21 April 2010

Uganda: Nation's Development Plan Begs Some Questions

The NRM government has just launched a development plan which is a fundamental departure from the Washington Consensus or stabilisation and structural adjustment programme (SAP) that was launched in 1987 and has been praised by the government and donors, state and non-state actors alike, as a "success story" in macroeconomic stability, rapid economic growth, privatisation of the economy, diversification of exports, streamlining public service and reducing poverty etc.

Uganda became the darling of the west (which occasionally gave more money than the government had requested) and an example of economic development to be emulated by other developing countries wishing to transform their economies and societies.

Until now, the government has been publishing statistics showing rosy achievements and projections that promised better days ahead with endorsement by some multilateral financial institutions like the International Monetary Fund.

The launching of the development plan and the use of the term "new plan", giving an impression that it is replacing an "old plan" (which did not actually exist), at this critical juncture raises the following initial questions that need to be answered.

First, instead of a whole new development ideology embodied in the development plan, why did the government not make substantial changes and retain the current programme?

Secondly, why did the government choose to launch the plan at the start of the presidential and parliamentary elections to be held in a year's time? Will the plan be any different from the NRM campaign manifesto?

Third, why would a government that has been reporting excellent performance in the country's economy and society under the ideology of laissez faire capitalism and the invisible hand of market forces suddenly switch to a fundamentally different Keynesian ideology of demand (economic) management and state intervention?

Fourth, to what extent and for how long have Ugandans, especially peasants who are the main target of the plan, been involved in the design of the plan?

Fifth, to what extent have development partners, who contribute about 30% to Uganda's budget, been involved in drawing up the plan and endorsing the new departure?

Sixth, to what extent will government institutions and staffing be restructured to take on the new task efficiently and effectively? At the start of the structural adjustment programme in 1987, there were some major ministerial and personnel changes in the Ministry of Finance and Central Bank.

Seventh, specifically what will be the role of the Ministry of Finance and Central Bank that had been empowered under the Washington Consensus to manage Uganda's economy, virtually independent of line ministries, and in effect independently of the state?

Eighth, will Planning and Economic Development become a separate ministry with new powers to determine development priorities for which the Ministry of Finance will then mobilise resources?

Ninth, there is a consensus that new investments in social, institutional and infrastructural sectors will be undertaken in the short, medium and long term to ease unemployment, education, health, energy, rural roads and human capacity bottlenecks.

How will this increased investment and therefore more money in the economy be reconciled with demands for macroeconomic stability, namely controlling inflation? In other words, how much and for how long will the government allow a shift in macroeconomic stability?

Tenth, what will the role of Parliament be?

Government response to these concerns would be highly appreciated.

The author is a Senior Policy Advisor on the United Nations Millennium Project.

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