I argued
last week that there is a small but very vocal group of Ugandans who have taken
their legitimate anger against the regime of Yoweri Museveni into a
condemnation of the Ugandan society generally. This trend is beneficial to
Museveni and company because a cynical political class that despises its own
people cannot be a vehicle for progressive change. This lesson was vividly
brought to me during a lunch discussion with a Western diplomat about our
nations major challenges.
I argued in
that discussion that Uganda has registered significant positive change in the
economic realm over the last 20 years. This has produced a fast growing economy
and with it a fairly large educated middleclass that can be harnessed to
provide the necessary software for change. Yet a section of the Ugandan elite
at the lunch discussion could not respond to the substance of this argument.
Instead, it responded by attacking my moral character accusing me of selling
out to Museveni. This blackmail has become effective. I have met many people
who are afraid to take particular positions in public debate for fear of being misunderstood.
One of
Musevenis gravest failures has been his inability to recognise the talent and
ingenuity of Ugandans; and I wonder how he hopes to successfully lead people he
despises. Sadly, a section of his opponents seem to share his disdain for
Ugandans; and I marvel at the similarity. Museveni has spent his presidency
berating against indigenous Ugandans for lacking entrepreneurial talent. He has
thus been giving public land and taxpayers money for free to Indians and
Europeans.
These
actions beg the question: if foreigners are so talented, why do they need favours
given at a Ugandan taxpayers expense to succeed in business? Take Mehta and
Madhivan: the factory-gate price of a tonne of sugar at both Kakira and Lugazi
is US$ 750. Yet a tonne of imported sugar from Brazil arrives (Cost, Insurance
and Freight) in Kampala at US$ 325. Government imposes a tax of US$ 400 per
tonne to make Kakira and Lugazi competitive. Ugandans subsidise Mehta and
Madhivan to remain in business.
Yet although
Musevenis racial undertones can sometimes be blinding, we should not think that
he is motivated entirely by racism even though his personal racial inferiority
complex plays a part in his statements. Rather, his opposition to the emergence
of an indigenous business class is largely a function of his politics.
Since the
late 1990s, Museveni has consistently taken political decisions to undermine
the emergence of a strong indigenous business class, a reversal of his efforts
in the early 1990s to actually create one. He thus supported the collapse of
Greenland Group, the Kato family empire, John Katuramus Give and Take, Sembule
Group etc. To achieve this objective, he has always used legitimate economic
arguments to mask his political motives. For we must remember that all of these
people made serious business errors out of greed, ignorance or incompetence
that justified state action or inaction leading to their collapse.
The collapse
of indigenous owned business houses was supported by the West, World Bank and
IMF, Museveni and the current vocal group that opposes him. Yet we have seen
Western governments prop their own companies that made similar errors instead
of letting them go under. The long term effect of letting indigenous owned companies
in Uganda buckle was to stifle the emergence of a sizeable indigenous private
enterprise class that can be independent of state patronage.
This
strategy is politically significant. It shows that Museveni is afraid that a
successful indigenous business class (Marxists call it a national bourgeois)
can become a centre of opposition to his politics. It is therefore no
coincidence that he began disbanding them after 1996 when he began his project
to become a presidential monarch. By financing his opponents, a local business
class can change rulers. Museveni wants a private sector that is either
dependant on him personally for its success or is politically removed from
Ugandan politics to pose him a political threat. He can use such a pliant
business class to finance his politics.
This
explains why the largest number of beneficiaries of money and land give away
bonanzas of the last ten years has been non-indigenous businessmen. By
enriching only non indigenous capital, Museveni has created political safety
for himself. He knows they are politically impotent; if they disagreed with his
economic policies, the best they can do is to lobby him for favours or bribe
his officials for individual exceptions to the overall bad policy environment.
Alternatively, they can stay and suffer the costs of bad policy or in mute
despair, they can leave the country. But they cannot fight back. Why?
Museveni
understands that such a racially alien business class has no capacity to
transform an economic policy disagreement into a political disagreement. This
is because it lacks the necessary social ties with indigenous social groups to
organise a mass political base for its economic agenda. Consequently, rather
than confront the state, it can only work around it by seeking particularistic
favours. This promotes the personalisation of decision making and with it,
corruption.
It is this
fact that should help us understand why land and money give away bonanzas have
been done at the behest of the president personally rather than as public
policies pursued by the institutions of state in Uganda. The aim is to stifle
the growth of an independent private sector generally yet promote the growth of
particular individual businesses that are convenient to the government. The
result: failure to develop a locally rooted business class that can leverage
politics to force state policy to aggressively pursue a strategy of capitalist
transformation.
I must admit
that Museveni has at times supported (or appeared to support) some indigenous
Ugandans with tax rebates or cheap capital after 1998. James Mulwana and Hassan
Basajabalaba are examples. But note that his approach has been consistent i.e.
supporting specific individuals rather than indigenous capital generally. Yet
even here, his support has been largely aimed at keeping such individuals on
the life-support machine of state patronage rather than to allow them to become
viable and successful business groups.
- Continues
next week.
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