Monthly Archives: October 2011

Lasting development comes from peoples own efforts

There is overwhelming evidence in time and space that countries that have developed or recovered quickly from devastation have relied heavily on their efforts – in some cases with additional external support. For instance, post-World War II quick recovery in Europe was more due to domestic institutions and capabilities that survived the war assisted by the Marshall Plan. Those that have relied heavily on outside advice and money – however well-intentioned – have not fared as expected witness Uganda since 1987.

NRM’s ten point program launched in 1986 received overwhelming support of Ugandans because it was homegrown. It covered issues that mattered most to Ugandans. Sadly, NRM dropped it in 1987 before implementation even began in favor of structural adjustment program (Washington Consensus) drawn up by outsiders.

I was among the first that protested to the highest level because I knew many in NRM close to the center of power. We argued that Ugandans know their history, their diversity and challenges and where they are located more than anyone else. Ipso facto, Ugandans should draw the roadmap and drive the process. We argued that experienced Ugandans in exile should be encouraged to return home and participate in the recovery and development process.

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To end impoverishment, Uganda needs a new leadership and economic agenda

Poverty – broadly defined – is a social problem that stifles the right to life, liberty and pursuit of happiness. Ugandans need to regain freedom from want, freedom from fear and freedom to live in dignity. Today, in 2011, except a few families, Ugandans are absolutely poor (in the sense that they cannot meet basic necessities of life). They are sick, getting insane and selling their children to make ends meet. They are undereducated, poorly fed, poorly sheltered, poorly clothed and unemployed.

Maternal mortality is rising and undernourished women are producing underweight children with permanent physical and mental disabilities thus undermining human capital formation. Maximum brain development is stifled because of poor diet during the first three years of life from conception. And Ugandans have the lowest life expectancy in the whole of East Africa, reflecting the lowest level of the standard of living.

Ugandans still use primitive implements such as hand hoes and machetes. They broadcast seed by hand, weed by hand, harvest by hand and grind the grain by hand as was done in medieval times.

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What causes population to increase or decrease?

Demographers – population specialists – have concluded that the total population of the whole world will reach 7 billion on October 30, 2011 and will continue to increase thereafter.

There has been confusion about why the global population is increasing. What is causing an increase is not a rise in fertility but a fall in mortality. In other words, mortality is falling faster than fertility.

There is worry that if the global population continues to grow sooner or later the demand for goods and services will exceed their supply, causing all sorts of problems including famines and war over scarce resources. The relatively easy solution is to stop or reduce drastically population increase. This can be achieved in two ways – increase mortality and/or reduce fertility. Since it is morally wrong to recommend mortality increase, the only alternative is fertility reduction to 2.1 children per couple.

At continental, regional or national levels population increase or decrease is due to the difference between fertility and mortality (natural increase or decrease) and the difference between in-migrants and out-migrants (positive or negative migration). For example, when fertility exceeds mortality and in-migrants exceed out-migrants the population will increase. On the other hand when fertility is lower than mortality and in-migrants are fewer than out-migrants the population will decrease.

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Uganda needs a new development path for security and prosperity

Ugandans need to take stock of what has gone wrong in the economic area since NRM came to power in 1986 and to decide what development path they need to take since the Washington Consensus (WC) which the NRM government adopted lock, stock and barrel in 1987 has failed to deliver as expected and was abandoned in 2009. No credible alternative model has been developed by NRM regime.

To craft an appropriate alternative to WC we need to understand its major characteristics. Washington Consensus replaced Uganda’s mixed economy model with laissez-faire capitalism and the invisible hand of market forces that served as the engine of economic growth. The role of the state in the economy was reduced significantly.

Trade and financial liberalization, privatization of public enterprises, export diversification, macroeconomic stability and balanced budgets formed the new development paradigm. The equitable distribution of economic growth benefits was to be effected through a trickle down mechanism. The state was primarily concerned with maintenance of law and order, enforcement of contracts and protection of property rights. Uganda pursued economic activities in which it has the so-called comparative advantage namely production and export of agricultural raw materials. By 2009 it was concluded that the model had not worked as expected as shown below:

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Post-NRM government will give greater weight to social protection

Sooner or later the NRM government will fall under the heavy weight of its incompetence, corruption, sectarianism and marginalization of capable citizens. NRM has no capacity for adjustment to the unfolding challenges.

NRM started off well with a mixed economy model combining aspects of neo-liberalism (laissez-faire capitalism) and neo-Keynesianism (demand management). This was a popular and pragmatic program that had been crafted by many Uganda stakeholders with different perspectives and ideologies.

Then in mid-1987 – suddenly and without public warning – came the Washington Consensus (WC) or structural adjustment program (SAP) that was imposed by the Bank and the Fund on a bankrupt government. WC stressed small state, private ownership of public enterprises, deregulation and liberalization, export diversification, balanced budget and primacy of the invisible hand of market forces – all to be implemented simultaneously. Sequencing was ruled out and NRM absorbed WC lock, stock and barrel. It was hoped that market forces would distribute equitably the benefits of rapid economic growth – itself a function of foreign direct investments – to all classes and regions and everyone would live happily thereafter.

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Message for NRM legislators (MPs) on East African cooperation

I have learned that one of the principal purposes of the just concluded Kyankwanzi week long seminar for NRM legislators was to discuss acceleration of the East African economic integration and political federation. I have written extensively on this subject and posted articles on Ugandans at Heart Forum and on www.kashambuzi.com. Therefore the message to NRM legislators will be brief.

As a majority party in parliament you have a special responsibility to promote, defend and protect the interests of Ugandans in whatever you do. Any negotiation must bring net gains to Uganda. The history of the East African cooperation appears to have yielded fewer benefits but more losses to Uganda. This must be avoided in the current and future negotiations. To prepare yourselves well you may need to look at what has happened or is happening in other parts of the world engaged in a similar exercise.

Regarding political federation MPs are urged to study why the following failures have occurred:

1. The Central African federation of Northern and Southern Rhodesia and Nyasaland;

2. The Yugoslavia federation;

3. The czechoslovakia federation

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IMF representative speaks on Uganda economy and EA integration

While addressing NRM members of parliament at Kyankwanzi National Leadership Institute, Dr. Thomas Richardson, senior IMF representative to Uganda observed that Uganda has one of the fastest growing economies in the world. Uganda’s future economic growth was recently lowered to about 5 percent because of the difficulties being experienced in the country.

Five percent growth rate falls far short of the 8-9 percent growth rates required as minimum to meet Millennium Development Goals (MDGs) by 2015. Countries like South Korea that transformed their economies and graduated to developed country status grew at 9 percent for many decades. Dr. Richardson observed correctly that agriculture has played a small part in Uganda’s economic growth. Given that some 90 percent of Ugandans earn their livelihood in agriculture, the sector should receive top priority attention.

The government with external support has focused on services and industry which are located mostly in the Kampala area and are capital-intensive, creating virtually no jobs. It’s no wonder that some 70 percent of Uganda’s GDP is generated in the Kampala area.

When we talk about industry we need to specify whether we are talking about manufacturing industries or industries in general like tourism industry. Uganda needs manufacturing industries to contribute to structural transformation and transition to a middle income nation.

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Why integration and federation are not easy projects

Regional integration and federation are not new concepts. However, they are not easy to realize because they involve heavy costs including psychological ones. The Central African federation of Northern and Southern Rhodesia and Nyasaland was unceremoniously abandoned after only ten years (1953 -63) because white settler Southern Rhodesia would benefit disproportionately. So the Africans in Northern Rhodesia and Nyasaland rejected the project.

In East Africa the idea of a federation was mooted in the 1950s but the three territories were not comfortable with it. When it came up after independence with strong support of Nyerere the federation project failed to take off in 1963 because Uganda did not get on board (Chidzero and Gauher 1986). The cost of federation is very high. The nation-state such as Uganda is likely to be obliterated. Regarding Europe, it has been observed “That new Europe will abolish what Europe has been. Diversity has been the essence of Europe, but the EU abolishes all diversity that matters… [with Europe becoming] a purely geographical expression”(Judd 2005).

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Yoweri Museveni, time to go gracefully

When you entered Kampala with your guerrilla fighters in January 1986 you brought a message of hope. It was contained in the ten-point program. When you addressed the OAU Summit in Addis Ababa and the United Nations General Assembly in New York City you conveyed a similar message of hope for your country, your continent and indeed the whole world. You presented yourself as a unique leader with a new and purposeful political economy message and direction. Your leadership was about change and movement towards improving the standard of living of all Ugandans who had suffered for so long. Your leadership was to metamorphose Uganda into a new and better entity and then move on to the Pan-African stage and perhaps the global platform. There was hope you would end up in the same class as Mandela and Nyerere.

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Uganda is thirsty & hungry for a new beginning

When a new road develops potholes in some sections after a period of intensive traffic use, a complete new surface may not be necessary if the potholes can be repaired in good time. However, as wear and tear takes its toll, large sections of the road become unsafe necessitating a new surface altogether on the entire section of the road. This resurfacing gives the road a new beginning that facilitates smooth, fast and yet safe driving.

Uganda received a new political surface in 1986 with the arrival of NRM system and its government because the political potholes were too many to fill up. The new political landscape permitted Ugandans in some sections of the country to engage in rapid economic growth and poverty reduction reaching a peak in the mid-1990s when the economic growth rate hit ten percent per annum.

Then the political landscape began to develop potholes beginning with signs of sectarianism, corruption and rigging of the 1996 presidential and parliamentary elections. Attempts were made to fill up these political potholes by dismissing and censuring some ministers. Others lost reelection contests. Commissions of inquiry were instituted and institutions were established to restore political order.

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