Tag Archives: uganda

Uganda’s economic growth alone is insufficient for poverty eradication

In May 1987, the National Resistance Movement (NRM) government under the leadership of President Museveni signed an agreement with the International Monetary Fund (IMF) for assistance. The government opted for the ‘shock therapy’ or extreme version of structural adjustment or Washington Consensus. The agreement called for the abandonment of employment policy in favor of disciplining inflation, promotion of economic growth and export-orientation, privatization of state corporations, retrenchment of public servants, and significant state withdrawal from the economy and virtual abandonment of social policy especially in education and health sectors.

Investments in infrastructure and the economy generally declined considerably. For example in 2008 budget allocation to agriculture, Uganda’s economic mainstay, declined from 4.2 percent in 2007 to 3.8 percent against African Union’s 1993 decision to allocate at least ten percent of national budget to the sector.

The government handed over responsibility for economic management to the invisible hand of market forces and laissez faire (let alone) capitalism as required under the neo-liberal economic ideology. A trickle down mechanism was expected to distribute the benefits of economic growth through employment creation in the private sector. As expected under the Washington Consensus the government focused on law and order by investing heavily in the armed forces, police and intelligence sectors to contain any resistance against the harmful effects of structural adjustment. To mobilize resources for this effort, the government had earlier imposed a 30 percent charge for converting old currency into the new notes against the advice of the IMF.

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Uganda’s diseases of poverty may worsen under the dev plan

The NRM government was unable to detect the diseases of poverty (jiggers, scabies, trachoma, cholera, under-nutrition, pneumonia, insanity and malaria etc) – which have embarrassed the development partners and damaged the image of the government (as it prepares for presidential and parliamentary elections in early 2011) that had presented Uganda as a success story in neo-liberal economic growth and poverty reduction – for the following principal reasons.

First, the government followed strictly foreign advice that focused on inflation control, economic growth and per capita GDP without paying attention to the equity aspects. The distribution of the benefits of economic growth by class and region was left entirely to the invisible hand of the market forces which would not be interfered with at all.

Second, the government focused on producing excellent blue prints such as the modernization of agriculture, poverty reduction action plan and universal primary education with the assistance of renowned development experts from around the world. These blue prints were received by the international community as a model of success story before they were even implemented. The government was satisfied with that assessment which boosted its international standing and did not bother with implementation as long as the donors and the media were happy with what they were marketing on behalf of the NRM government.

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Uganda’s development plan is a repeat of structural adjustment program

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.

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Population dimension in development planning

The population dimension has featured prominently in the reviews of Uganda’s five-year development plan which was launched on Monday April 19, 2010. In considering this issue let us remember that:

First, individuals and couples have a human right to determine freely the number of children they need, when to start having them and how to space them. This is in line with the 1994 Cairo conference on population and development and the recently concluded 43rd session of the UN commission on population and development. Authorities should provide information and facilities to enable individuals and couples full fill their rights voluntarily.

Second, according to Article II (iv) of the Convention on Genocide (1948), imposing measures intended to prevent births within the group [e.g. of poor people] constitutes an act of genocide.

Third, population growth in a country is largely a result of poverty and migration. Poor people as we have in Uganda tend to produce many children because mortality rate in that group is still high, poor parents depend on children in old age, and a subsistence economy requires more hands than a modern one. Children of poor people drop out of school early and get married in their teens and begin to produce children right away. Reducing poverty and keeping girls at school beyond primary education and empowering women reduce fertility rates without controversy.

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The impact of poverty and migration on Uganda’s population growth

Because the United Nations Commission on Population and Development has just concluded its 43rd session in New York (April 12-16, 2010) with Uganda delegation in attendance, this is the time to revisit Uganda’s demographic dynamics. According to the United Nations (2009) population estimates, Uganda’s population – using the median variant – grew from 5, 158,000 in 1950 to 33,797,000 in 2010. It is projected to reach 83,847, 000 in 2045 if no major changes take place.

At the national level, population growth is a function of births over deaths, and in-migrants over out-migrants. Therefore to understand Uganda’s population dynamics we need to disaggregate the contribution made by natural increase (births over deaths) and net migration (in-migrants over out-migrants). This disaggregation will help to understand better the causes of each component – why some social classes produce more than others, and why and where migrants come from. This disaggregated information will help authorities and their development partners to make informed and appropriate population policy decisions for each component.

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The trouble with NRM double standards

Since 1980 when the Uganda People’s Congress (UPC) won the general elections and the National Resistance Movement (NRM) began a guerrilla war in 1981 to unseat the UPC government by force since the Uganda People’s Movement (UPM) had failed to defeat UPC at the polls, I have followed NRM’s policy statements to the present day in 2010. NRM’s statements before 1986 are contained in two publications – Yoweri Museveni (1985), Selected Articles on the Uganda Resistance War; and Mission to Freedom (1990). I have had the opportunity to read the contents of the two publications.

NRM’s policy statements since 1986 are found in many publications or hard copies that have been distributed at conferences and summits. Since 1986, I have had the opportunity to attend major conferences and summits at the OAU/AU and United Nations in New York where these statements have been delivered by senior civil servants, Ambassadors, Ministers and the President.

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What can Uganda learn from Europe’s development experience?

Ugandans and their governments have attempted – since independence in 1962 – to transform their economies and societies to improve the quality of their lives, live in peace and security with one another and enjoy their human rights including the right to elect their representatives and hold them accountable. They have attempted development planning, ugandanization – by expelling foreigners – nationalization and privatization of the economy, have worked abroad and diversified exports to earn adequate foreign exchange to import technology and modernize the economy. On the political front they have attempted multi-party and no-party political systems with a view to finding a formula appropriate to Uganda’s diverse interests and past experience.

After nearly 50 years of experimentation, Ugandans are beginning to feel they have been riding on a wrong bus. They are at a crossroads wondering which turn to take as they enter the second decade of the 21st century. Against this background, it may be worthwhile to review Europe’s development experience and adopt lessons – if any –relevant to Uganda.

The development of Europe was driven by many factors including the emergence of the middle class and revolutions in agriculture, population, industry, commerce, transport, politics, scientific thinking and western values.

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The UK is proud of Uganda’s progress

The article in Uganda’s New Vision dated March 10, 2010 written by Baroness Kinnock, UK’s Minister of State for Africa is a balanced one. It has touched on areas where progress has been made and where more needs to be done. I wish to highlight a few areas – not for criticism – but to inform the public.

The historic economic relationship between the UK and Uganda has been marked by inequality in the sense that UK determined that Uganda would produce raw materials (cotton, coffee, tea and tobacco) in exchange for manufactured products. Winston Churchill and Fredrick Lugard decided that Uganda’s comparative advantage was in agricultural raw materials although at that time Uganda had a vibrant manufacturing sector and was not producing any of the export raw materials just mentioned above.

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Uganda – Washington Consensus Guinea Pig

The NRM government came to power in 1986 and inherited an economy that was in shambles. Uganda had an external debt of $1.2 billion, massive inflation that rose to 250 percent in 1987 and a GDP that was declining at 5.5 percent while money in circulation had increased by 90 percent. Uganda needed immediately $160 million for emergency relief and rehabilitation programs and $4 billion for rebuilding the shattered economy. The treasury was empty and the tax base almost non-existent. International support was therefore not only absolutely necessary but also needed very urgently. At the same time the government faced a very delicate security situation that needed top priority attention.

For eighteen months, NRM government avoided dealing with World Bank and IMF because it had criticized them for the harsh conditions they imposed on Uganda during Obote II regime. The government tried to bypass them and deal directly with bilateral donors to no avail. The British government representative who sounded the views of other major donors advised the government to enter into an agreement with the IMF first before donors could assist.

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From Economic Reform “Success Story” to “Failure Story” in Argentina

The purpose of this story is to know from those familiar with Uganda’s economic policy whether there are parallels with the situation in Argentina between 1990 and 2003. Like Argentina, NRM government adopted and implemented religiously the Washington Consensus conditionality with strong IMF backing from 1987 to 2009 when the Consensus was abandoned. This would help to have an idea about Uganda government’s plans to deal with the IMF following the launching in September 2009 of a new development plan along Keynesian model of state active intervention in the economy.

Countries like Argentina, Ghana and Uganda that followed the Washington Consensus conditionality religiously with strong external backing performed remarkably well initially. They were graded as ‘star pupils’ or ‘success stories’ to be emulated by others and their leaders were garlanded for their boldness and consistency through thick and thin. In the end they failed. As Uganda and Ghana cases have been covered already in my book titled Uganda’s Development Agenda in the 21st Century (2008) this story will focus on Argentina beginning with the government of Carlos Menem who was elected president at the end of 1989 and ending with the government of Nestor Kirchener who was elected president in 2003 and his initial thoughts on Argentina’s economic policies and external support.

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