The distinction between economic progress and improved standard of living

Economists and other commentators have difficulties drawing a distinction between economic growth, per capita income, economic progress and improvement in the general standard of living of the population. Many use these terms interchangeably. They think that when an economy is growing rapidly, everyone is enjoying the benefits of growth as rapidly. They think that controlling inflation will create favorable conditions for everyone to invest and reap profits. They think that increased and diversified exports will earn foreign exchange with which to import goods and services that will benefit everyone equally or equitably. In reality, the situation is different. Rapid economic growth doesn’t necessarily mean that everyone will benefit unless the trickle down mechanism works but it doesn’t.

Many visitors to Uganda since 1987 when NRM government adopted structural adjustment program (SAP) have reported economic progress in terms of economic growth, macroeconomic stability, privatization of public enterprises, downsizing the public service, reducing or eliminating subsidies and diversified exports and have given NRM government credit for this economic progress, urging other countries to emulate Uganda success. They used per capita income to demonstrate that the economy and people were doing very well. But per capita income doesn’t tell us how different regions and economic groups are faring. In economies like Uganda where income distribution is highly skewed, economic growth and per capita income leave a lot to be desired. During the 1990s, Uganda’s economy grew very fast reaching 11 percent in the mid’90s. However absolute poverty remained very high.

This distinction was underscored by James Gustav Speth, former Administrator of UNDP, when he observed that “Uganda is a leading example of an African country that is doing many of the right economic things to lift its people out of poverty. It has posted growth rates averaging 6% a year for a decade. Yet two-thirds of the population remain in absolute poverty, and per capita income is only now approaching the level it had attained in 1970” (Proceedings of the Development Cooperation Seminar 1998. Japan 1999). It hasn’t reached that level on the eve of Uganda’s 50th independence anniversary in 2012. In fact, structural adjustment program upon which the assessment of Uganda’s economic progress is based was abandoned in 2009 because it had failed to deliver as expected. Yet commentators continue to report economic progress in Uganda.

Stabilization and structural adjustment program failed because it was based on wrong premises. It was assumed that market forces and laissez faire policies in concert with trickledown economics would produce the desired results. Individuals were more or less left on their own instead of working in tandem with the state. The market forces or manipulated market forces based on willing seller and willing buyer of property have resulted in dispossessing many household of land the only asset and source of livelihood they have since the majority of Ugandans don’t have functional education and skills to work in sectors outside agriculture. A deregulated economic system has resulted in massive de-vegetation and exploitation of natural resources such as fish and timber that the future of Uganda has been seriously undermined. The get rich-quick mentality of leaders and individualism has brushed under the carpet the age old traditions of community cohesion and rational management of natural resources. Uganda is on the brink of turning into a desert which doesn’t appear to have bothered the NRM regime. Poverty, unemployment, hunger, disease and ignorance are undermining the country and generations to come.

NRM lack of long-term vision and focus on strengthening the military and torture chambers together with rampant corruption, sectarianism and cronyism as well as obstructing legitimate dissent is planting seeds of trouble in years ahead. You can’t have peace and stability in the absence of development that reduces poverty. As Kofi Annan former Secretary-General of the United Nations observed “In the world we live in, most of the countries now in conflict also turn out to be poor. They lack good governance; they do not provide the basic amenities for their people. And here I’m referring to education, good health, and clean water. Having these basic necessities, the right regulatory system – and a government that believes in establishing ‘an enabling environment’ – frees and releases the energies of the people to participate in economic and social activity, and prepare for their future. They will be too busy in these constructive areas to get engaged in the sort of wars or conflict that we’ve seen destroying so many of these countries” (Share International Jan-Feb 2000). In short development underpins peace and security which Uganda has missed. Anti-sectarian and anti-terrorist laws alone won’t bring peace in a swamp of poverty and youth unemployment.

As we begin the next fifty years of Uganda’s independence, let us all Ugandans reflect on why we have failed to realize the dream of independence; why we have spent more time fighting and grabbing what belongs to others; why we have continued to harbor notions of superiority and inferiority; why our 1962, 1967 and 1995 constitutions and institutions have failed to deliver the fruits of independence. We have to remember that together we stand and divided we fall as a nation, region or families.

What is likely to contribute significantly to the destruction of Uganda is the current breakneck speed of grabbing land from peasants by the rich or those wielding AK 47. Whoever is advising the president and the prime minister to dispossess Ugandans of their land needs to think again. Since time immemorial, land has contributed significantly to wars and revolutions as exemplified by the French, Russian, Mexican and Ethiopian revolutions. Wars of African decolonization were very fierce and bloody in areas of white occupied Africans’ land including in Algeria, Kenya, Namibia, South Africa and Zimbabwe. Uganda must learn from these experiences. It must be understood that Uganda government does not have land to dish out to developers. Land belongs to the people. The British colonial government understood this well in her – protectorate model – and stayed away from people’s land. Uganda has the potential to rebel: don’t ignite it.

Eric Kashambuzi


One Comment so far. Leave a comment below.
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