NRM government must tackle youth unemployment
Rising youth unemployment including university graduates and the associated poverty and hunger are approaching dangerous and potentially explosive proportions. It is now clear that market forces and the invisible hand that have guided Uganda’s economy since 1987 are unable to generate enough jobs.
The Great Depression of the 1930s which was marked by massive unemployment, poverty and food insecurity contributed to the Second World War with deadly human consequences. John Maynard Keynes, the British economist, realized that in times of economic distress fiscal policy – government increased spending – should be used as a tool to manage the economy.
Until the Great Depression, the assumption had been that the economy was self-regulated and the invisible hand of the market forces left to its own devices would automatically raise economic output and employment to optimal levels. Keynes who disagreed with this approach argued that during times of economic distress, the drop in aggregate demand for goods and services could cause further economic contraction and raise unemployment which the invisible hand could not handle. He suggested that it was government responsibility to kick-start the economy by borrowing and spending on public infrastructure projects – roads, schools, hospitals etc – so that the funds spent would raise economic growth, create jobs and reduce unemployment.