The flare up in fighting in South Sudan is
disheartening for the disruption and loss of lives that it entails but also for
the economic loss to Uganda that it signals.
Clearly the recent peace deal between the
South Sudan government of Salvar Kiir and the rebels led by former vice
president Riak Machar has failed to hold.
This only serves to strengthen the argument
that our northern neighbours need to fight until a conclusive winner is
determined, never mind how much blood letting this will cost or how long it
will take.
By the time the world's newest country
descended into civil war at the end of 2013, our trade with
South Sudan had
risen to $200m officially. It's hard to tell how much more trade went on
informally.
"Before South Sudan attained independence in 2011, fighting there was routine. But since independence South Sudan assumed added importance as the neglected land mass, which is nearly thrice Uganda's size with only 100 km of tarmac road, demanded everything from eggs to iron roofing sheets. In addition the massive aid inflows helped shore up our shilling, inflate our real estate bubble and lit up our night life...
There are two morals to this story that
leap to mind immediately.
That a nation is not a nation just because
the international community wills it. A nation is more than a people cobbled
together within boundaries on a map.
Secondly a scarceness of resources and
sparseness of economic opportunity are a signal for chaos.
And maybe for Uganda the lesson should be
that whereas exporting ourselves out of underdevelopment is an attractive
option, the more sustainable thing is to focus on growing our own market to
develop and sustain our companies and economy.
Economic history shows that the more
sustainable development comes from launching from local markets rather than
trying to first develop foreign markets.
On the continent South Africa is a classic
example.
Ostracised as pariah state in the last half of
the last century, the state worked on growing local demand to support its
industries. Granted that the increases in income were concentrated in the hands
of the minority white population, but also the development in their financial
sector meant they are way ahead of the continent on access to credit, which has
seen further growth since the abolition of apartheid.
Those same industries -- SABMiller and
Standard Bank, leap to mind, unshackled, refocused their businesses and now
compete internationally with a solid local market as their bedrock.
South Sudan was a boon for Ugandan industry
while it lasted and it will again one day, hopefully soon, but in the meantime
let us focus on growing our own markets.
Our macro economic policies have shown
themselves to be effective in producing general growth, without which
development is impossible.
However we struggle to translate that into
equitable improvements in living standards for the masses.
"For starters someone has to bell the cat and tackle corruption more decisively. On many levels corruption is hurting any efforts to grow local demand...
Not only does it concentrate resources in a
few hands, it affects service delivery and distorts the market for genuine
business men and other economic actors.
When a handful of individuals appropriate a
few billion shillings that is money government budgets for thousands of out
patients or primary school children or a few kilometers of feeder road it's
hard to justify.
In denying thousands healthcare or
education you deny them the tools to climb out of poverty, with the funds a few
technocrats use to school their own mediocre offspring abroad or on lavish
holidays or lavish lifestyle in the midst of poverty.
Just as devastating is that these same
officials in an effort to launder their money dabble in agriculture, real
estate or general trade. Their free money distorts the market as they undercut
the genuine businesmen who soon go out of business or fail to scale up their
operations.
Of course the corrupt officials once they
are out of government see their businesses collapse but the damage will already
be done.
We can skirt around the issue but the truth
is that if corruption is brought under control or eliminated all together every
other challenge putting the brakes on our development will be sorted.
"It is a delusion to think that by allowing corruption we shall build a middle class that will carry the rest of the country along. The nature of corruption is that it's never enough. For its practitioners every corrupt act is a stepping stone to the next act in an never ending cycle that can only end in doom...
Eventually of course they murk the whole
environment even for themselves but the pain is felt more by the masses.
Let the general global economic depression,
the slowdown in China and the implosion in South Sudan wake us up to our
responsibility to improve incomes at home before we looking abroad for markets.
