In Uganda things have changed in the political, economic, social and environmental areas since NRM came to power in 1986. The leaders whether under pressure or voluntarily genuinely changed their opinion to match the changes that had taken place in Uganda and at the global level. In 1987 they abandoned the ten point development model and replaced it with a fundamentally different model of structural adjustment which came into force in May 1987. In 2009, structural adjustment model was declared dead. In line with the global economic wind of change, NRM government announced it had changed its opinion and abandoned structural adjustment and replaced it with Five Year National Development Plan (NDP). But there was no fundamental change in content. The core elements of structural adjustment remained intact – macroeconomic stability and limited state intervention in Uganda’s economy. This was a tactical change to hoodwink Ugandans ahead of 2011 presidential and parliamentary elections. So, one can fairly conclude that since 1987 while things have changed considerably government opinion and practice have remained virtually intact. Is it possible for NRM to change its opinion commensurate with the changes that have taken place since 1987? It is unlikely and this is why, beginning with the president.
This article has been written in response to popular demand. The mid-1970s marked the end of the global economic golden age since the end of World War II which was dominated by state intervention primarily to reduce unemployment and maintain a reasonable level of inflation. The government raised enough revenue to cover welfare expenses.
From the mid-1970s the global economy experienced slow growth, high unemployment and rising inflation (stagflation). The oil crises of 1973/4 and 1979 made matters worse leading to a recession in the early 1980s. Instead of applying fiscal and monetary policies such as raising taxes or cutting expenditure which are politically sensitive, governments resorted to borrowing made easy by abundant petro-dollars at low but flexible interest rates or simply printed more money causing high inflation and external debts.
By early 1980s many countries had accumulated so much debt that they could not service. Private lenders pulled back and demanded repayment of the debts. In order to control inflation, interest rates were raised making it even more difficult to borrow on the international markets. Third World countries resorted to borrowing from the International Monetary Fund (IMF) and the World Bank to repay the debts. IMF and the Bank would provide assistance with conditions attached designed to address domestic economic distortions considered to be the main cause of the problem.
There is increasing political, economic, social and ecological evidence that Uganda is heading for a deadly collision between the rulers and the ruled. It appears that Uganda leaders and development partners have not learned from Uganda’s history since the 1960s.
The second half of the 1960s was characterized by a serious political and constitutional crisis that paved the way for the 1970 military coup that brought Amin to power. Amin destroyed the country demographically (over three hundred thousand dead), professionally, economically and socially hoping that he would silence dissent and rule for life. He even invaded a neighboring country to consolidate support at home. Amin’s atrocities resulted in a war with Tanzania and Uganda rebels that left many parts of the country devastated.
The 1980 general elections were won by Uganda Peoples’ Congress (UPC) led by Obote and certified legitimate by international observers (based on ‘prevailing circumstances’). The verdict was rejected by opposition parties. A few groups unhappy with the democratic process took to the bush and waged a very destructive five-year guerrilla war forcing a section of the national army to topple the government in July 1985 which was six months later removed from power by guerrillas led by Museveni.
First and foremost, Museveni is president of Uganda to advance his own interests. In true democratic sense Museveni is not popular because of corruption and sectarianism as can be deduced from elite and peasant comments. He has used a combination of security forces, impoverishing Ugandans and collaborating with western powers in structural adjustment and anti-terrorism – areas that are not popular in the Horn and Great Lakes regions – to stay in power.
When structural adjustment ran out of steam in Ghana, the experiment was transferred to Uganda in 1987. Museveni adopted the extreme version (shock therapy) of structural adjustment favored by western sponsors the implementation of which required an authoritarian leader who would not tolerate riots. Museveni was also needed in great lakes geopolitics that resulted in changing governments in Rwanda in 1994 and in Zaire in 1997.
In return Museveni was saved from early multi-party politics which were imposed on others, allowed to strangle pre-independence Uganda Peoples’ Congress (UPC) and Democratic Party (DP), received huge amounts of money and training for his security forces and consolidated military, economic and political power in his hands. He threatened Ugandans that he would go back to the bush and cause another hell if not elected president in 1996. Most development partners did not raise a finger when all these things were happening because they did not want to upset a reliable ally.
President Museveni articulated his vision of the five-year development plan in the foreword to the plan. With due respect, he just restated the objectives of the Washington Consensus or structural adjustment program (SAP) which Uganda has been implementing since an agreement was signed between the NRM government and the International Monetary Fund (IMF) in May 1987. The program was dropped in September 2009 because it had failed to deliver as expected.
On Monday April 19, 2010 President Museveni launched Uganda’s five-year development plan. During the ceremony, he stated that at the beginning of his administration in 1986, NRM had plans to introduce a development plan but it was told that planning was out of date. Instead NRM was told to control inflation, ensure macro stability and leave the rest to the private sector. He did not specify who gave this advice.
When NRM came to power, it soon realized that unless it entered into an agreement with the International Monetary Fund (IMF) first, external funding would be withheld. For almost a year and a half, the government debated various options of engagement with the IMF under Washington Consensus or stabilization and structural adjustment conditions. The debates chaired or attended by the president were dominated by two schools of thought represented by the Ministry of Finance, and the Ministry of Planning and Economic Development. The Ministry of Finance and possibly Central Bank opted for a gradual and sequenced approach to minimize the costs of adjustment drawing lessons from Obote II government’s experience with structural adjustment began in 1981. The Ministry of Planning and Economic Development supported a ‘shock therapy’ alternative that required implementation of all adjustment conditions at once. Finally, the President endorsed the shock therapy alternative.
Because of the tremendous suffering during the two World Wars and the interwar economic and social hardship, world leaders decided – when they adopted the Charter of the United Nations in 1945, the Universal Declaration of Human Rights in 1948 and subsequent instruments including the binding Covenants on economic, social and cultural rights, and political and civil rights in 1966 – to introduce safeguards against violation of human rights like the right to work, earn a remunerative wage in a decent environment, access adequate and balanced food, healthcare, quality education for all and equitable sharing of the benefits of economic growth etc.
From 1945 to 1975, the world enjoyed a period of relative peace and security and the golden economic environment resulted in the overall improvement in peoples’ welfare. In Africa and other developing countries, the benefits of peace and economic growth manifested themselves in falling death rates and rapid population growth.
Studies conducted by the World Bank in the 1980s and 1990s concluded that Africa was not doing well economically and socially largely because of distortions in the domestic domain. In its 1994 report entitled Adjustment in Africa: Reforms, Results, and the road ahead, the Bank noted that although there was no single explanation for Africa’s poor performance, economic decline was due in large part to poor domestic policies at macroeconomic and sector levels. The distortions were compressed into state intervention in production and economic regulation; overvalued exchange rates; large and prolonged budget deficits that undermined macroeconomic stability needed for long-term growth; protectionist trade policies and government monopolies through nationalized enterprises and financial institutions that reduced competition vital for increasing productivity; and a bias against exports especially of agricultural produce through heavy taxation.
The Bank recommended a new development paradigm (structural adjustment) to correct these policy distortions. It called for the state to be limited to the provision of basic services and a stable policy environment; promotion of exports with a focus on agriculture; promotion of private sector; maintenance of macroeconomic stability; and avoidance of overvalued exchange rates.