DUBAI: A USEFUL CASE STUDY FOR UGANDA

A trip to Dubai and one would be forgiven for thinking he is at the center of the universe.

The airport, through which more than 55 million travellers went through last year, is a hive of activity and a smorgasbord of every conceivable nationality on the planet.

The central business district however is the mirror opposite with barely any foot  traffic and the multiple lane highways more than adequate for the million or so cars of the city.

When you hit the malls – Dubai has at least 70 of them, it becomes clear where all the pedestrian traffic is, there and in the numerous skyscrapers that poke out of the desert sand everywhere you look.

And the small emirate is determined to punch above its weight.

It is home to the tallest man made structure, the Burj Khalifa, the Dubai Mall, the largest in the world, the iconic Burj El Arab the fourth tallest hotel in the world and of course the Dubai Airport, which seat on 8,000 acres of land or slightly bigger than Jinja town.

 The country with a population barely above two million has a GDP of more than $80b, is the key logistical hub on the Arabia peninsula, is a major international tourist destination and is fast becoming a financial center.

But things weren’t always like this.

Its location has always served as a key stop over for traders from Asia on their way to Europe and Africa, but its economy was some time buoyed by the pearl trade, which collapsed after the second world war. Oil was discovered in the 1960s lifting Dubai out of its depression, maybe it’s the fickleness of economic fortune that forced the ruling family, the Al Maktoums to approach their new found bonanza differently.

It the height of its oil production Dubai produced 410,000 barrels a day – chicken feed when seen against its neighbours’ numbers production. It now pumps about 70,000 barrels a day and oil is expected to run out within the next two decades.

Knowing this the rulers have gone out of their way to diversify the economy to the point that oil and gas account for less than a tenth of GDP. Dubai’s major revenue earners are construction, trade, tourism and financial services.

Uganda on the cusp of oil production probably stands where Dubai was about 50 years ago – a poor country looking forward to discovering some oil, which would run out in a few years.

Maybe because of their long tradition as a trading family the Al Maktoums knew intuitively what it took to create an enabling environment for business.

They have a world class airport and other transport infrastructure, superlative accommodation facilities, legal framework which draws key tenets from the west and is enforced to the letter and a mouthwatering tax regime for both workers and companies.

In addition they set up some world class companies  -- Emirates Airlines, Dubai Ports nad Dubai World, which provided the initial infrastructure for their audacious repositioning of their economy, run professionally and all turning a profit. The dividends from these companies are enough to finance a lot of public goods.

As a result they have attracted the biggest companies, brightest minds and are swamped to by shopping tourists ensuring that when the oil taps run dry the fallout will be containable.

Uganda is centrally located on the continent, has a trainable population and it has enough tourism potential in its little finger than all of the Arab peninsula combined – my opinion.

Uganda like Dubai is recovering from an economic meltdown that should prompt us to make the pledge “Never again”.

The key difference which may not see us extract value form our oil find in a comparable period is that unlike us the Al Maktoum run as if as a board of directors, while we have a murky democratic process going on.

They can act decisively, unencumbered by electoral calculations or sniping politicians.

To engineer a similar coherence of direction would take much more intelligence and savvy in our case.

Dubai shows though that if we set our mind to it we don’t need the oil resources of an Angola or Nigeria to turn us around – in fact we have more than enough as it is, thank you.

DONOR BILLIONS OUT THE DOOR, GOOD RIDDANCE?

Last week it was revealed that donors were pulling the plug on budget support because we have failed to live up to obligations we made to clamp down harder on corruption and expand the tax base.

Consistent economic growth over the last two decades has led to high revenue collections to the point that now donor money accounts for one in three shillings in the budget down from a near 70% in the 80s and 90s.

However donor funds accounted for a more significant portion of the development budget, so withdrawal will cause more than a little bother.

We can expect a slow down in classroom, health center and road building projects as government scrambles to plug the holes left by the pull out of aid.

The donors are not pulling out of the country all together but want to reserve the right to channel these billions into project support.

Budget support as opposed to project support meant donors would contribute to the budget and government would spend the funds according to a pre-arranged plan, while project support would allow donors to cherry pick initiatives they want to support, without being dictated to by the government priorities.

By shifting to project support the donors think they can shield their money better from the grubby fingers of our corrupt officials while government’s concern is that these inflows uncontrolled by the treasury could upset the delicate balance of macroeconomic stability.

Two weeks ago the New Vision run a cover picture of a beggar seating under an umbrella in animated conversation on her mobile phone. The irony was not lost on many readers.

"There is something insidious about free money. It saps individuals and even nations of their sense of self-reliance, creativity and makes us beholden to the charity giver...

If this aid cut is effected it would be the best thing that has happened to this country in a long time.

There will be some discomfort, not unlike the pain the child who leaves home suffers, as he has to take a dip in the lifestyle he is accustomed to in his father’s house, as he casts off into adulthood and independence.

Whether the pain becomes a more permanent fixture of our lives depends on several things.

Historically these donor collective actions are not as coherent as they look.

"Beyond the stated objective of aiding poor Africans, aid is used as a tool of influence. To cut off aid is to lose influence. Donors use aid to ensure governments see things their way, many times regardless of the existing reality. It is also a huge industry that creates thousands of jobs for local constituents and provides business for contractors at home.

Given all these factors it’s is unlikely that the donors, with their different home context can maintain unity. It is not for individual countries or agencies to continue negotiating with offending governments.

Also with the emergence of the BRICS (Brazil, Russia, India, China & South Africa) whose developmental demands are often more pressing that the richer west, there are now alternative sources of aid.

But assuming the donors will not break ranks with each other and the BRICS will not come in to write blank cheques to the treasury, then government will have to make some hard but long overdue decisions.

To keep our prodigious growth figures rolling we going to have to bridge the gaps in the developmental budget by, cutting down on public administration, plugging the leaks due to corruption, roping in more tax payers and considering borrowing from the Ugandan public for more than just keeping inflation at bay.

In short our paper pushers will have to exercise more thought than it takes to cut and paste aid contracts and display dexterity with a fork and knife...

The easier scenario for a bureaucrat,  is to eat humble pie and grovel before the donors and have them rescind their position.

For the long term good of the country we need to bite the bullet and start thinking of a life without recourse to western aid.

It will have implications in every sphere of our lives.

As a bare minimum the government will be more responsive to the productive sector of the economy and not pander to rent seekers and hecklers that are our political elite.

They will see more value in a smaller cabinet, smaller parliament, fewer districts and shift this money to building  roads, railways and dams, which unlike the top heavy public administration, will lower the cost and improve the ease of doing business in this country.

A country is only as viable as its private sector we learnt with the collapse of the iron curtain.

"What aid does is it weakens the private sector by providing little incentive for the government to engage meaningfully to facilitate business growth, after all any revenue shortfalls can bridged by a quick trip to Washington (forget video conferencing there is no per diem in that)...

I am being naïve of course. The aid taps will be unstopped by this time next year and it will be business as usual.

L. VICTORIA AN ANALOGY FOR OUR POOR HEALTH

Since the beginning of the month the Vision Group’s various platforms have been writing articles on the train crash in progress that is Lake Victoria.

We are polluting, depleting and generally treating the lake so badly that at the current rate of doing things, there is a real danger of the lake drying up in our life time.

For anybody who has taken a cruise on the lake and had a flitting sense of its vastness it is hard to get your head around the possibility of its extinction.

But it has happened before and not very far from us. A series of satellite images comparing the lake which is shared by Chad, Nigeria, Niger and Cameroon is about a tenth the size now than it was in 1973. A combination of averse weather and wanton use of its waters for irrigation has led to that sad situation.

The lake is fast becoming a cess pool with National Water & Sewerage Corporation being forced to shell out sh700b to not only reach further into the lake to collect water but also to build another water treatment plant.

Fish stock has dwindled to almost nothing threatening lake side communities and at the heart of a simmering dispute between Kenya and Uganda.

But also last week a series of reports were released which showed the general health of our population is not where it is supposed to be.

The Uganda Demographic Health Survey showed that one in three children or five million children are suffering from chronic malnutrition. Health officials also fear that the hypertension is likely to become the leading cause of death in the country in less than a decade.

Sadly this is all happening not through any events out of our control. The dwindling lake and the failures of our health may one day – hopefully not, be used to illustrate the old say,  a stitch in time saves nine.

Around the lake, shared by Uganda, Kenya and  Tanzania we are  deforesting the catchment areas and draining the wetlands, which act as natural filters for water streaming into the lake.

Spiritual leader the Dalai Lama when asked what surprised him about human beings said, “He sacrifices his health in order to make money. Then he sacrifices money to recuperate his health.”

A hangover from economic trying times is our wish to look up to fatter people, their excess weight suggested better feeding and therefore greater affluence.

By the time the NRA rolled into town in 1986 the economy of Uganda had retreated to a subsistence economy. Manufacturing and processing was at an all-time low. So not only was food in shorter supply it was eaten right off the stalk with no processing in between.

As unimaginable as it sounds, as recently as the early nineties there were no fast food outlets in the Kampala and you could not eat in the city on a Sunday.

As we became more affluent and lived a little longer previously rarely heard about ailments like hypertension, diabetes, gout and a host of others reared their ugly heads. And for a brief and bizarre moment these conditions were considered status symbols.

But our eating habits aside we have taken on a more sedentary lifestyle, with its most clear manifestation is – as one friend likes to joke, that we now mostly travel while seating.

There was a time not long ago when it was not unusual to walk from Wandegeya to town.

The urgent need for economic growth is forcing us to look the other way as things go wrong in our environment and health, at the back of our heads we think we shall redress the damage when we are wealthier.

It starts with knowledge.

Having environmental and health studies as examinable subjects much earlier in the school curriculum would be useful in creating the critical mass of people to regulate the issues. Keeping thee issues at the center of our daily discussions should be encouraged.

Even the so-called poverty related illnesses like malnutrition can mitigated against with better  knowledge of basic nutrition.

We don’t have to wait for oil to suffer the resource curse, the abuse of our abundant environment – Uganda has almost half of all the arable land in the region and is 20% covered by water, is causing us to take our abundance for granted. We have been seduced into believing these are infinite and renewable resources.

We treat our health the same way.

Is it a chicken and egg situation? Do we treat our environment badly because we treat ourselves badly or is it the other way around.

Regardless we need to get stitching or we will one day bne looking back and wondering where did it all go wrong.

THE ECONOMICS OF UGANDA'S MARRIAGE & DIVORCE BILL

The NRM caucus which controls parliament by virtue of its numbers last week threw out the contentious marriage & divorce bill.

Separation of property at the time of divorce, the rights of cohabiting couples and the issue of marital rape were the most controversial clauses in the bill – and not necessarily in that order.

The family is a key building block of society and how it is run has a knock on effect on how the rest of society operates.

They are many ways to look at marriage, but if we use property relations as a measure of the strength of the relationship or its future potential what the marriage bill attempted to do may become clear.

At the beginning of time one acquired property by marking off a piece of land and securing it against others. For this muscle was required. So inevitably men became the owners of property. And this was extended to clans, tribes and eventually nations --- the group with the strongest men retained their land and even won land from other tribes with weaker men.

In addition property was only inherited by the male offspring.

Relations between men and women then reflected this reality and dictated how things happened.

As long as physical might decided who was on top or not this formula worked fine.

So whereas it is still necessary to use muscle to acquire and retain land one need not be muscular to do so. One can now use financial and legal muscle to do the same job.

As women went to school, joined the workplace and started their own businesses this formula started to run into trouble.

To begin with the importance of the man as a source of financial security begun to diminish. Secondly the man’s uncontested position as the head of the family was proving untenable because the woman as an earner in her own right now demanded a part in the decision making of the family.

In Uganda this progression has been happening for the last half century and accelerating in the last two decades.

The reported  increase in marital casualty has its roots in this dilemma. On the men trying to hang on to their past exalted position and the women and not often in an adversarial way, exercising their recently acquired powers of independence.

The traditional patriarchal hierarchies have taken a dim view of this development and are not averse to trying to wind back the clock whenever they can. By the way this is not an African or even Ugandan male peculiarity. All over the world when women have attempted to win some space from themselves they have come up against the inertia of culture.

Hillary Clinton is supposed to have lamented when Barack Obama pipped her to the White House, that once again the black man has beaten women to the privilege previously reserved for the white man. The Black won the right to vote In the US before women did.

Enter the Marriage & Divorce Bill.

At the bottom of it the bill aimed to institutionalize this creeping reality into law.

Women account for slightly more than half the population to leave that proportion of your population with unclear property rights means not everyone is fully engaged in the economy.

“Women are the most underutilized economic asset in the world’s economy,” said Angel Gurría, the secretary-general of the Organisation for Economic Co-operation and Development (OECD) recently.

A recent Harvard Business Review article argued that if women in the United States, Japan, and Egypt were employed at the same rates as men, the GDPs of those countries would be higher by 5%, 9%, and 34%, respectively.

The Marriage & Divorce bill may have come before its time but the reality of clarifying the property rights of women in marriages is important because without clarity on this issue their economic contribution will not be 100%.

UGANDA REBEL RECRUITING SHOULDN’T COME AS A SURPRISE

This week a former rebel who deserted the ranks of the rebel Allied Democratic Forces’s in the Democratic Republic of Congo revealed that revealed that the force is alive and kicking and recruiting systematically all over the country and even in Kampala.

The reaction to these revelations have been mixed.

The cynics have dismissed it as a ploy by government, security agents to beef up security budgets. Others see it as a vindication of their analysis that this is a wildly unpopular government. And yet others see it as proof that government has so frustrated the rebels that they need to resort to deception and operate outside the country to retain their relevance.

And we probably agree or disagree with them to varying degrees.

The history of our part of the world means that armed insurrection may always hold an unhealthy fascination for certain fringe elements. So the challenge for us is to deny these types recruitment grounds among the youth.

This is not rocket science. If the youth are allowed to be idle, denied of hope and basically allowed to their own devices it is more likely that their energies will be channeled into unproductive endeavour.

Uganda’s economy has been growing at an admirable clip for the last two decades. But unemployment levels seem to be rising even if official statistics show there has been a dramatic reduction in the proportion of the population leaving in abject poverty – on less than a dollar a day.

The contradiction is easily resolved when you understand what has been driving this growth , mainly construction, services and some industry. Agriculture which provides a livelihood from two in every three Ugandans is not growing to reflect this disproportionate importance in the livelihoods of Ugandans.

The truth is if the world thinks the Ugandan economy has been growing at a fast pace it can grow even faster if agricultural growth can be triggered.

But beyond the anemic growth of the agricultural sector is the near failure of government service delivery.

Education is the great social equalizer. The better educated you are the better income you can attract. While health increases worker productivity by reducing days absent from work and generally ensuring workers are in a good state to work.

Many of our leaders today would not have climbed the social ladder were it not for a better than average education and health system during their formative years.

The two main reasons for government failure are clear; Corruption, which is concentrating public resources in a few hands. A disproportionate share of government spending going to public administration rather than to infrastructure or marketing Uganda abroad.

The detrimental effect of corruption is self-explanatory but the even more insidious role of misplaced budgetary allocations is not as well understood.

President Yoweri Museveni used to argue, but not lately, that he would rather incorporate opposition leaders in government as it was cheaper than having to fight them as rebels. This logic seems to have extended to general public administration with an unwieldly parliament, more than twice the number of districts from 30 years ago and a battery of ministries some of whose existence as standalone entities is dubious.

Public administration is critical but is the most likely area where government spending can balloon out of proportion.

Every shilling spent on public administration, which is mainly spent consumption, is a shilling denied to education, health, agriculture, roads, railways or electricity generation, which are investments in the companies ability to produce.

Wealth and income disparities will not be solved by lining up the masses and dishing out money but by investing in the countries productive sectors so that the ease of doing business in this country is improved creating investing opportunities and jobs for more and more people.

The youth gainfully employed in making a living and who can see a bright future ahead are less likely to be recruited or conscripted into the rebel ranks.

But this government should know that, given its history as a rebel movement.