DUBAI, A USEFUL TEMPLATE

Last week Dubai hosted the third Government Summit, a forum where it interacts with businessmen in order to improve services and encourage new investment.

At the summit Dubai outlined an ambitious project to make interaction between government and the people seamless by 2021.

To illustrate the vision, the crown prince of Dubai Sheikh Hamdan Bin Mohammad Bin Rashid Al Maktoum, showed a video of a lady tourist arriving in Dubai, using messages off off a smart watch being, welcomed to the Emirates, informed that her residence permit has been renewed and of the traffic conditions outside and ow to get to her apartment quicker.

In Uganda we daren't think that far ahead, not to mention the convenience of visitors. The comfort of the everyday man is the furthest from our mind when we are still struggling with the basics of getting good health care, clean water, basic education among other things taken for granted by the residents of Dubai.

Its a distant memory or just the stuff of myth, the story that as recently as 1980 Dubai was a one street town surrounded by desolate desert and blanketed in oppressive heat. Now of course it is a logistical hub, financial capital and entertainment Mecca that shifts more travelers through its revolving doors in a month than East Africa does in a year or two.

At the heart of the transformation is a ruling family that had a vision for the country that would outlive its oil reserves. As it is now oil revenues account for less than a tenth of GDP and are anticipated to run out within the next ten years or so.

To push their dream they were lacking the most important element -- people. As it is now Dubai's population is about two million people, or the daytime population of Kampala, of whom almost two-thirds are foreigners.

They got around that problem by hiring expertise from abroad while embarking on an ambitious program to only upgrade their education system, sent their youth abroad to study, but also ensure the local Emirati understudy the expats with a view to replacing them eventually.

The skilling of locals is a political necessity but truth be told the execution of the Al Maktoum's vision was done by hired hands who generated the economic activity that allows even the locals to enjoy an enviable standard of living.

Moral of the story is, without people you have nothing.

Last week too we saw the release of O-level results. More children are seating exams annually, distinctions are being achieved like they are going out of fashion and for some of us from a bygone era we can't imagine the enormous pressure being brought to bear on these small minds in search of ever better results.

Our education system is designed to create the army of workers needed for an industrial society -- able to read, write, count and respect hierarchical authority. By as we have done with mobile phones isn't there a possibility that we will be forced to vault the Industrial Age and land squarely in the Information Age? And what will become of our industrial-age-exam shattering stars of today? Won't they find they enter a job market for which their skills are misplaced or worse obsolete?

We can talk all we want about infrastructure, but if we don't have the people to leverage this infrastructure we are on a fool's errand.

It is encouraging that Uganda is at the forefront with Kenya and Rwanda to ease the restrictions on the movement of labour, this will help us bridge our own deficiencies while allowing our excess capacity to find a home elsewhere. Tanzania's intransigence on this will come back to bight them.

Countries like Dubai and Singapore have shown that a focus on raising the level of human resource more than an abundance of natural resources is the key to sustainable development.

We of course have committed hundreds of billions to health and education, and for an observer of this country over the last few decades improvements are visible, unfortunately they are not equitably distributed.

But even worse, endemic corruption has made it such that even ever increasing amounts channelled into social services do not guarantee a comparable improvement in service delivery.

Unfortunately the better off take their children to good schools and have them treated in quality hospitals, this alone will ensure a perpetuation of the current income and wealth inequalities into the future.

The economics of a better human resource cannot be overemphasized and even if political expediency does not recognize the benefits, the long term ramifications will inevitably spill over into the politics of the country with disastrous results.

DONORS ARE BETWEEN A ROCK AND A HARD PLACE

Following President Yoweri Museveni’s signing of the Anti-Homosexuality law donor countries were falling over themselves to cut and re-evaluate their aid programs with Uganda in protest.

The debate on whether he should have signed or not will probably continue until the cows come home but you have to sympathise with the donor governments.

Aid is packaged as help from external donors to bridge our own financing gaps. So for instance we don’t raise enough tax to finance our health or education needs, the donors cover the deficit so we can be healthier and our children go to school and they can they can show up their benevolence to their constituents.

"What for obvious reasons is not highlighted, is that aid is used to maintain influence over recipient nations, if we needed any proof of this the righteous indignation of the last week speaks volumes in this direction....

It’s a long story but this is how the aid industry works in a nut shell. Governments decide they will allocate a certain percentage of their budgets to aid, they dish out this money according to recipient nations budgetary or project needs.

Then things get interesting.

According to statistics from the Organisation for Economic Cooperation and Development (OECD) donor countries retain as much as nine in every ten dollars in aid disbursed in the case of Greece. Japan comes in as the country that retains least aid at seven percent.

The aid that stays in donor countries is mainly spent on administration – hiring and procurement, student scholarships, refugee costs, development awareness activities and debt relief.

One need not wonder about the back scratching that takes place in awarding tenders and employment during this process. So there is a local constituency to be serviced with this aid money at home.

"In the recipient country a significant amount goes on administrative costs, meaning fat salaries and hardship allowances for aid workers, both local and expatriate and brand new four wheel drives to whiz around the ”pot hole” ridden Kololo avenues....

So there are a lot of voters in the donor communities who would not appreciate rocking the aid gravy train.

In the recipient countries too, contrary to the analogy of leaders roaming foreign capitals begging bowl in hand often times this aid is actually unsolicited and woe onto the country that deigns to refuse the aid.

A few years ago Uganda was criticised for refusing more aid to the health sector. Uganda argued that the amount of aid being proposed would disrupt the delicate macro-economic balance of the country negating any gains the money may have brought. Government officials were vilified as baby killers and worse.

Beyond the altruist function of helping government pay for services it can’t handle on its own, aid is also a tool of influence with poor countries.

A threat to pull the plug on aid or even the promise of more aid in the future is often enough to keep the political elite of these poor country dancing to the pipers tune...

And this is where the donors probably need our sympathy, where you can see their dilemma.

On the one hand their moral rectitude dictates that they should deprive countries who do not live up to their high standards of good and bad, while on the other hand to make them pariahs would be to forgo the aforementioned influence.

No country is inconsequential.

When George W. Bush cobbled a coalition of the willing to attack Iraq he roped in the obscure island republic of Palau to make up the numbers.

Donor nations are also reluctant to sever engagement with developing nations because no sooner have they rolled back their engagement than another donor nation jumps in to fill the gap – and we are not talking about China or India.

Images of diseased, malnourished African children on foreign TV are useful to justify to their tax payers deploying their money to help human beings in need, the  real reason however is often to maintain influence over foreign nations for strategic reasons – political and commercial.

The current standoff will put this thesis to the test.

"If they are truly appalled by our lack of respect for human rights and feel this overrides any other of their interests there will be a scramble for exits, but if as suggested, there is more at stake to them, they will huff and puff for a little while longer before settling down to the serious business of furthering their own national interests....

HAS OUR EDUCATION SYSTEM OUTLIVED ITS USEFULNESS?

This week saw the release of O-Level results with the attendant drama and fanfare,

We n the media went to great lengths to analyse the results regaling our readers with top students, schools and district as well as a liberal offerings of candidate testimonies and ambitions. It all made for good reading – depending on who you were, and probably inspired a few prospective candidates.

For some of us who went to school in a gone bye era it never ceases to amaze at the way these k ids are churning out top marks like clock work. Whereas only seven in a hundred candidates actually got a division ones the proliferation of the kids maxing out with eight points in eight subjects continues to grow every year. Twenty years ago eight-in-eight students were an aberration.

The explosion in enrolment numbers up and down the school system, the proliferation of private schools and the greater affluence of some parents could be the causes of this super achievement relative to a few years ago.

On paper we are churning out “brighter” students but one has to wonder.

Our education system is a relic of the colonial era, where the British wanted to provide the bare essentials of reading, writing and counting skills so that locals can help run the empire. It was more cost effective – it still is, to have locals run some menial tasks like push paper and execute basic instructions, than to import higher wage labour.

We have added a few subjects but the heavy emphasis on theory remains.

This kind of education is all very nice for a situation where there are rigid hierarchical organisations, where the boss knows everything and the rest are awaiting his command. But the world is increasingly flattening out with key decisions being made at every level of organisation.  The boss’ role increasingly is that of creating the environment for these multitude of decisions to be made effectively and efficiently.

Related to that, many layers of work are being collapsed into fewer and fewer positions with greater automation and computerisation.

So for example the secretary whose basic function was to type and gatekeep for the boss is a dieing breed. For starters the pool of secretaries at the bosses’ beck and call are no more. The bosses type their own letters, make their own calls and pour their own tea.

In the newspaper industry a whole layer of workers -- typesetters, proofreaders and darkroom staff were swept away with the introduction of computers.

Increased automation points to one thing that the acquisition information is not critical – who needs the multiplication tables when they are using calculators in primary school, but how you apply that information.

The truth is, it has always been like that, but the increased numbers being churned out of our schools and the resultant competition for jobs and in the general market place, means that everybody “knows” so what sets the best apart from the rest is how best they can apply what they know?

An education system which continues to emphasis rote learning therefore may not be doing our kids a favour.

We can argue about the practicality of the curriculum but the system’s failure goes beyond that.

In colonial Africa there were schools for the whites and schools for the Africans. They all learnt how to read, write and count. Apart from a presumably better quality of teachers in the white schools, they was also strong attention paid to sport and extra-curricular activities. In addition to imparting information these schools cultivated initiative, social and leadership skills. The system was designed to produce leaders not just paper pushers. When the colonialists shipped out and Africans started to file into these schools it is not surprising that the future black leaders came from these same schools.

This dichotomy persists all around the world and is a good indicator of who will lead and who will be led.

What our schools are doing now, with exams as an end rather than a means to an end, is regressing to the colonial black schools model.

But what do our school owners care? As long as they are making their money and the education ministry is not enforcing standards, they are ok.

ON THE RIGHT WAY FOR GOVERNMENT INTERVENTIONS

It all seems very easy. If government is so keen on growing the economy why doesn’t it get into the business of doing business itself? After all it has sacks of money at its disposal?

If only life was so simple.

Last week President Yoweri Museveni commissioned a tomato processing plant in Nakaseke and launched a special economic zone in Kaweweta, also in Nakaseke. Almost at the same time the director of the Presidential Initiative on Banana Industrial Development (PIBID), Reverend Florence Muranga was being detained in parliament for not cooperating with the Public Accounts Committee (PAC), which was looking into the accounts of the project.

And in the letters page of the New Vision someone lamented the tax incentives BIDCO got to set up a palm oil industry on Kalangala island.

All these initiatives have two things in common they are all agro-based projects and they are being supported by government. What seems to determine the success rate is the nature of government involvement.

For two of the projects – the Nakaseke initiatives, it is too early to judge their results but for the banana project and BIDCO sufficient water has gone under the bridge to make a qualified assessment of their success or lack of thereof.

"With the PIBID government decided to go it alone, staffing the project, financing research and bankrolling production. Eight years down the road and our super market shelves are not overflowing with its products. Or maybe they are still in development or their communications people are not doing their job....

BIDCO on the other hand, while braving sniping from the environmental lobby are single handedly lifting Kalangala into the formal economy, introducing farmers on the island to a new cash crop, providing market for their produce and yes their products are on our shelves.

A decade into the project and BIDCO have invested $150m, brought 20,000 acres under the crop, provide employment for about 40,000 directly and indirectly and have brought in additional $21m in taxes.

Government support in the project is in way of access to land, infrastructure development and some tax incentives that reflect the long term nature of the project.

The difference is as plain as night and day.

Where the government has identified credible investors, negotiated the support they will lend projects have more or less succeeded. But where government has jumped into the fray itself and tried to develop an industry the results have been dismal.

The old economists taught that there were three factors of production – land, capital and labour. This have to be manipulated for production to take place. Later the role of entrepreneurship and management, distinct from labour, was recognised as the missing ingredient in the equation. 

One reason government attempts at business collapse is because they are manned by technocrats.

A technocrat, unlike an entrepreneur needs the resources to be in place in order to start working. 

Often the technocrat has no sense of making a return on the capital that is entrusted to him, after all if the enterprise collapses he will be transferred to another enterprise. The entrepreneur, while he learns some of his best lessons from failure, needs minimal resources to kick off and will do everything to ensure the enterprise succeeds.

The urgency for job creation and economic growth is clear and present. Government needs to be thinking in terms of the most efficient deployment of the resources at its disposal – mostly capital and land and matching it with entrepreneurial and managerial capacity to get the desired outcome.

"The model that seems to pip all the rest is for government to identify projects with long term and far reaching benefits to the economy, attract investors foreign and local to these investments, mitigate away as much of the risk as is justifiable and let them run with the project....

During the privatisation process of the 1990s, quite a few projects fell through because government in trying to appease the locals was unwilling to make the necessary concessions to allow credible businessmen to take some of our derelict companies.

A case in point was the Coffee Marketing Board (CMB) whose key asset apart from the land on, which it stood was the roasting plant that could handle Uganda’s entire export crop of four million bags at the time. Government wanted to flog half the company off, valuing its assets at about $30m. 

Two rounds of tendering saw the leading offer—both times by Swiss coffee trading giant Sucafina, plummet from $8m to $4m. The plant probably rusted and was sold for scrap and the buildings were home to the ill-fated Tri-Star Apparel project, which was also bedevilled by poor design and management.

Nothing is perfect as even the best designed projects can fail, but the odds seem strongly in favour of a hands off approach to its partnerships with the private sector, the two projects in Nakaseke may, with time, confirm or disprove this thesis.