TO BATTLE CORRUPTION, PAY UP

THE Inspector General of Government, Raphael Baku, this week released the annual report on corruption in Uganda.
I have not read the entire report but there was nothing to raise any eyebrows.

Infact, it was rather understated in cementing the perception that corruption is alive and kicking. On 94.8 fm’s Talk of the Nation this week, the issue of teacher absenteeism came up.

I heard how dedication to the vocation was lacking and teachers these days do not appreciate the huge responsibility they bear. The suggestion was that they don’t make teachers like they used to.

And then again on Press Chat on the same 94.8 fm, Richard Baguma narrated a heartbreaking but hilarious story of how in his earlier days as a public servant he went to the bank to check whether his salary had made his account.

"The teller took one look at his account balance and, writing it down on a slip of paper, said his salary had not made the bank yet. It had, but it was so little as not to register with the lady behind the counter....

Earlier this year I saw a list of salaries for various levels of civil servants and at first thought the civil service pay was not so bad after all, until someone pointed out the figures published referred to annual salaries.

I believe that corruption is thriving because we do not pay our public servants enough. They may be other reasons but they are all secondary.

Abraham Maslow’s hierarchy of needs is a useful framework from which to analyse human motivation. Basically, his theory suggests that human motivation is dictated by the pressing needs of a person.

At the bottom of the hierarchy are the basic physiological needs of food, water and breathing, climbing up to safety needs – family, health and housing, and on to belonging needs to esteem needs – achievement, respect, confidence to the ultimate, the self actualised person where issues of morality, creativity and lack of prejudice reside.

The theory says that if you do not fulfill the needs at one level it is difficult to rise to the next level and even if you do, chances are you will always regress to the lower level to resolve the needs unattended to at that level. It is impossible to belabor this point.

"As long as the Government continues to pretend to pay, people will continue to pretend to work while devising other means to meet their basic needs. It is blindingly obvious....

The lowly paid civil servant lives in Nakasero, Bugolobi and Ntinda, is building in Namugongo and Buwate and is unstintingly loyal racking up five, ten, 15 years in the civil service.

This would be an illusion if they were conjuring this lifestyle out of their payslips.

In arguing against corruption, some sanctimonious people argue that if you signed up to work for that pay you should honour your contract or get out.

And I suggest to them that if the Government is unwilling to up the pay and yet wants to plug the leakages maybe they should hire monks, who are sworn to poverty and celibacy....

But of course government planners, being civil servants, know all this.

The argument that there are no resources to improve civil service pay, fly in the face of the fact we are willing to shell out sh500b-plus to host CHOGM, a four-day event, which has had little residual benefit to the majority of the population.

The high profile figures we see getting billion shilling kick backs are the tip of the iceberg. The incessant gnawing away at public resources by lesser cadres pilfering a few thousand shillings from the office imprest, soliciting a bribe here and there to conveniently look away when the law is being broken, is where the real havoc is being wrecked.

There are the rare, blameless individual, but we can not organise society on the strength of a few outliers.

This in no way justifies corruption. If we are serious about fighting corruption let’s pay our civil workers the minimum to survive through the month and then, the fight against corruption will truly have begun.

THE MYTH OF OUR POVERTY

The World Bank last week released a report which showed that remittances from Ugandans abroad may come in at about $ 773m (sh2 trillion) this year. This is up from $694m last year.

To put this in perspective. Uganda’s national budget stands at just under sh8 trillion, that means Ugandans abroad are remitting the equivalent of a quarter of the national budget to fund school fees, health expenses, building construction and general consumption.

Also this figure is about the same amount of money the government is expecting from foreign governments in loans and grants to balance the budget.

Two things to note, the World Bank acknowledges that this is understated as their statistics are derived from official records. So all the dollars that come stuffed in toys and clothes, through local couriers go largely unregistered.

A recent Central Bank survey on the issue showed that remittances through alternative means were about half the amount of those through the formal financial system.

And secondly, that this figure has been growing over the years, more than quadrupling from 1996’s $175m, shrugging off the recent global economic slowdown. At this rate Ugandans will double there remittances every seven years.

It is estimated that there are about 757,000 Ugandans living abroad, given this year’s statistics this suggests that on average each Ugandan abroad sends home just over $1,000 a year.

As indicated earlier, this money comes piecemeal and according to official statistics peaks in the last quarter of every year. This money goes largely towards consumption.

On the continent Nigeria is the top remittance receiver at $10b but elsewhere India, Israel and Phillipines are up there.

All indications point to the expectation that Kyeyo money will increase year on year as long as a stable macro-economic policy environment is maintained in this country.

Seeing as we shall be getting increasing amounts of these monies in coming years the question is how can we make maximum use of these funds beyond improving individual homesteads’ welfare?

For starters we need to aggregate this money. A few dollars here a few dollars there can’t make countrywide differences.

Ghana in 2008 launched the Golden Jubilee Savings Bond, which raised less than the intended target and most of it from Ghanaians at home. The funds from the bond were intended for infrastructural development. The Philipines is also planning there own bond issue.

Say that we were able to rope in a tenth of this year’s remittances about sh200b what could this money do if deployed in bursaries, low income housing or agricultural credit?

Somebody was telling me that following a geo-aerial survey to determine our natural resource potential, it was discovered we are seating on so much mineral deposits that were we to exploit it, it would mean relocating the whole population of Uganda.

I also learnt that of all the money in circulation about 60% of it is outside the formal financial system.

An increase in branch networks and proliferation of Savings & Credit Cooperatives (SACCOs) should go someway to mopping up all this excess liquidity.

Again you want as much money as you can in the financial system so it can be deployed to support trade and production.

Given also that about sh300b annually gets pilfered by our grubby fingered officials – except in 2007 when sh500b went on CHOGM alone, there is more than enough money available to relieve our donor dependency.

It may come as a surprise to you, but we are not a poor country. In fact it is a fallacy --. A misleading notion, an erroneous belief, a myth.

What we lack is the leadership to harness our local resources. It is much easier to go begging bowl in hand to donors than it is to set up the system to collect our little monies. But that is short term thinking which is hurting us now and will continue to hurt us over the long time if we do not snap out of it.

THE RICH WILL GET RICHER

I am currently engrossed in the book “World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability” by Amy Chua.

The idea that by spreading capitalism and democracy, the world will be a better place to live in does not hold up to scrutiny when viewed against the background of the last 20 years since the fall of communism as symbolised by the fall of the Berlin Wall.

In fact the opposite seems to be true with increased incidents of poverty, ethnic divisions sharpening and in many places there are determined efforts to roll back the free economy and fledgling attempts at democratic practice.

In reading the book I see interesting parallels with the developments of the last 24 years in Uganda – the rise of economically dominant ethnic minorities, widening income disparities and rising tribal tensions

Capitalism by harnessing individual initiative is undoubtedly the most efficient way of growing wealth, how in a true free market inevitably the rich get richer and the poor get poorer.

I think even Jesus Christ recognized this truth more than 2000 years ago counseling his disciples that those who have will have more added onto them and those who don’t will have even the little they have taken away from them.

But why is it so? Author Eric Beinhocker in his book “The Origin of Wealth” reports on a computer simulation that showed that starting off on a relatively wealthy note, in terms of access to resources, almost always means you will end up wealthier than your contemporaries who started off less wealthy. Basically that wealth begets wealth.

So are the poor doomed to remain poor?

Not the way Beinhocker sees it. After a long and arduous deconstruction he comes to the conclusion that knowledge is the origin of wealth. The greater the knowledge in a society the more it informs the physical and social technologies, how we work and organise ourselves respectively to achieve the society’s goals.

So western economies are richer because they have a long history for recorded research & development and are organized – politically, commercially, socially in such a way as
To take advantage of this accumulated knowledge.

Even on an individual basis we are not as rich as we want to be because there is something we do not know. I am always amused when in denigrating rich people, the average person point to their huge debts as the illusion on which their wealth is built. One can get rich by saving every coin they earn (something the rich man’s critic does not do anyway) but it will take a life time of subhuman subsistence, and isn’t the point to get wealthy to enjoy a better lifestyle? However the judicious use of debt can quicken the process. Now you know.

So the question for every government is how do you get everyone in a position to accumulate knowledge, raise incomes and get richer?

The simple answer is widespread education.

Learning about the Rhinelands, Canadian prairies and the Benelux region is largely useless information – even for those who travel regularly, but the greater role of education is to open our minds to receive more and more knowledge.

It is not by mistake that the richest countries have near universal education up to undergraduate level.

But in those same countries you have people like Bill Gates, Larry Ellison, Alan Sugar and Philip Green who have no degrees but are the richest men in the world. Would they have achieved so much in a poorer, low income country like our own? No chance. The organization of society can not yet allow the accumulation of such wealth here.

The adherence to rule of law especially as it relates to business, mean that wealth can easily generated there than here.

For instance this week the World Bank released a report measuring the ease of doing business globally in which Uganda slipped to 122 from 112 out of 183 countries surveyed. Singapore was at the top of the heap with the UK and US at fourth and fifth respectively.

The point is that in a free market economy the rich will get richer, as is their right, but the poor need not get any poorer. There is more than enough to go around for everyone.