ARMY GENERAL’S ARREST RATCHETS UP TENSION AHEAD OF UGANDA POLL

The weekend arrest of General David Sejusa and his appearance before the court martial on Tuesday has raised concerns ahead of the 18th February poll, which it is believed will be the most hotly contested in more than three decades. Sejusa who is still on the army roll, was charged…

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POVERTY, THE ROOT OF ALL EVIL, BUT IT IS AVOIDABLE

Last week the heart rending tales of our youth, mostly women, being mistreated as domestic servants abroad got me thinking about these people’s motives for travelling to unknown destinations with nothing but their willingness to work and hope of improved income for their families to bank on.

This desperation means that they are vulnerable to scam artists and human traffickers who see them only as units of production to be flogged to extract their full value and discarded once their sale by date has expired.

It does not take stretch of imagination to see what drives our youth to such desperation.

It is in the statistics. According to World Bank figures we have a GDP per capita of $571. This figure is basically a division of the country’s economic output by the total population. One can already see the flaws in this measure.

For one it suggests that we all have equal access to the nation’s economic output, which we all know is not true. Differences in education level, application, skill marketability and negotiation prowess means there will always be disparities in how much of the pie one can capture for oneself.

Within reason the more money one earns the more they can keep for themselves as wealth. So the trick is to earn more and more, which you can convert in to wealth.

For starters there is a difference between earning and making money. The former being money paid to you for your labour – physical or mental and the second, coming from the unlocking of income from assets.

So on the one hand one can go and work hard climbing the corporate ladder until retirement or until they attain their level of incompetence, whichever comes fast or go into business for themselves.

Of course in Uganda we are familiar with a third route where people help themselves to public or company funds for their own private gain.

Another definition should be introduced at this point. 

"All wealthy people are rich but not all rich people are wealthy. The difference being that the wealthy have created mechanisms for making more and more money and if they lost everything today they would be fine, while the rich may not have that mechanism and no guarantee that if they fell on hard times they would be able to recreate their happier circumstances...

The corrupt are rich and not necessarily wealthy.

But sticking to the bona fide ways of raising in come increasing levels of education help for money earners but not necessarily for money makers. Money makers need to be able to sell, manage teams and build businesses, skills that are acquired through experience more than burning the midnight candle with your feet immersed in cold water.

One more set of definitions, to be poor is to be unable to meet your obligations, when you get a job you become financially independent, when you have money working for you enter into the realm of financial independence and onwards to richness and wealth.

It all starts with an income.

And given the two paths we have outlined you either go to school to get a better job and earn better or you look around yourself and look to unlock the assets there in.

For the income earners to become wealthy it would be useful to learn how to invest, essentially place the management of their money with other people --- the government or the private sector, in the hope of a better return. Better investment knowledge will ensure increasing efficiency in converting income into wealth.

Given that the majority of us do not have access to quality education the second path seems to be the more obvious route to break out of poverty.

That Uganda is gifted by nature is not just empty sloganeering. All around us we have natural endowments with some skill and organisation can be unlocked.

That we squander our endowment is shown in our statistics. Agriculture output accounts for less than three of every ten shillings in GDP generated. This would not be a bad thing in itself, in fact as the economy gets more sophisticated agriculture as a share of GDP is expected to fall. It is a scandal in our case because seven in ten Ugandans rely on agriculture for a livelihood.

It means that the majority of us, seating on our biggest asset are failing to unlock its value to improve our lot.

"Clearly our people are perishing for lack of knowledge. Knowledge not restricted to the substance between our ears but also collective knowledge of our society....

So it is obvious our various roles in eradicating poverty – the government devises the curriculum and supports education in both the public and private sector. And us on our part make learning an ongoing process long after we have graduated from primary, secondary or university, which learning we translate into practice, especially in unlocking our assets.

Maybe one final trait we can cultivate is delayed gratification.

To recognise that compounding or building on past gains, is the surest ways to poverty eradication and eventual wealth creation but can, and is, frustrated by us consuming our winnings too soon and therefore frustrating the process.

OF MODERN DAY SLAVERY AND NATIONAL FAILURE

Last week we read about the suffering plight of some of our workers abroad, specifically women. The stories were harrowing and footage circulating on the net was even more gruesome.

And of course our bureaucrats were falling all over themselves to stave off the PR disaster that these mostly ladies revealed about their experiences.

"How as a country did we come to the point that we are unable to employ our able bodied men and women, release them in to the wide world where they are seen as nothing more than units of production? Expendable units of production...

In the 1970s and 1980s we had mostly two kinds of immigrants --- political and economic. The former category had fallen foul of the powers that be and the latter just couldn’t make ends meet here. With political stability over the last three decades we have had more of the latter and less of the former.

In hindsight it looks like it was easier to sort out the politics of the country or at least stabilise it, than it has been to ensure that economic growth is translated into improved livelihood – development, for the wider society.

Official figures show that by some measures – GDP per capital has doubled to $571 from $258 in 1986 and that people living on less than a dollar a day have plummeted to about 20 percent from about thrice that figure in 1986.

They also show that the country’s Gini coefficient, which is a measure of income inequalities is at 0.43 the best in the region is Tanzania with 0.35. The Genii coefficient scale runs from 0 to 1, the closer the figure is to zero the less income inequality there exists in a country.

Essentially this supports the anecdotal evidence that a lot of the economic growth gains of the last three decades have been concentrated in a few hands and these are mostly in the urban areas.

"To address the income inequalities a combination of continued economic growth, increased investment, reduced corruption, improved labour law implementation and better education for a workers should do the trick...

We cannot get rid of poverty by throwing money at the poor --- although unemployment benefits can cushion the worst hit until they are back on their feet.

Which brings us full circle to our abused immigrant workers. We have let them down. Not only because we do not represent them effectively wherever they are in the far flung reaches of the world but because we have not created a local environment that would make going abroad to do menial jobs would not be their plan A.

On a purely humanitarian note if we better appreciated the numbers surrounding modern day slavery we would not be keen to have our citizens go abroad to forage for work.

Slavery encompasses everything from bonded labour (people working to pay off debt) to sex slavery to child labour to forced migrant labour.

It is estimated that this totally unregulated industry racks in $35b annually or almost double the size of the Ugandan economy.

These slaves do alot of the work the more developed citizens would rather not do out of dignity or because it pays way below their minimum wage levels. By definition these kind of workers work outside the official parameters and a run by illicit gangs for whom human trafficking and modern slavery are just one line of business in an illicit menu that may include drug running, arms dealing and smuggling.

"To hear the stories of the sub human treatment meted out to our fellow Ugandans is heart rending and tear jerking. That they are not a political priority is not because their numbers are relatively small compared to the general population but because and relatedly because once they leave for outside shores they have no one to bat for them at home.We  need to think about that! ...

THE FOURTH REVOLUTION AND WHAT IT MEANS FOR US

The Word Economic Forum closed at the weekend. The annual event held in Davos, Switzerland brings together the leading politicians, businessmen and intellectuals to discuss the world developments.

One of the themes this year was the Fourth Industrial revolution. In human history we have seen three eras that have seen human productivity achieving quantum leaps in technology and they seem to happen every 100 years.

From 1784 the harnessing of steam and water power to cause mechanical production was the first industrial revolution.  Division of labour, use of electricity and mass production starting in 1870 heralded the second industrial revolution. And then in 1969 with electronics, IT (Information Technologies) and automated production has brought us to where we are now.

Following on from our current circumstances thinkers see a world of “cyber physical systems” where not only will all our devices be connected but it is not inconceivable that we will be connected to our devices.

The possibilities are at once incredible and scary.

On the one hand imagine a situation where we would be able to tap much more easily than we do now,  into the data bases of the world, increasing collaboration and reducing the time between innovations. On the other hand there is the possibility of the creation of super smart robots, which raises apocalyptic visions of robots running amok and seek to exterminate the human race, a la Terminator.

"The key thing is that with greater access to information due to better connectivity, worldwide human productivity will increase and usher in the fourth industrial revolution...

About 30 years ago futuristic thinker Alvin Toffler talked about the evolution of power down human history. First it was the strongest man in the cave who was the leader. With the creation of money it soon became the man with the most money who led the society. Physical force is good for coercion but with money not only can you buy the means of coercion but you can actually induce behaviour to your liking by paying for it. And finally he said we were living in the third wave – with the first two trends being the first and second wave. In the third wave it is the man who can generate, store, process and disseminate data that will rule the world.

It is already happening. We talk of the wealth and income disparities in the world. Oxfam ahead of the Davos meet said one percent of the world’s population already control more wealth than the bottom half  combined. At the bottom of this material disparity is an even greater disparity in data generation, storage, processing and dissemination.

This disparity exemplified by the digital divide is what sustains the material inequalities.

However as we have seen with the mobile phone, this increasing connectivity if we adopt it with openness and foresight can help us leapfrog into the 21st century.

For example our challenge now is how we industrialise. People who should know argue that our best bet is to develop our agro based industries. However there are impediments to raising farm productivity, access to the cutting age biotechnologies, access to markets and even tapping into the billions of dollars in finance swirling around the world in search for a home.

Better communication will bring these things much closer to home for us than the Asians in the 1970s or the Europeans at the time of the agrarian revolution.

"With better communication being a landlocked country will not be death sentence as some old school economists have concluded...

But the rising up to this potential is not inevitable. We can miss the bus entirely by refusing to open our communications space to new technologies, drag our feet on rejigging our education system and generally failing to see that some concessions will have to be made now to see benefits well into the future.

Our post-independence governments made the error of stifling the private sector, frustrating capital growth and hoping in effect to distribute poverty. As a result the continent is lagging far behind the rest of the world on every measurable index.

We are on the cusp of a new era, where a break from the old thinking of carving out small spaces and defending the despite overwhelming evidence to the contrary, will make the difference between a better life for our people in the future or existing at sub-human levels , beaten down by poverty, disease and war.

We need to open ourselves to the consumption of these new technologies but also create the manpower to able to adopt these technologies to provide solutions to our own unique challenges.

UGANDA OPPOSITION CHALLENGING MUSEVENI NEEDS A RESET

A new poll, half way through the Uganda presidential campaign has provided cause for pause as the anticipated challenge to President Yoweri Museveni’s 30 year old stranglehold on power, seems to be running out of steam.
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HOW TO HANDLE THE WINDFALLS IN YOUR LIFE

You might have missed but the US is currently abuzz with news of a $1.5b (sh4,700b) lottery jackpot that was won last week. It turns out the money will be shared between three ticket holders in three different states – Tennessee, Florida and California.

History shows that these lottery winners often blow all the money they win, leaving them worse off than they were before the event. With such windfalls they go out and splurge on bigger houses, bigger cars, boats and so when the money runs out as it always does they find themselves deeper in the hole in trying to maintain their new lifestyle.

In the event that you land on the windfall of a life time what should you do.

1.       Adjust your thinking

Thankfully this is coming before your windfall. You need to adopt the attitude of the rich, which is that money is not for eating, it is for making more money. Just because you have a lot of money does not mean you will always have a lot of money, but by deliberate action you can not only stretch out your windfall but actually get to the point where it is working for you, throwing off more and more income into the future. One difference between the wealthy and the rest is that they consume less of their income than they invest, and the richer they get the less they consume in relation to their total income than they consume. To tell if you are a rich person or not when you get a windfall you will more likely think of all the good things you will buy and then once done will think of investing --- the truly wealthy think the other way around.

2.       Meet your tax obligations

Even if you win at the lottery the tax man’s obligations have to be met, however painful this is. Because even if you finish the money before they get to you they will hound you till you pay them, as they should. As it is now lottery earning attract a tax of at least 15 percent. Don’t try and be clever. As it is now if you buy any property of above Sh50m on transfer you will have to show how you got them money to buy and if you are not tax compliant they will slap you with a 30 percent tax on the cost of the property. So why not do away with the pain at the beginning, you might even pay less instead of suffering death to the taxman, by a thousand cuts!

3.       Park the money away

In case the windfall came out of the blue – like the three lottery winners in the US, park the money away. Either open a fixed deposit account (with that kind of money the banks will be falling over themselves to have you as a client) or buy government paper. This will not only allow you to start earning off your money but will also give you time to think or get sound advice on how to employ your monies.

4.       Don’t be a hero

We all like to have the ego satisfaction of saying that is my business, that you employ people, that your business makes money for you as you sleep. But business like every other worthwhile endeavour in life takes time to learn. Think of it this way, It does not mean because you have all the text books for P1 to P7 when you are in P1 that you know very thing. You have a head start yes but that’s all it is, you are going to have to bear down and learn the things in the books and that takes time. The worst thing that can happen to any businessman is to start off with a lot of money. Park the money and live off the interest and if your entrepreneurial itch persists use some of the interest to start experimenting on business, learning as you go. If you jump in with a lot of money you will soon find out that money is not the main ingredient in a successful business.

5.       Investing in yourself

Related to the above the smart thing to do is invest in yourself. And I am not talking about buying fancy clothes or fast cars or women, I am referring to learning. Buy a book, go to a seminar or pay a good advisor in the enterprise you may have set your sights on.  Inspirational speaker Robin Sharma says, “To earn more you must learn more.” He goes further to say, “To double your income you must triple your rate of learning.” The point is the difference between living happily ever after off your windfall or looking back on “the good old days” after falling back into destitution will depend on the content of your head.

Good luck to you!

WHAT WOULD HAPPEN IF WE DID NOT HAVE EXAMS?

There is an interesting illustration going around on the internet about the education system.

In the illustration a bird, monkey, penguin, elephant, fish in a fish bowl, seal and a dog are standing under a tree are lined up in front of a man seating behind a desk, who says,

“For a fair selection everyone has to take the same exam: please climb that tree.”

We need not have said more after that but under the illustration is a telling comment by Albert Einstein which goes, “Everybody is a genius but If you judge a fish on it’s ability to climb a tree it will live its whole life believing that its stupid.”

Einstein who in his later life was widely regarded as a genius could probably relate. As a child he never spoke until he was four, he was brilliant at maths but not much else and in his advanced studies he shunned science practicals for thought experiments. All his education life he was a square peg in a round hole.

This week PLE (Primary Leaving Exam) results were released with the usual fanfare. The results showed that whereas more pupils sat for the exams fewer pupils passed with division ones than last year. A simple analysis by the New Vision also showed that judging by percentage of division ones 19 of the top 20 districts in the country came from urban areas with the exception being Rubirizi district.

This disparities can be attributed mainly to greater private investment in schools in the urban than in the rural areas. These differences have far reaching repercussions into the future if as is well known education achievement is key ingredient in raising incomes.

But one wonders whether even the “bright” kids are really getting a head start in life.

Our educations system – despite all the best intentions, is geared towards testing the candidates’ ability to retain information, retentive memory, which is just one aspect of intelligence.

But one can see how this came about.

In a situation of scarce resources the exams are intended as an objective measure of separating those who are to go to the next level of education. For instance this year 600,868 kids sat for PLE but last year about 450,000 were admitted to secondary school a figure that may go up by a few thousand this year.

"So then the question, are we teaching our kids to become better more productive members of society? And if so are exams necessary? Or are we examining our kids because we cannot accommodate them all at higher levels so we need to find an “objective” way to sieve them?...

What would happen if we did not have exams? For many of us the knee jerk response is that we would have armies of kids getting out of school half-baked without a real grasp of the principles of their subjects. Is learning by rote the only way to learn the basic principles?

The truth is learning by rote is cheaper than learning by practical experience, where you learn the principles and employ them in practical situations. Science for example the amount of investment in labs and other props to teach science practically would swamp most schools and even the government.

Which probably explains why if parents can afford it they send their children to private schools (we tend to call them international schools here).

In a classic case of why the rich will get richer and the poor get poorer. These private schools while not neglecting retentive memory, place heavy emphasis on extra-curricular activities, which develop other facets of intelligence like musical, linguistic and interpersonal intelligence.

The real world is run by the people who beyond being intelligent or clever in the traditional sense and are able to build and sustain teams in pursuit of greater goals, people who have strong interpersonal intelligence. These teams may be businesses, political parties or charitable endeavours.

So while the poor continue to clamour for the four-in-four the rich have moved on training their kids to lead the poor “clever” kids in future.