Monday, March 31, 2014

THE LAKE ALBERT DISASTER WAS NO ACCIDENT



Last weekend a boat capsized on Lake Albert killing more than a hundred people in the process.
Reports had it that the dead were mostly Congolese refugees who had fled fighting in eastern Congo last year, returning home.

The boat they had hired for the journey had a maximum capacity of the 50 passengers but thrice that number had crammed themselves into the rickety vessel head for the western banks of the lake.

As if that was not enough the passengers were not wearing life jackets which would have greatly minimised the fatalities out of this accident.

While we were still grappling the horror of decomposing bodies washing ashore from the accident Hillary Onek the disaster preparedness minister was reporting to parliament that Uganda had had to bury 19 bodies rejected by the Democratic Republic of Congo. Kinshasa refused to take possession of the bodies because it was taboo to bury the dead 72 hours after drowning.

"The lake, notorious for its sudden mood shifts has seen almost 500 people die from drowning since 1998. A consistent pattern has long been formed -- all these accidents are as a result of overloading of lake going crafts and none use of life jackets....

Even more disturbing is that these trips are not surreptitious endeavours, made under the cover of darkness, boat owners and passengers eager to keep it all hush-hush, but in fact the trips are embarked in broad daylight in full view of the authorities.

One would expect that lakeside communities would have a healthy respect for the lake and would be keen not to tempt fate by employing these clearly hazardous travelling methods. From afar we may deduce that a lack of infrastructure and abject poverty may have worked to supress these communities’ best instincts.

The Lake Albertine region is notoriously remote, with usable roads at a premium during the dry season and non-existent during the rainy sea with only constant means of accessing areas around the lake being by small makeshift boats.

Sadly we probably only hear of the accidents with huge death tolls, but it’s possible that hundreds more die but in numbers we seem willing to shrug off will casual indifference.

"One theory for why Africa lags behind the rest of the world in development is that there is an overabundance of resources all around. In the temperate lands where they have only one planting season in a year and the consequences of not having a good crop would lead to certain death during winter. These constraint meant they had to be better organised to manage the limitations partly explaining the development of reading, writing and mathematics. Every unit has value. In Africa not only are we wildly endowed with natural resources but also human life is an infinite resource replaceable with a quick grope and thrust in our darkened huts...

Could the abysmally low value we place on human life be explained thus?

Using the accidents on the lake as an example at a personal level there seems to be a total disregard for our own personal safety at a local and national leadership level this blasé attitude is scaled up to the point that we not only don’t provide the infrastructure – physical and soft to improve the welfare of our people, but even the little that is planned for these endeavours is stolen with such unbridled impunity as to be the rule rather than the exception.

The 108 people who died on the lake last weekend were 108 deaths too many.

An accident is defined variously as an unfortunate incident that happens unexpectedly and unintentionally, typically resulting in damage or injury or an event that happens by chance or that is without apparent or deliberate cause.

"This event was unfortunate but it did not happen unexpectedly or unintentionally or by chance and was not without deliberate cause. The disaster was intentional as if someone actually bored a hole in the boats floor and sent the passengers to a watery grave....

The question is what are we going to do about it, if anything?

Wednesday, March 26, 2014

“HOT” MONEY AND THE DISTORTIONS TO OUR ECONOMY



The mathematics was rudimentary.

So this big shot goes to Kololo and buys a plot of land for a million dollars, for ease of calculation let us say Sh2.5b. He builds a house on the land for another sh500m for the grand total investment of sh3b. He then seeks to rent the house and gets $3000 a month or $36,000 annually or about sh90m.
The return on his investment would be three percent. But in Kampala if he placed this money with a bank I could manage at least ten percent or sh300m a year.

What explains this gentleman or lady forgoing sh210m a year or almost sh20m a month?

Speaking at a recent dialogue on the recently passed Anti-Money Laundering bill and Anti-Corruption bill MP Nandala Mafabi could see only one reason.

“This individual is cleaning his ill-gotten wealth through an apparently legitimate business,” the MP said.

"We might cheer our connected friends when they buy us beers at the bar or invite us to their multi-billion shilling weddings or visit in their disneyesque palatial homes but the cumulative damage this “hot” money does to the economy is incalculable....

To begin with laundering of this hot money distorts the market.

Looking for land to buy how do you compete with a man who is willing to pay the asking price without bargaining? Or as a landlord who has taken a mortgage to build a commercial building how do you compete with a man content to take any rent because for him whatever income he gets is all profit? Or as business man how do you compete with a man who is willing to depress prices regardless of whether he is making a loss or not?

"What happens then is that legitimate businessmen fall by the way side and when the money launderers are done cleaning their stolen money they move on living the industry oftentimes irreparably crippled...

But even worse is that once you have had a taste for illicit funds the taste never really leaves you. Why should you have to wake up every morning to go to work or to man your business day after day when with a sleight of hand you can divert a few millions here and there to your private use?
This not only deprives the economy of useful minds but also creates a lot false idols to look up to and “career” paths to emulate.

As if things are not bad enough these same networks used to clean money do not discriminate between the clients who patronise them lending the same services to drug dealers, prostitution rings and other organised crime syndicates. Before not too long your pious looking, bible-thumping-on-Sunday public officials is in up to his eyeballs, fraternising with the kinds he wouldn’t allow his mother to know are his friends.

And it gets worse.

For some of us mere mortals we imagine that if we were in the same “privileged” position  we would take just enough to meet our expenses, finish our “site” and maybe throw in a holiday or two for the family and of course the latest SUV in the bond or make that off the assembly line.

But the amount our officials are shovelling into their trucks (pickups are too small to carry away the loot) is jaw dropping. With these colossal amounts come the challenge of how to deploy the cash.
The story is told of the fumigator who was taken – gagged, blindfolded and bound to a house whose garage was piled up to the ceiling with currency notes. His job was to spray the notes against vermin and pests.

Sometimes the money is too much and this economy is too small to invest in without making eye brows disappear into receding hairlines, so they find a way to send the money out of the country. In effect linking up with other networks abroad.

"Before not long our government officials start making startling decisions – dishing out land, selling off companies and offering questionable concessions to dubious characters. Very soon you will have a state captured by these nefarious networks, allowing gangsters to roam our streets at will and do as they please....

It is not inconceivable.

In Montenegro, to get around western imposed sanctions on the former Yugoslavia in the 1990s, they leased ports and airports to cigarette smugglers. With a foot in the door these gangs have never gone away trafficking in addition to cigarettes, in women and narcotics.

Organised crime induced corruption was so bad that Italy had a warrant out on the head of former Prime minister Milo Djukanovic for his role in smuggling cigarettes.

Observers wonder who will implement the Anti-Money Laundering bill when we are knee deep in the problem, but I guess a start is better than nothing at all.


Tuesday, March 25, 2014

THE TRUTH IS, THERE IS NO HOPE FOR AFRICA!



Last week President Yoweri Museveni addressed the African Union parliament at the event to commemorate a decade of its existence.

Museveni spoke on why Africa despite its rich endowment in people and natural resources continues to not only lag behind the rest of the world but also struggles to pull itself out of this endless spiral of poverty and “helplessness”.

Imagine a home with parents and kids. Top of the mind of the parents is to guarantee the long term sustainability of this family unit. They do this by guaranteeing physical security, which may take the form of a sturdy house and good security fence. They also work towards “soft” security by ensuring the family is fed, healthy and is growing in economic value through furthering education and work/business experience.

Whether this family succeeds will be judged years even generations down the line. We will be judged by our fruits against a criteria of whether we have advanced the human specie.

Imagine now that this family will not be left alone to chart its own path into the future. Outsiders are always looking in, coveting the family’s resources, not only property but he parents’ source of living, the children for all sorts of labour.

The covetous outsiders decide that in order to get access to the family’s endowments they need to weaken it at worst and break it up totally at best.

They use any number of ruses to achieve this – bribery, temptations of the flesh, alcohol and drugs and sometimes do away with the subtlety and use outright brute force to take what they want.

"For the family to weather all these storms and still prosper into the future it needs to maintain a common purpose anchored by a long term view of their ambitions for the “family name”....

What makes this struggle particularly difficult is that the dangers may not show themselves from onset, they are masked in good intentions and maybe promoted by the most trusted members of the family out of ignorance or treachery.

Scale this scenario up a million fold and you are talking about Africa.

Museveni is right when he says we are our own worst enemy in this fight, slanted against us by historical factors and weak technology.

Sadly our governments are often at the forefront of selling the continent down the river, just as the tribal chiefs of yesteryear did for a few trinkets and guns. The more things change the more things remain the same.

Zimbabwe is a classic case in point. The leadership there may huff and puff all they want how they are at the forefront of black empowerment but in hanging in on to power at all costs they weakened the economy to the point that only foreign currencies are respected in the former southern Africa food basket.

"When a government relinquishes control over the national currency, its ability to direct the economy is lost and its claims to be working in the service of its people are empty...

How did Zimbabwe come to this.

When politicians feel threatened by the productive sections of the economy, attack and bring them down in order to assert their authority, it’s only a matter of time before that county will be overran by interests other than those with an interest in the long term viability of the nation. We saw it in Uganda with the expulsion of the Asians in 1971.

But an attack on the productive sectors of the society need not be a physical one.

Hobbling them with high production costs due to poor infrastructure and cumbersome red tape can do just as thorough a job.

Uganda will be sold Рis being sold down, the river by corruption, clich̩d as it may sound.
Corruption defined as employing public resources for personal enrichment is chipping away at the walls of our home, dribbling in through the tiles on the roofs and the bashing determinedly at front door.

The figure of sh500b lost a year is gross understatement of the true state of affairs.

The natural instinct is that when you have been attacked in your house and in danger of being overwhelmed by your assailants,  is to make an alarm for outsiders to come to your aid.

In the last week I have been reading the book,Treasure Islands: Tax Havens and the Men who Stole the World” by Nicholas Shaxson, it traces the rise of the off shore financial industry and fingers it as the reason for the recent global financial collapse.

This industry which, facilitates the evasion of trillions of dollars in tax, launders hundreds of billions of dollars could only do so if it had control of the political processes of the west.

"Driven by corporate greed, the industry and its agents score the earth for profit, co-opting governments or getting rid of them altogether. Its appetite grows exponentially every year and despite western citizens' protests against them and the institution of some token regulation on their activities, they are not only alive and kicking, but thriving and expanding...

Which brings us full circle to Africa, what hope do we have with such forces ranged against our family?