget deficit and the official exchange rate. The two most important economic achievements we must aim for in pushing economic recovery are the defeat of inflation and boosting exports. And the two measures which are the minimum necessary to achieve these are balanced budget and a realistic exchange rate”(Uganda Government Seminar on the Economy since 1986, 1990). Note that in all these statements there is no mention of poverty reduction. So, what we have in 2012 is a repeat of the failed policies that were launched after the 1989 seminar. It is the same stabilization and structural adjustment program that was officially abandoned in 2009 for failure to deliver as expected and replaced by the Five Year National Development Plan (NDP) which has been gathering dust in the planning department as the prime minister reported recently. Ugandans therefore should not expect much out of this government program. At best things will stay the same. At worst, they will deteriorate.
When a country experiences economic and social difficulties for some years as Uganda has the head of state and/or government makes major institutional and staff changes so that a new team with different ideas is brought in. In Chile Pinochet changed the entire team of “Chicago” economists who were the architects of the economic reform that caused two major recessions in the 1970s and early 1980s. The new team of economists and a new minister of finance made considerable adjustments and increased the strategic role of the state. The economy has since the mid-1980s made steady progress and poverty has come down. In 1987 when the president of Senegal faced national opposition characterized by student boycotts, school closures, strikes and labor union opposition because of hardship caused by the austerity program, he let go of the two key technocrats that had drawn up the program. The new team made some changes and reversed some of the decisions (Ngaire Woods 2006). In fact, when Museveni decided to drop the ten point program and adopt stabilization and structural adjustment in 1987, he removed the minister of finance and governor of the central bank among others and merged the ministries of finance, planning and economic development.
With the technocrats who designed and have been implementing the same structural adjustment program and are still in the ministry of finance and central bank changes will not happen because that is all that they know. Changes will happen only when a new team has been appointed to replace the current one in national interest. The priorities of agriculture and industry that the president announced in his State of the Nation address will not be implemented by technocrats that have been focusing on the service sector in the Kampala area that generates some 70 percent of Gross National Income (GNI). This might explain why the president complained about conflicts regarding resource allocation and that people reject his ideas. But who is more powerful in Uganda than Museveni?
UDU has made President Museveni’s work easy to take decisions. We have prepared a National Recovery Plan (NRP) along the lines contained in his address to parliament. UDU is in favor of supporting the 68 percent subsistence farmers that have been neglected yet have vast potential for growth and job creation. We also support small and medium scale enterprises that are labor intensive (create jobs) and promote sustained economic growth. Our Plan was based on public and private partnership in a mutually reinforcing manner unlike the current program that is build on monetarism mainly concerned with inflation control regardless of what happens to unemployment. Uganda needs a strategy that strikes a balance between concerns for jobs and low inflation, not one over the other. The government should invest in physical and social infrastructure which is badly needed and create jobs which are badly needed as well and ease the suffering. Keeping many young people unemployed for a long time is potentially dangerous, regardless of the strength of security forces which could choose to join their suffering brothers and sisters as happened in Russia and France. Unemployment and food shortages triggered the French and Russian Revolutions in 1789 and 1917. And women played a big role. And the women of Uganda know it because they have been reading my articles and works of others. And conditions are similar in Uganda. UDU has a program that might help out in this impasse. For easy reference the Plan is accessible at www.udugandans.org. It has an executive summary for those who don’t have time to read the entire text initially.
UDU stands ready to work with NRM in a new framework because we believe that all Ugandans must pool their resources because two heads are better than one. We have capable staff. That is the olive branch we are extending to the government. If that doesn’t work out we shall of course continue to point out weaknesses in the NRM government policies and report on changes in human and environmental conditions. We hope that others working outside NRM will join with us for maximum effect. Uganda belongs to all of us in or out of government. So let us forget politics and come together for a national cause. The ball is in Uganda’s State House.
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