IT’S NOT GREEK! WHAT IS HAPPENING TO GREECE CAN HAPPEN TO US

While we have been preoccupied with our internal politics Greece has been teethering at the edge of economic disaster.

Imagine you inherit a house in Kololo, with a 25 meter pool, a fantastic lawn and garden, 50 bulb-house and a staff complement of five. After the initial euphoria of living in Kololo has worn off (probably by the time of the first workers’ paycheck) it will begin to dawn on you that you might be playing out of your league.

But you might soldier on thinking that you have arrived because you live in Kololo.

You will soon realise too that to keep up with your neighbours your security lights have to be on all night, you have to own a fuel guzzling 4wd – not one, but at least two, one for you and one for your better half, you might have to throw a few garden parties, if only to “revenge” for the ones you have been invited to.

You soon realise that the expenses are mounting faster than your boss can afford you a raise.

You can do one of two things. Either, sell the house or rent it out and move to a neighbourhood where you can keep up with the Jones, better still where you can be THE Jones or raid your bank, the local loan shark, friends and family to keep up the lifestyle.

The latter is the more sensible solution but oftentimes, out of pride and our unwillingness to take a downgrade to our new lifestyle, we opt for the second.

Before not long debt payments catch up with you and suddenly the walls around your compound serve as a prison. That is if your better half is not insisting on sustaining the fictitious standard of living – at least outside your compound here people can see you making a retreat behind the walls less than a pleasant experience.

By the end of the day you may lose your inheritance, your family and your pride as the debt collectors give you no breathing space within which to manoeuvre.

That in a nut shell is what happened to Greece.

It was invited to the European Community in 1981 and 20 years later join the Eurozone, the group of western European countries that use the Euro as their currency.

With that the Greeks embarked on a huge public spending spree – of course to keep up with their wealthier European neighbours, the spruced up their infrastructure, paid for an extremely expensive Olympic Games in 2004 and raised public service salaries by as much as 50%.

"Things may have worked had the global financial crisis not rolled in in 2008 and exposed how the Greeks were living way beyond their means. As if that was not enough they were hiding debt off the books and tax evasion is a national past time. Which was a double whammy because not only were their repayments mounting but their taxes collections could not honour their obligations...

If they were a person, Greece would long have been declared bankrupt and their assets parcelled out to willing buyers to pay off their debtors.

But Greece is a country – and thankfully not Uganda, so they were bailed out twice in 2010 and 2014, with conditions attached. Among  the conditions were that they would collect more tax, privatise their public enterprises and cut down on public spending.

Politics did not allow them live up to the conditions and in fact in January the Greeks voted in a government that had pledged to throw out these austerity measures and tell the EU to jump in the Mediterranean.

By the time of writing this column a Friday deadline was looming. The Greeks had blinked earlier in the week and suggested they may accept some extension to the debt. Germany, the EU’s economic loadstone, said without accepting the full conditions for another bailout they would veto any rescue plan.

However observers were already saying it would not be as much of a tragedy if the Greeks left he EU as compared to the last two times. Previously they owed a lot of private banks money, defaulting on the debt would have infected the rest of Europe. Now the debt -- €320b (sh1,070b)  or four times the size of the  East African Community economy is owed  mostly to governments, who are better placed to survive a collapse.

"It is easy to see how they got to where they are. There are only two ways to spend money to consume it or to invest it. The latter gives you a good chance of ending rich, the former is guaranteed to pauperise you...

The Greeks are learning the hard way.

JANANI LUWUM: LET’S PLEDGE “NEVER AGAIN!”

Last week we commemorated the death of Archbishop Janani Luwum, who was killed in February 16, 1977 following allegations he was collaborating with the forces opposed to then president Idi Amin.

The official record is that he was killed during interrogation, but there is a strong suspicion that Amin himself may have actually pulled the trigger himself.

We read how attempts to portray Luwum’s death as a car accident didn’t hold. One nurse from Mulago testified that she saw bullet holes on his neck and chest, while another reported that a badly beaten Luwum joined other inmates briefly in the cells of the State Research Bureau (SRB) in Nakasero ours before his death.

During it all the good Archbishop does not seem to have lose his poise or lost his faith in his God. A useful study courage, defined as grace under pressure.

Reconstructing the mood of the time does not take a fertile imagination.

"An isolated Amin, by this time six years into his reign of terror, was seeing opponents – real and imagined around every corner. Either because of his limited exposure to the structures of civil society or because of a total disregard for due process or because he could, he and his system were eliminating people on pure suspicion....

The terror was made all the more universal, the anecdotal evidence suggests, with some people taking advantage of the situation to settle personal scores, to grab property or take over people’s girlfriends and wives.

Clearly Luwum fell prey to this heightened sense of paranoia, whether he sympathised with the opponents of Amin’s clumsy administration or not.

It has been suggested that the death of Luwum was the straw that broke the camel’s back, finally raising international awareness to the extent of how things had gone wrong in Uganda and galvanising support for regime change in Kampala.

Looking back almost 40 years it is maybe hard to fathom how things came to that.

A younger person in his 30s who ardently followed the series of articles on the Vision Group’s various platforms, leading up to the commemoration on Monday, was in genuine shock while declaring, “So Amin was this bad?”

Shock because in his experience it would be inconceivable for a senior prelate in such and secondly that a president would be personally involved (that is what he is convinced happened) in such an act.

It is probably that same naïvete that allowed Amin to run rough shod over the population and by the time people had got over their gullibility and stopped giving him the benefit of doubt, they were paralysed with terror and unable to mount any meaningful opposition internally.

It is useful to celebrate the life of Luwum, even make it a public holiday, but he would have died in vain if we do not look beyond the horror of the time to understand how the situation degenerated to such depths.

We can blame it on the politics.

Our post-independence politicians in trying to outmaneuver each other resorted to extrajudicial methods, circumventing established institutions and generally setting precedents that continue to reverberate down our history.

Once the powers that be begun to ignore the laws to ensure they got their way, they had begun the slide down a very slippery slope into chaos.

By February 1977 anything could go.

Agency or the role of an individual or group of people in shaping events will always be critical in the unfolding of history, but the sustainability of those changes or their continued progress, will depend on the viability of the society’s institutions.

Maybe one can’t fault a young independent Uganda whose institutions had not matured enough as to call the main actors to order at the time.

Maybe our major players were just inherently averse to operating in structured situations and preferred fluid situations where the ends justified the means and to hell with the rest.

Maybe we can blame fate that a coincidence of events that did not happen in neighbouring Kenya or Tanzania happened here and the problems of the 1970s and 1980s were predestined.

"They say that those that do not learn from history are bound to repeat the mistakes of the past. It offers no solace that they also say that, what we learn from history is that we do not learn from history...

Hence the importance of a deeper commemoration of Luwum’s death.

Thousands of people died during that horrific eight years of our history, and as inconceivable as it seems we can return to such a time unless we internalise and learn from what led to that dark age and determine that “Never Again!”

AID NEEDS TO BE RECONFIGURED TO BENEFIT THE RECIPIENTS

Last week three articles in the local and international press caught my eye.

In our very own New Vision former finance minister and now Uganda Revenue Authority (URA) Gerald Sendaula repeated the sad fact that we pay too little tax as a proportion of our economic output – 11%. He suggests that land should be taxed to bridge this gap. He pointed out that whereas agriculture, which is based on land, accounted for three in every ten shillings of GDP it accounted for less than one percent of tax collections. 

The other article was in the Economist, which lamented that since the Haiti earthquake in 2010, when the country was literally flattened, there is little real improvement to show for the $9.5b (sh27trillion) outpouring of charity that gushed into the Caribbean island state.

An important point made in the article was because of the endemic corruption in Haiti’s bureaucracy the aid agents circumvented the government to get to the recipients. However this had the unintended consequence of not exercising the institutions, so now those same neglected institutions cannot ensure continuity of some of the projects the donors left behind like health centers and water purifying plants.

And finally across the border from us host, President Paul Kagame told the East African Capital Markets Conference held in Kigali.

“The question of preference between markets and aid can only be asked in Africa, not in any other region of this world. Let’s not be diplomatic, let’s not gloss over issues. Markets are markets. We know what they offer outweigh what we have in aid by thousands of times. All kinds of wealth lying all over the place in Africa and being recycled to us in forms of aid and in the end we are told, you must be humble and quiet and not say anything. Let’s not be diplomatic, let’s not gloss over issues. Markets are markets. We know what they offer outweigh what we have in aid by thousand of times.
Aid is more political than anything else. Markets are less political, they are neutral.”

In the first instance we see that we actually have the capacity to raise much more tax in this country, but we don’t. And that the aid industry we have been seduced to think is willing to bail us out, actually does us little good. And finally that aid is about exerting political influence and less about doing any good for the real recipients of this aid....

We really need no convincing about these facts in Uganda.

For instance despite the massive amounts of money poured into the health and education setcors, judging by their results in terms of increased school dropouts and poor facilities, it’s hard to make a reasonable value-for-money justification for the received funds.

But for a fraction of the same cost the private sector has resuscitated commerce and industry and their taxes, which have risen a hundredfold in the last three decades, have ensured a much improved Uganda. Which is not saying very much, but at least significant improvement has been recorded.

The Haitian experience was inevitable for a number of well-known reasons.

One, that a lot of aid is often lost in administrative costs – those four wheel drive monsters and the expatriates who whiz around in them don’t come cheap. And secondly, these aid workers totally oblivious to the local context often get the project designs so wrong that they are unusable after they have upped and left.

And finally aid agencies not unlike governments, are more concerned with the inputs – classrooms built, clinics kitted and boreholes sunk that the actual output in terms of real sustainable improvements in the living standards of the beneficiary communities.

But what if we tapped the markets for our financing needs? Oh no! The donor experts will say, it will burst your borrowing limits and make your debt unsustainable.

A valid concern but only if we are going to splurge on luxury imports and white  elephants like stadiums, palatial state houses and fleets of fuel guzzling 4WDs for our officials. If however we are going to spend that money on generating electricity, sprucing up our telecom networks, laying more tarmac road or building railways and opening up water ways, such projects will generate economic activity and pay their way.

Beyond that the markets that lend us this money will verify the viability of the projects and lend if there is a real business case for them. Because the markets would rather be paid than chase down their debt from reluctant borrowers. Not all the time, but enough times to ensure a critical mass of these projects wlll come in, on time, under budget and live a lasting impression.

"One of two things have to change. Either the aid industry changes the way they do business to, for instance the many billions remain in the beneficiary communities in a sustainable way, which is unlikely soon.

Or we rethink the way we think about markets and recognise that they have something we want and we have something they want. A mutually beneficial relationship...

The second part can be helped when we realise that we are actually a rich country, a rich continent not only because of the value under the soil or the industriousness of our people but also because the evidence is there that we have supported and helped the west thrive, first through slavery and cheap raw materials and increasingly now via net outflows from our countries, although official figures show we are aid recipients.

THE UNWHOLESOME PRESSURE WE PUT ON OUR CHILDREN

Last week 23 year old Joan Abua, frustrated with her third O-levels failure, committed suicide by hanging herself from a tree behind the family home in Akongo village, Otuke district.

In letters she left behind for her family, she lamented, “This world is not easy, I tried my best in vain” and while thanking people for coming to her funeral, she promised to curse her relatives if the letters were not read out for the mourners.

Around the country similar dramatics were played out – with far less fatal consequences, by “failed” candidates. 

One boy, crushed that he did not get four-in-four at primary level, retreated to his room and refused to come out until his parents had wangled a position in a high flying secondary school. He had scored four distinctions. 

Another young lady who was hell bent on a career in medicine was so distraught that there was a chance she might not do it in Makerere University, she was ready to repeat her A-levels to make sure of it in 2016. Never mind that she had AAC.

But back to Joan.

"There is something very wrong when a young adult gives up hope and takes their life. 

At that age, people should feel that they have the world at their feet, that they are indestructible and that their futures are blindingly bright...

That she repeated her O-levels multiple times points to the fallacy that success in life, which we equate to financial success, flows from academic achievement. And only from a specific education, the one that leads to professional qualifications.

We are involved in one big conspiracy, where the emphasis of our education system is to obtain good marks and not to teach us how to learn, which was the original intent of education.

Which makes sense because documented knowledge was limited then, relative to the current situation, so learning was intended to encourage an inquiring mind, a mind straining against the boundaries of known knowledge.

"What is happening now is that, as a means to market our institutions, we are putting our kids under pressure to churn out four-in-fours and eight-in-eights by cramming information into their little heads and sucking the joy of childhood out of them with loads of homework and ungodly school hours. The unintended consequence of this being that we are graduating self-absorbed, zombies that are good for regurgitating what they have learnt but struggle in the real world where everything is in a constant state of flux....

Essentially we are setting our children up for failure.

Robert Kiyosaki author of the book Rich Dad, Poor Dad says that A-student end up working for C- students. 

"His observation is that A-students who have excelled in an education system that does not tolerate failure, discourages partnership and puts a high premium on theory and rote knowledge is the worst training ground for developing entrepreneurs, businessmen, wealth creators.

However the C-students, rejected by the system are better suited to succeed financially because they are used to failure, knowing their intellectual limitations are more ready to collaborate and being outside the mainstream are used to swimming against the tide. The perfect qualifications to survive in business...

You don’t have to take his word for it. 

Look around you who are the most successful people – even by our warped standards of success? It is not the brightest students, but more likely it’s the people who know how to collaborate, lead and generally get things done.

The richer members of our society are no longer looking for grades. They are looking to grow rounded adults, exposed men and women equipped to operate in a globalised world. They can afford it.

"For the rest of us mere mortals it would be important for us to take a step back and ask ourselves whether forcing our kids into the latest meat factory to cram how to read, write and count is the best preparation for a future where knowledge is pervasive. In the future it will not be what is contained in one’s head that will count but whether one can find the information needed and manipulate it to solve the pressing questions of the day...  

Pressure is good. If handled well it forces us to expand our limits and grow. However it can be applied to the wrong priorities and count for nothing.

For Joan we all owe her an apology. For not only forcing her down a path that clearly did not fit her skill set but also for not providing her the alternatives and supporting her in exploring them.

Joan is an extreme case but we see the pressure piling on our children’s little bodies as they brave the freezing pre-dawn cold to school laden with bags as heavy as themselves. Is it any wonder that our children are giving up on life before they have started living?