Friday, September 14, 2012

Uganda's 50 years of independence

 In Uganda's pre-colonial era, land was communally owned and everyone worked together to produce a good harvest for the family and community; however, the colonial state, which was inherited at independence, was designed to serve the interest of its owners. The establishment of British rule in Uganda came with a typical colonial economic exploitation strategy to make money for the British empire. It grabbed the best land without any consultation. Many young men ran away from forced labour in the north only to end up as forced labourers in plantations in central Uganda. To reinforce the efficiency of an exploitative economic system, the colonial government imported Indian workers to build the Uganda Railway. With the railway done, these coolies, as they were known, took to farming, growing cotton, tea, coffee and sugar, supported by cheap labour from Rwanda, Burundi and northern and north western Uganda.

In 1986, Yoweri Museveni took over power with young, energetic, ambitious graduates, who had left college to join the guerillas and found themselves ministers only within five years. The new team, driven mainly by liberation war slogans and ideals, soon had to grapple with tough political and economic challenges, including a collapsed economy, empty shops, food shortages and silent industries following many years of conflict and the economic war of Idi Amin.

The new leaders attempted to introduce medieval-times trade regimes such as barter trade into a modern international trade arena largely controlled by institutions such as the World Bank and International Monetary Fund. But while this registered a few successes, such as importing government vehicles in exchange for coffee, it was simply too complicated a system in the context of contemporary international finance and trade regimes.

Within three years, the "revolutionaries" started waking up to the realities of global geopolitics and international trade and finance which had set up shop in Uganda with their true might. Trying to appease these forces would result in the return of confiscated property to the Asians who left in 1972; liberalization and privatization of government parastatals; a tight fiscal and monetary policy discipline and deregulation of investment processes to make them more attractive to foreign direct investments, amongst others.

The "revolutionaries" stooped to accept these rules of the game – urgently liberalising and privatising the Uganda economy. This policy was also exciting for the new team which also saw in privatization the opportunity to acquire personal wealth.

Among the results of the policy included major privatization of social services such as education, health and electricity supply, which simply increased their costs to unacceptable levels for the average citizen; liberalising the economy through the deregulation policy that made it easier for foreign direct investments to flow into Uganda with tax exemptions; closing the ministry of cooperatives, selling off all disposable property of the cooperative unions without consulting shareholders; adopting a new land policy that makes it very difficult for landlords to evict squatters, weakening their ability to create investments using their land, yet at the same time encouraging the commercialization of land ownership.

The beneficiaries of these policies remain small but very powerful groups – the politically connected elite.

Taken from here

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