CONTENTS | ANB-BIA HOMEPAGE | WEEKLY NEWS
|
Uganda — Escaping the poverty trap |
STRUCT.ADJUST.
The International Monetary Fund has decided to take account of poor people’s
aspirations,
by transforming its usual prescription programme that involves
balancing the national budget,
into a newer and more user-friendly one
The government has been following the World Bank-imposed Enhanced Structural Adjustment Facility (ESAF) since 1987. There were promises that in following the programme laid down by the World Bank, Uganda would soon be better off. Ugandans, however, were unable to see the light at the end of the tunnel and with a great deal of grumbling, started to eat less. As one worthy citizen put it: «The last time Museveni said he would make us tighten our belts, by using banana fibres. Recently, he told us he will tighten our stomachs with chains!»
ESAF not a success
So what’s been happening? Thousands have been laid off from government jobs, and the miracle of opening up the economy to private investment, and thereby creating jobs, has remained a pipe-dream. The Uganda Investment Authority (UIA) says that since 1992, only 80,000 jobs have been created, yet the economy should be generating 250,000 jobs annually (according to the International Labour Organisation). The privatisation programme seems to have only brought in speculators, not real investors.
The International Monetary Fund (IMF) must have realised that its «prescription» for reforming the economy left a sour taste in many a Ugandan’s mouth. So, in November 1999, it had to act, admitting that its economic programme for Uganda had not delivered most Ugandans from the evils of poverty. Indeed, in a recent report, Shigemistu Sugisaki, the IMF‘s deputy Managing-Director admitted that «Uganda still ranks below many African countries in terms of welfare statistics». Truth to say, the situation is not very different from what it was before the Ugandan government took up the re’s no way of getting the crop to the factory.
The politician-businessman
A new culture of politician-businessmen has cropped up, comprising mainly senior officials of the ruling United Democratic Front (UDF) party, who are bent on acquiring as much land as possible for themselves at all costs. Similar oppressive practices are meted out to the tenant farmer in the tobacco industry. The landless continue to be marginalised, whereas the rich politicians are grabbing all available land.
There is presently a general slump in the tea industry. Adrian Whittle, director of the Tea Research Foundation, says that during 1998, tea prices at the auction floors slipped by nearly by US $0.60 per kilogramme compared to the same period (July-December) 1997. Tea exports to the UK. alone dropped from 5,085 tonnes to 4,535 tonnes during the same period.
Agriculture is the mainstay of the Malawi economy, and affects the welfare of over 80% of the population who derive their livelihood from it, directly or indirectly. In the rural areas, it’s mainly the smallholder farmers who are hit by poverty. Profits made, benefit primarily the larger farmers.
Land is of major concern for Malawi, a landlocked country. The fact is, the country’s arable land is already under cultivation. Maize is the staple food and occupies nearly 80% of the cultivated area. Export earnings accrue from three main crops — tobacco, tea and sugar. Hence, land owne to 25% and will focus mainly on primary health care. Each county will have a health clinic. (There are more than 500 counties in Uganda’s 49 districts).
The $36 million PRGF fund which the IMF has offered Uganda to battle poverty, will augment other measures already in place. In January this year, the IMF announced that it will offer a $2 billion debt relief to Uganda. This will reduce the level of Uganda’s debt servicing, by three-quarters.
Poverty Alleviation Programme
Uganda has been «rewarded» because it was the first country to draw up a Poverty Alleviation Programme. It should be noted that Museveni doesn’t approve of this name. «I don’t know why our friends the donors keep on referring to our programmes as poverty alleviation», he once joked. «They should be referred to as poverty uprooting». Uganda drew up its poverty action programme in 1997 aimed at improving sanitation, upgrading feeder roads, and making primary education accessible to everyone. This programme was approved by the donor organisations.
Individuals have taken practical steps to try to alleviate poverty. Let’s look at the example of Colonel Kasirye Gwanga, Mityana’s (pop: 1 million) District Commissioner. He says: «I encourage the people living in my area to grow enough food for themselves and as a source of income. They have responded to the challenge. The important thing now is to find people who are willing to buy the produce.» The Colonel has a point because in 1986, Uganda’s annual milk production stood at 198 million litres, but has now been boosted to 600 million litres annually. (Figures from the Uganda Ministry of Agriculture). But are there people willing to buy the milk?
Civil society
Non-Governmental Organisations (NGO)s have a vital role in assisting Uganda to escape from the poverty trap. They are known to be close to the people and understand their problems. Many NGOs, such as OXFAM, have been crucial in making certain that poor countries are relieved of their back-breaking debt burden. OXFAM has been leading the campaign in ensuring that developed countries offer more generous debt relief programmes to developing countries. There is a growing perception that any poverty reduction programme ignores the NGOs at its peril.
Unfortunately, there is a touchy relationship between the Ugandan government and the NGOs. The government is not always willing to invest huge sums in NGO-sponsored development programmes.
Peter Bourckaert (USA), led a five-week fact-finding mission on the human rights situation in Uganda for Human Rights Watch (HRW). He learnt of the government’s hostile attitude towards many NGOs, many of which are considered to be «security risks».
Yet, NGOs are essential in ensuring that funds are spent wisely. Money mysteriously gets lost in many instances, as for example in 1998, when $170 million was «lost» from government coffers. At worst, money is «diverted» to the Defence Ministry.
Western donors
Western donors have asked Uganda to stick to the agreed budget and to limit defense spending to around 2% of the Gross Domestic Product (GDP). This was in 1995, and for some time, Uganda’s commitment was strictly adhered to. But then came the war in Congo RDC and Uganda sent thousands of troops to that country to back up the rebels fighting to overthrow Kabila’s government. Defense spending rose to 2.8%, setting off alarm bells among donor organisations. The IMF was furious, and at the beginning of 1999, suspended $30 million from its allocation to Uganda until such time as the government understood the error of its ways. Other donors, especially The Netherlands and Denmark, also sent dire warnings to Uganda.
Donors are not interested in mere promises. They want to see some action, so this forced the Ugandan government into drafting a document detailing the creation of a Commitment Control System aimed at reporting, monitoring and enforcing government expenditure commitments. This System should already have been set in motion, but so far, there’s been no sign of it, and the IMF is not happy. «We are concerned about the delay in setting this System in motion», says Sugisaki.
But, maybe, if the donor organisations see there is an increase on spending for poverty-relief projects, they will be less nervous about defense spending!
ENGLISH CONTENTS | ANB-BIA HOMEPAGE | WEEKLY NEWS
PeaceLink 2000 - Reproduction authorised, with usual acknowledgement