Economy – Oulanyah Right On Strategic State Interest [editorial]

The deputy speaker of Parliament, Jacob Oulanyah, returned to the news last week, after a working visit to Europe.

Among other things, Oulanyah criticised the current economic order, arguing that over-liberalisation was hurting the chances of economic transformation of Ugandans. He argues that key sectors are dominated by foreigners, who exploit the local population. Oulanyah’s economic ‘theory’ is worth reflecting on, critically.

Not many people will be ready to blame the Museveni government for buying – hook, line and sinker – the aice of the IMF and World Bank, shortly after coming to power. The economy had collapsed and those who paid the piper rightly called the shots to usher in some stability. But decades later, the country needs to reexamine the decisions that were taken and devise ways to mitigate some of the negative outcomes.

A major feature of economic liberalisation in Uganda involved the sale of state enterprises that were supposed to ensure provision of basic services to Ugandans. For the larger part, this meant that the government tended to concentrate on providing an enabling environment, while the private sector drove the economy forward.

However, in a country where the greater majority of the population is barely integrated in the formal economy, the idea that private capital alone will spur inclusive development is inherently suspect. What it will almost certainly do is to deliver growth. For while private capital’s responsibility is to pursue profit, the public sector ethos should be underpinned by a resolve to serve the interests of the citizenry.

It is unimaginable that what Oulanyah wants is to renationalise the economy. What would be feasible is for the government to maintain a strategic interest in key service sectors such as banking and agriculture. Many of the major economies – whether the USA or the Asian Tigers – developed, even thrive, on the back of strategic investment by the state, alongside the markets.

Besides that, the government needs to revive its floundering regulatory infrastructure. Liberalising underdeveloped, imperfect markets – with the most imperfect regulation by the state – will not deliver the greatest good for the greater majority of Ugandans.

Source : The Observer

Leave a Reply


Global Markets Sluggish Wednesday

Asian markets were mixed Wednesday as optimism over a potential coronavirus vaccine earlier this week steadily begins to fade. The Nikkei index in Tokyo gained nearly 162 points to finish 0.7% higher, while Sydney’s S&P/ASX, the KOSPI in Seoul and Taiwan’s TSEC index had all earned 0.4% by late afternoon. Hong Kong and Shanghai were […]

Asian, European Markets Begin Week with Significant Gains

Asian markets are on the rise Monday as more and more nations continue to slowly emerge from the lockdowns imposed to halt the coronavirus pandemic. Tokyo’s Nikkei index closed 0.4% higher, despite news earlier in the day that Japan had technically fallen into recession for the first time since 2010 after two straight quarters of […]