Three ideas that have failed in Uganda

Uganda is at a crossroads economically and politically. If we do not take the correct path, the country will under-develop rather than modernize. Three ideas namely comparative advantage, structural adjustment and the ballot box have been tried in Uganda. All three have failed to deliver the desired outcomes. We need to examine each one and recommend a way out.

Comparative advantage means that a country should produce the good (s) in which it has an advantage over others, trade with others and obtain what is not worth producing at home. When the British arrived in what later became Uganda, they found that the people were engaged in a wide range of economic activities according to their natural resources. Some were herders, fishers, crop cultivators, hunters and manufacturers of a wide range of products that included pottery, wooden, iron products and cloth from hides and skins and bark cloth. These producers exchanged (bartered) their goods in local and regional markets in Eastern and central Africa. Production and barter benefited equitably those involved. On balance, the terms of trade were favorable.

What has Uganda family planning skipped?

Since Museveni and his National Resistance Movement (NRM) government came to power in 1986, Ugandans have developed a habit of dragging the country into fads without proper analysis of pros and cons or even when they know these fads won’t work. Because Museveni likes to be in the news or popular with the west he has plunged Uganda into experiments in economics, agriculture, health, etc that have overall produced adverse outcomes. Uganda adopted shock therapy version of structural adjustment in 1987 fully aware that it had been rejected in Ghana because of negative consequences. Uganda adopted abstinence in the fight against HIV knowing fairly well that it would not work. Uganda also developed a confrontational regional policy in an atmosphere of geopolitics that has created poor relations with neighbors witness the plunder of Congo resources, meddling in Kenya’s 2007 elections and the latest allegation that Uganda troops were involved in Hutu genocide in DRC. Also Uganda elite have become obsessed with making money or keeping their jobs that many will fully support donor-driven projects or government programs even when they know they will hurt their fellow citizens.

How Uganda got into the socio-ecological mess and why it will continue

To solve a problem, one needs to fully understand its causes first. The current challenges in Uganda represent many years of wrong policies and priorities starting in 1971. For instance, Amin’s wrong policy of ‘economic war’ which called on Ugandans to use every piece of land to boost production led to serious environmental degradation, warmer local climates and spread of disease vectors like mosquitoes that spread malaria in areas that had previously been too cold for mosquito survival. When economic and social conditions continued to deteriorate, Amin government identified population ‘explosion’ as the number one problem to be addressed through birth control. The problems got worse and forced Amin to invade a neighboring country to divert attention from the mushrooming domestic anger.

When NRM government switched to structural adjustment from the ten-point program it made a wrong policy choice by sub-contracting Uganda’s economy to the private sector in an unregulated environment. Because private sector is concerned with profit maximization, it engages in activities, labor practices and selection of locations that minimize costs. The government made other mistakes of focusing on economic growth and per capita income leaving equitable aspects to the imperfections of a trickle down mechanism of market forces, encouraging export diversification into foodstuffs without first determining domestic requirements, dismissing or marginalizing experienced Ugandans to create room for NRM cadres most of whom did not have experience in negotiating agreements and contracts and monitoring program implementation. So how did adverse social and ecological outcomes come about?

Assessment of NRM record and the way forward

As preparations for 2011 elections enter the final phase, it is appropriate to examine NRM’s successes and shortcomings and make recommendations for the next government.

NRM government dropped the ten-point program in favor of stabilization and structural adjustment program (SAP) following an agreement with the IMF in 1987. Prior to the signing of the agreement, the government ran the economy without external support and faced tremendous problems including inflation which ran into triple digits. In this environment, the government had no bargaining power and swallowed all IMF and the World Bank conditionality including employing external staff and advisers to direct the design and monitor the implementation of SAP.

From the start it was known that the first three to five years of structural adjustment would be very costly in social terms as the government adjusted its resources to make savings and repay its debts which were the main objective of the program. The comforting rhetoric was that the costs would disappear and benefits of economic growth would trickle down equitably to all Ugandans. Meanwhile Ugandans were requested to tighten their belts even tighter having lost thirty percent of their savings through the conversion of the old into the new currency. It was also understood that the role of the state in the economy would be significantly reduced to permit unhindered operation of the private sector. Resource allocation would be determined by the invisible hand of the market forces. In short neo-laissez-faire would drive Uganda’s economy and distribute the benefits.