MEDICS’ STRIKE; DAMNED IF YOU DO, DAMNED IF YOU DON’T

This week doctors went on strike for better pay and working conditions.

Unlike a strike of taxi drivers or shopkeepers or even cooks, the doctor’s strike has reverberated through the population, especially those who cannot afford private care.

And unlike other strikes the doctors can keep it up for longer than most, because while they will not be seen in demonstrations, they can sustain themselves by working in the private sector.

"A lot of industrial action has fallen short in this country because other strikers cannot support themselves outside their public sector jobs...

How did we get to this?

We have to go back to the 1970s and 1980s when, not only was no new infrastructure built in the sector but also the rate of graduation of medical professionals did not keep up with population growth.

According to the World Health Organisation (WHO) there were 11.7 doctors for every 100,000 doctors in 2010 compared to nine doctors for the same number of Ugandans in 1965 shortly after independence. Most of the gain in these numbers came in the since 2002 when the number was 4.7 physicians per 100,000.

Up to 2010 our population had grown more than four fold since independence.

Kenya in 2010 had  19.9 doctors per 100,000 people. But the real measure in the region is Mauritius which in 2010 boasted 107 doctors per 100,000.

To show the enormity of the task ahead, to equal  Mauritius 2010 numbers we would have to increase the number of doctors twenty fold from the about 2,000 doctors we had in 2010.

This deficit is also reflected in all other medical professionals and in the sector’s infrastructure.

"In trying to redress this imbalance in the last three decades we have tried to shore up health care by investing in health care centers, to decentralise the services, we have more than just Makerere graduating health professionals and more recently we have given our referral hospitals a complete overhaul.
But it seems as if the faster we run the further behind we fall....

This context is important because a country’s health sector is only as good as its public health services.

Everywhere in the world investors in the sector will just do just enough to be better than the public health system to be competitive.

If in the health system there are no doctors, drugs or beds then the private sector will just ensure it has a few more doctors, a slightly better stocked pharmacy and few more beds to make it worthwhile for the public to pay for the service.

It is no wonder in Uganda that we still travel abroad for treatment 50 years after independence. Our private health care is not that much better than the one you get from the crumbling health system.

The doctors are within their rights to sue for better pay. For the lifesaving work they do it’s hard to argue that they are paid adequately.

The government says a pay readjustment is coming shortly.

One can see government’s dilemma.

In pulling Uganda up by the bootstraps over the last three decades they have faced numerous sequential challenges. So what do you do first – security, the roads, schools, hospitals, power generation etc? And when you decide on the order to invest do your priorities remain static? But most importantly how much do you have to commit to any or all of these sectors?

It is not helped that there was a universal decline in all sectors in a situation of few or no resources. 

So one suspects the decision was often that because there was not enough to go around some sectors will suffer as we beef up the ones ahead in the queue of priorities. And even within the individual sectors there prioritisation challenges.

And despite all this is did not help that some agencies were created with salary structure way beyond public sector pay grades and continued unabated.

"One can sympathise with government’s numerous challenges, but not as much as with the doctor’s plight...

That being said it would be useful if the doctors found another way of engaging government other than depriving the greater public of their lifesaving services.

There must be a way for them to keep working as they negotiate with government for better, if for nothing else than that they are no ordinary workers. Which again strengthens the case for their improved pay.

HAPPINESS, THE ULTIMATE AIM OF DEVELOPMENT

Last week while in Dubai President Yoweri Museveni met up with state minister for happiness Ohood Al Roumi. My knee jerk reaction was to laugh. What does a ministry of happiness do, I wondered.

But it speaks to the ongoing discussion about how to convert wealth creation – GDP growth into general well-being.

"That it’s possible for a country to grow consistently for years even decades and the majority of its people do not enjoy the benefits of the progress...

There many reasons why this may happen but two leap to mind.

It is possible that the drivers of that growth do not affect the majority of the population. So for instance in Uganda’s case growth in the past came from services – financial, retail and telecommunications, construction and industry. Agriculture which provides a living for at least seven in every ten Ugandans has been suffering less than double digit growth forever.

So the gains were concentrated in the urban areas mostly, with the rural areas feeding off the crumbs.

The second reason maybe and related to the first, is that the people may not be equipped to take advantage of this growth when it happens. This may be due to the fact that they may not be connected to the centers of power and therefore growth, as happens in oil producers Angola and Equatorial Guinea passes them by or that they may not be educated and healthy enough to tap into the manna.

So take two men who while they share the same physical space, their economic fortunes can be as different as night and day.

Jackson is a graduate of Makerere University, has ACCA accreditation and whose grounding in finance has seen him climb the ladder in the banking industry over the last 20 years of employment. 

His salary broken down to an hourly rate, assuming he works eight hours a day, five days a week and 11 months in a year comes down to about sh250,000 – this is without his annual bonuses.

His gate man, Mujuni dropped out after his O-level. He has some basic proficiency with a rifle and close contact combat. While he has been employed for as long as Jackson, he earns the relative pittance of sh1,875 an hour. Apart from the lower wages, he works double the number of hours that his boss does.

The difference in fortunes when you provide for luck, old boy networks and differing intelligence, really comes down to the fact that Mujuni’s schooling was cut short. When you add it up Mujuni has barely seen half as many blackboards as Jackson.

It is also true that while guarding his master’s pad, Mujuni is more prone to malaria – at least thrice annually, than Jackson – who can’t recall his last attack.

Money and time spent treating malaria are additional drawbacks to his earning power – he gets paid per day not per month.

Meanwhile just like Jackson, Mujuni resides in Kololo – in a matter of speaking. Just like Jackson he works in Kampala, which accounts for more than half the country’s economic activity. And yet amidst all this abundance Mujuni struggles, no, fails dismally to reach out and snatch a share of all this wealth whizzing around him.

So redressing inequalities, which happen when economic growth is not equitably shared, starts with ensuring the activities in which the majority operate are supported to grow and at an individual level, you do this by providing education, health and other services which will give everybody a fair shake at the game of life.

Sounds too simplistic? 

Think about the generation that started life in the rural areas – their first classes conducted under trees, with their first alphabet scrawled in the dust using a sharp stick, who only broke free from the village because they stuck to school longer than their siblings and friends who stayed back in the village.

"It therefore follows that to determine a country’s prospects at widespread wellbeing for its people look at it education and health systems....

It is unrealistic to expect equality in society, but a minimum standard of living for everyone where some people and their future generations are not condemned to sub-human existence is not much to ask, or is it?

But back to Dubai’s ministry of happiness. While material well being does not guarantee happiness, improved material well being where one is free from disease and can look to the future with hope, is a good starting place for happiness.

And if we set happiness – an intangible, as a national goal we may be better able to line up the tangible steps we need to take to attain this far off goal. And we are not talking about the momentary burst of happiness that come with being with this or that person or come with a joke, but a sustained level of joy for everybody, every day, year after year.

So I am not laughing at the Dubai state minister of happiness anymore. She and Dubai are onto a good thing.

VENEZUELA SHOULD SERVE AS A CAUTIONARY TALE

Events across the border have captured our collective imaginations in recent weeks. US President Donald Trump never disappoints from day to day with his faux pas. Now everybody in show business is running scared for fear of the next set of revelations on sexual harassment. And meanwhile British prime minister Theresa May is scrambling to negotiate a soft Brexit that has left her isolated at home and abroad.

These and many other stories are a big deal.

But in South America Venezuelans are fighting an existential battle with disease, hunger and poverty and we are not just talking about the bottom of the pyramid people. Increasingly now everyone in Venezuela is living below the poverty line.

"It wouldn’t be a big deal. We would have brushed it off just another Godforsaken third world country excelling only at doing things wrong at every turn. But Venezuela has the largest oil reserves in the world. And as if that is not enough, is a stone’s throw away from energy hungry USA...

Things are so bad in Venezuela that inflation has sky rocketed to the point that people are throwing money away– the International Monetary Fund (IMF) projects it go beyond 2,000 percent next year from this year’s 650 percent.

Things are so bad that murder and kidnapping are the only serious growth industry.

Things are so bad that malaria which was eradicated in 1961 – before the US, is back with a vengeance, so are measles and there are no HIV or hyptertension drugs.

Things are so bad that people are dying of starvation in the streets, because the government would rather meet its international debt obligations than import food. If they did not meet their debt obligations, debts which were incurred during the oil boom days when a barrel peaked at $114.

The official figures paint a rosy picture of an upper middle income country with a GDP of $440b – almost 20 times our economy’s size and per capita incomes of about $8,000.

How did it come to this?

As so often happens it was a case of expedient politics being applied to remedy economic shortfalls. 

Former president Hugo Chavez in an attempt to endear himself to the Venezuelans after being overthrown once before, used oil to massively expand social programs, nationalised companies and looked the other way when his cronies were gouging themselves at the trough of state resources.

As long as oil revenues stayed high some of the worst ills could be paperd over.

Oil, which was discovered in 1935, has so dominated the economy that it accounts for a third of the Latin America’s economy, 80 percent of export earnings and more than half the tax revenues.

So when prices started falling to current levels of about $50 a barrel the emperor’s nakedness was exposed. As if that was not enough during the good days Caracas borrowed voraciously against future oil earnings. As it is now it receives almost no money from oil exports but still ships off massive amounts to Russia and China as debt payments.

"While we scout the globe for best practice in how to deal with our oil sector, we should not lose sight of how not to run an oil economy – and Venezuela, better than Nigeria and Angola can serve as a powerful cautionary tale...

Thankfully we are at least making the right noises.

The government is committed to using revenues to boost our infrastructure, which is important to ensure that other parts of the economy can continue to grow alongside the oil industry.

We are also talking about a sovereign fund, financed by oil revenues  and housed abroad. This is important because if all oil revenues gush back into the economy it can cause a massive appreciation of the shillings and make our other exports uncompetitive.

The argument that we should bring the money all back and not keep it offshore developing other economies is a populist one but not based on the facts. If the sh7trillion NSSF is struggling to find bankable projects in Uganda what of the estimated trillions of shillings in revenue we are expecting annually when production kicks off?

Beyond infrastructure it would do us a world of good if we could shore up our education and health services. This would enable upward mobility of larger parts of the population. A healthier and better educated population is a more productive one.

The temptation to start a flurry of state enterprises will always be there but we should resist the urge. 

State enterprises are not only inefficient, because their main role is not to deliver service or show a return but to pay off constituencies, they also distort markets, frustrating private sector players through preferential treatment, while giving suppliers and clients a raw deal.

We lack the discipline to run or even oversee the good running of good state enterprises, unlike Dubai. We would be better served if, along with improving our infrastructure – soft and hard, we developed industry wide incentives for investors – foreign and local, to come and set up the companies that can ensure an alternative economy to oil exists. These industries’ output would eventually eclipse oil.

"As we all know in our personal lives, there is no money that is too much to finish. Oil is a finite resource and we should behave with this in mind, unlike Venezuela which was seduced into thinking the good times would always roll...

And now after decades of betting solely on oil the irony is everything else doesn’t work, the oil industry inclusive and yet they still have billions of oil barrels underfoot!

AGGREGATING RESOURCES: THE CHALLENGE FOR AFRICA, UGANDA

On Wednesday Uganda Christian University launched a think tank, the African Policy Center, which will conduct research meant to inform public policy, biased towards a Christian world view.

Dr James Magara presented on the think tank’s role in the Africa of the 21^st century. The problems of Africa Magara said, come down to the fact that we have been doing a lot of doing, unaccompanied by much thinking.

Adopted from Second World War America, think tanks are often independent organisations which set themselves the task to research and disseminate knowledge often with the aim of influencing the powers of the day.

"This attempt speaks to the wider challenge of Africa and more specifically Uganda. We are poor, backward and even hopeless, because we have not aggregated our resources, be it our labour, our markets, our political activism, our finances or in this case our thinking...

We see it all around us.

Look at the classical factors of production.

Barley a quarter of all land in Uganda is titled. This is a disturbing statistic because without recognisable property rights for the majority of Ugandan households it is difficult to unlock the full value of the land we live on. One way to unlock this land is to aggregate these holdings into bigger holdings either through acquisition or cooperation. It is economies of scale such as these that see the US with only three million farmers, down from 30 million after the Second World War, can be the world’s largest exporter of food.

The labour movement is thin on the ground in Uganda. While serving as a useful counter to capital, labour movements have had the unintended consequence of leading to greater efficiencies in the work place through innovation and automation.

And finally capital. Our lending rates are too high, we have too little capital to finance our own projects and our financial markets are shallow, restricted to a handful of products, leaving out the majority of consumers, because we have not brought together our monies in meaningful ways. We save less than 15 percent of our GDP in the formal banking system, while the east Asian countries at least double that figure. Aggregating capital in this way not only makes it easily accessible and cheaper but attracts even greater pools as well.

In the more developed western economies they have taken this a step further, with the creation of capital markerts, which supply patient money to their businessmen. All the capital markets on the continent do not have market capitalisation – the value of all the shares listed on an exchange, equivalent to that of the Brussels Stock Exchange (about $3.7trillion).

But they have gone a step further, and despite some recent hiccups, have been pushing aggressively to consolidate their politics. See the United States and the European Union. This allows them to not only consolidate their markets but to project their unified will allowing them to have more influence on world affairs disproportionate to the populations of their countries.

The disaggregation of our resources is by design and by accident.

 "And why have we failed to aggregate our resources? A lack of leadership or more specifically a dearth of leadership, which sees uplifting the wellbeing of their respective people as their raison d’etre...

Since independence through design or accident of history, our leaders have not been the sharpest knives in the draw. As a result they have found little use for knowledge or gone out to promote research and its resulting knowledge used to inform decision making.

In fact they have been willing consumers of other people’s thinking, the Bretton Woods institutions or Brussles or even Moscow, knowledge we cannot have been generated for altruistic purposes least of all for our benefit.

The African Policy Center has a noble mission, it will run itno a lot of roadblocks –opposition from established players or inertia from the intended recepients stuck in their old ways. But no one imagines the road ahead will be smooth.

WHO WOULD WANT TO INVEST IN UGANDA?

Last week the finance ministry announced the cancellation of the Rift Valley Railways (RVR) concession and took back the management and operations of the railway services.

The governments of Kenya and Uganda had privatised the running of the railway line from Mombasa to Kampala more than a decade ago, as a way to increase its efficiency and move more cargo onto rail and off the roads.

In correspondence The New Vision has seen between government and the concessionaire last year,  government alleged nine breaches of the concession contract among which were default on concession fees, failure to meet volume targets, failure to rehabilitate and operate the Pakwach line and failure to rehabilitate rolling stock.

In addition investment minster Evelyn Anite said the country had lost $700m (sh2.5trillion) in the course of the deal without elaborating further.

RVR responded to the claims showing proof of how they had met the requirements, which letter was summarily rejected and met with a letter announcing the cancellation of the concession in April this year.

A letter from RVR’s lawyers MMAKS advocates pointing out that the attorney general had issues an interim order prohibiting the termination of the concession until today, 16^th October 2017 was clearly ignored by the finance ministry. The interim order was to allow for an arbitration to proceed as stipulated in the contract.

Uganda’s action comes not very long after Kenya decided to cancel the concession on their side under similarly unclear circumstances.

"Understandably the whole affair has left a bad taste in the mouth of Qalaa Holdings. The Egyptian investment group was the main partner in the concession, which they salvaged from the previous operator South African Sheltham Rail Corporation....

Karim Sadek, Qalaa Holdings’ managing director of their Transportation Division says his company has invested $320m in the whole concession since 2010, he maintains that they have lived up to their side of the agreement and still thinks the Uganda side of the concession can still be salvaged.

“We have reputation and good working relations with the partners on this investment, which we would not like to see lost,” Sadek told the Business Vision.

Sadek says the concession was frustrated at every turn by the Kenyan bureaucracy, which made no effort to hold up their end of the Public Private Partnership (PPP) agreement, taxed them to support the road infrastructure and made financial demands on the operators that made the concession unviable.

“Uganda has been very helpful on many fronts we think going to arbitration can help us iron out any outstanding issues, paving way for the continuation of the partnership in Uganda,” he said.

He believes that an arrangement where they operate the Uganda leg, with right of passage to operate between Mombasa and Malaba would ensure that the efficiency gains that have been made so far would not be lost.

In hindsight Sadek now sees that the environment would have made it hard to operate under the best of circumstances.

“On the Kenyan side there has been great hostility from the management and total indifference from the policy makers, no attempt at all to make this deal work. We were aware that there were challenges in making the concession work but we had bought into the narrative that it was Sheltham’s lack of capacity that had failed the earlier attempt. We didn’t see the ecosystem failing us the way it did.”

He says despite the circumstances they managed to reduce transit times for good to Kampala from Nairobi to 15 days from the prior 21 days, while offloading wagons had been reduced to three hours from 21 days.

However government officials with intimate details of the process warn that government is taking too much for granted and could stand to lose not only money but international good will.

“The biggest issue was that we did not put in place an independent regulator who would independently monitor the concession and two, someone to who either party Qalaa or government, could refer any disagreements. The works ministry undertook to do this but they never got around to it.”

As a result Uganda Railways Corporation became the de facto regulator, which constituted a conflict of interest as they were also owners of the assets and there was always a sense that the old URC wanted to take back the service.

That being said he advised that, “Government needs to allow for prearranged mechanisms to dissolve the deal to take their course. The lenders for instance, we don’t hear anything from them and yet they have a first right to take over and even find another operator.”

"It is déjà vu all over again. We have seen this inability to work harmoniously with investment partners before...

We make the mistake of seeing investors as individual entities who we can mishandle as we please. But we forget – because we must know, that there is a whole ecosystem behind the size of investors we are looking for to bridge our infrastructure deficits or build factories or open service industries.

To begin with they come with partners, as a way to share risk, and then these often have financiers behind them and all these often have the backing of governments. So when an investment goes wrong for other reasons than that the project was not viable one is stepping on more toes than they see.

This is a very real challenge because as it is if we take back the railway we will still have to go back to the same lenders to get funding for our plans.

Something has to give.

"We cannot continue running rough shod over genuine businessmen and then wonder, why we keep attracting crooks or why we are not getting enough investments coming in or why we can not create the jobs we so badly need...

KENYA, THE TEETHING PAINS OF DEMOCRACY

Recent events in Kenyan have elevated the political scene of our eastern neighbour to the point of high drama.

With barely days to go to the October 26^th repeat poll opposition leader Raila Odinga announced he was withdrawing from the presidential race. Legally that would have forced the country’s electoral commission, IEBC to cancel the current process and call for new nominations.

The election that was concluded on August 8^th and which saw President Uhuru Kenyatta retain his seat, was thrown out by the Supreme Court in September and a fresh poll between the leading contenders ordered.

But within hours of Odinga’s announcement, the high court in Kenya allowed for other candidates who were in the initial race to get back on the ballot.

And while we were still trying to wrap our heads around what this all meant, a senior elections official Roselyn Akombe, threw in the towel on Wednesday, saying that there was no way a credible election could be delivered under the circumstances.

As if to back her up the  IEBC chief Wafula Chebukati said that while his team was ready to oversee the elections next week, he cast doubt on whether a free and fair election could be held given the pressure from both sides of the political divide.

And all this was happening under a cloud of violent demonstrations, where several people have been killed in the capital, Nairobi and in Kisumu, Odinga’s western Kenya stronghold.

"The Kenyan experience is the saddest thing to watch unfold. Especially as barely a decade ago they descended into a post-election bloodletting that accounted for more than 1,000 lives and saw tens of thousands more displaced from their homes....

Analysts think there may be more casualties if violence erupts again this time. In the last decade despite the massive infrastructure projects and the economic growth the country has enjoyed, the inequalities in the country have only widened. An immediate outcome of this is that there is an army of unemployed youth roaming around with nothing to lose and are easily incited to widespread, indiscriminate and senseless violence.

It is plain for anyone to see that Kenya is going through a painful transition from the big man politics of founding father Jomo Kenyatta and his successor Daniel arap Moi’s time to a more democratic society where power has been devolved away from the center and people are no longer cowed from expressing their views and choosing their allegiances.

The four decade long rivalry between the Kenyatta and Uhuru family’s only serves as useful backdrop for the changing realities in Kenya.

Long standing tribal fissures are coming under strain as a more educated and connected youth take their place in running the affairs of the country. Historical economic contradictions are being challenged as old money based on land and industry, is being challenged by new fortunes being made in services. The old political class is giving way to the new, in a more than messy progression that while it is unlikely to see the country impode on itself, will leave Kenya badly scarred by the time the dust settles.

And a constant thread running through all these changes, and even accelerating them, is the increasing exposure of the everyday Kenyan through internet connectivity to the outside world, raising their expectations of their aspirations, leaders and country.

The history of the world is peppered with examples of the violent conflict between those seeking to maintain the status quo and those looking to overturn it, in response to new realities.

With the benefit of hindsight we wonder why the key players of the time did not see the oncoming upheavals, whose signs were there for everyone to see, and maybe avert disaster?

Easier said than done.

"When you are in the thick of things, multiple variables and actors at play and fighting for survival, the big picture, the long view, even legacy are abstract concepts....

Kenya is staring into the abyss. For theirs and all our sakes we hope level headed minds prevail to pull them back from the edge.