In lieu of an abstract, here is a brief excerpt of the content:

Africa Today 49.1 (2002) 101-103



[Access article in PDF]
Bigsten, Arne, and Steve Kayizzi-Mugerwa. 2001. Is Uganda An Emerging Economy? Uppsala: Nordiska Afrikainstitutet. 105 pp.

This is one of six studies for the OECD/DAC project Emerging Africa, which seeks to identify the best practices in economic adjustment for replication by lower-achieving nations, so that African countries can “reach takeoff” by 2020. Authors Arne Bigsten and Steve Kayizzi-Mugerwa (here-after B/K-M) of the Development Economics Department at Goteberg University, Sweden, analyze the influence of economic policies on actual performance, in pursuit of macroeconomic stability and economic liberalization. The book is quite readable as macroeconomic treatises go.

An economy is defined as “emerging” if it is “in a process of sustainable per capita income growth.” There are five indicators of sustainability: efficient macroeconomic framework and international competitiveness; market economy domestically competitive; appropriate level of human resource development, infrastructure, and institutions; adequate governance; and reliance on domestic and foreign private inflows, rather than foreign aid.

Highlights of the review of Uganda’s postindependence economy include Idi Amin’s expulsion of Asians, the proliferation of parastatal firms, and the oil crisis that shot prices skyward and foreign aid downward. When better exchange rates finally promoted nontraditional exports, farmers—the mainstay of the economy—were hit with huge indirect taxes. Peace and the NRM’s Economic Recovery Program fostered concentration [End Page 101] on macroeconomic policy, generous flows of aid (with consequent debt), and low inflation rates, complemented by high levels of economic growth since the early 1990s.

The authors modify their generally neoliberal stance by identifying the conditions that accompanied aid as “excessive, especially on public sector expenditures,” as donors “took over” government functions, yet they believe that conditionalities help discipline the public sector. They assert that “Uganda’s debt policy was more or less dictated from abroad,” adding somewhat ominously: “the increasing emphasis on debt forgiveness may only be just part of an exit strategy.” In 1997, Uganda was the first country to enter the HIPC (Highly Indebted Poor Countries) program, which reduced debt service by $30 million annually over twenty-five years. Relief was limited, but HIPC and other initiatives can be expected to benefit Uganda’s poor through extension of services to the countryside, the authors claim.

“Integration into the world market” is a given for the authors, even though “free trade,” in the words of Susan George, is “largely the freedom of the fox in the henhouse.” 1 Many of my own interviews with seventy-four entrepreneurs, from informal sector to large scale business, bear out that comment. 2

Human capital development and health care are cited and praised as underlying the outstanding East Asian economic growth. Praising the Uganda government’s efforts to bring education out of two decades of deep crisis—caused in part by donor conditions that constrained government spending—the authors criticize its abiding regional and gender bias (1995 data). Health care, including the AIDS pandemic, is briefly discussed in the document, but maternal health care is viewed only in relation to infants, not mothers, and maternal mortality is ignored.

The authors favor privatization over public ownership, allowing that “The culture of transparency takes time to build” when citing a study that found political interference undermining privatization (this review is written amid major corporate scandals in the U.S.). A value-added tax (VAT) is favored as the least distortionary of taxes, even though it “might fall more heavily on the poorer end of the businesses than on the bigger and more influential ones.” Another social injustice (and constraint on local purchasing power) is stated without criticism: that labor union power was decimated when job opportunities declined, and employers “set wages pretty much as they like.”

Although it is Africa’s employment engine, expected to provide sixty to seventy percent of new jobs in the future, the informal economy is cited in the document just twice—once with reference to tax collection and once to rural credit—and neither reference has supportive comments. The authors do, however, call for a financial system that is “responsive...

pdf

Share