When neo-liberalism turned Ugandans into moving corpses: They died before leaving for the Middle East: Uganda's economy grows amid inflation - World Bank

 

They died before leaving for the Middle East

https://observer.ug/index.php/viewpoint/80488-they-died-before-leaving-for-the-middle-east

February 7, 2024

Written by Yusuf Sserunkuma

It was the 2022 World Cup that intensely put the Middle East on the spot over the conditions of migrant workers.

In the build-up to the World Cup, more than 6,500 workers were believed to have died in Qatar under circumstances directly related to working conditions. While western racism formed a core part of the chants for boycott, the terrible working conditions and deaths were an undeniable fact.

For over decade now, we have not had a month go by without horrifying stories of workers’ plight in the Middle East: beatings, enslavement, confiscation of travel documents, death, and deaths, and more recently, resales like in the old days of chattel slavery.

Three things normally happen when these horrifying stories hit our waves: (a) we demand that government evacuates the victims, dead or alive. Sometimes, we challenge government to negotiate directly with governments in the Middle East. Never have these calls been heeded.

(b) We blast labour exporters for being so selfish about their profits, and insensitive about working conditions, and (c) we castigate the Arabs for being racist and inhumane. While I agree with all these reflexes—yes, reflexes—my contention is that this is often simply scratching the surface.

 

Look, that Arabs are racist is entirely undeniable, and is not about to change – especially towards our often pale, malnourished and mildly educated labour exports. We are not exporting specialists. That labour exporters prioritise profits – and many of them are fake – is also undeniable, and might not change soon under the present conditions of fakeness in neoliberal Uganda. Finally, if this government cannot guarantee safety and good working conditions for Ugandans in Uganda, what weird expectations can one have for those working abroad.

BETWEEN A ROCK AND A HARD PLACE

On the one hand, it is important to note that the stories of pain and deaths do not define the entire spectrum of work and remuneration in the Middle East.

True, there is work in the Middle East — especially Saudi Arabia and Qatar — and the remuneration is fairly better than what is common in our foreign-dominated extractive outpost often humoured as “the Ugandan economy.”

Indeed, although figures don’t precisely indicate from which destination the money comes, but working abroad allegedly beat coffee sales in forex revenue in the past years. Middle Eastern labourers contribute a significant chunk. (That remittances beat coffee in annual revenue is a saddening development if true, and directly explain the Middle Eastern labour predicament).

But we need to ask: why are Ugandans leaving for work in the Middle East en masse – in menial tasks, as maids, janitors, untrained security guards, even those with university degrees and other apprenticed skills? Note that the emoluments aren’t outstanding either. It is normally between Shs 800,000 to Shs 1.2 million – which is $250 and $300. Why is our economy unable to create employment offering these fairly small salaries?

In an online discussion recently, a rescuer of labour victims from the Middle East noted that just a couple of months after being rescued, one finds the “ex-victim” processing documents to return to the Middle East. And their undeniable contention: “what is here for me?”

About two years ago, opposition leader, Bobi Wine met the same challenge when he intensified campaigns to return victims from the Middle East to Uganda. He could not answer the question: “To what are you returning them to in Uganda?”

One would not miss the irony at Entebbe Airport during the Bobi Wine rescues: Ten girls would be at the arrivals after being rescued, while another 500 is entering the airport departing to the same destination, aboard the same flight that just returned the rescued girls.

COUNTRY OF WALKING DEAD

I have argued elsewhere that a dead migrant worker dies many times, and has many killers. The first and major death happens at home. In Uganda, all of us are nothing but walking zombies. The conditions of abject poverty, deprivation, and hopelessness, dispossession—sadly, imposed upon us by the state — have forced many young men and women out of Uganda.

Again, no one, I repeat, no one wants to leave their homeland into some racist countries abroad, if it were not for the dire conditions in which they live. See, just one example – paraphrasing Prof. Ezra Suruma – with interest rates averaging at 34 per cent and with taxes imposed even on loans, many creative and innovative young Ugandan have had their businesses die in one year.

Even so-called tycoons and thriving businessperson are barely surviving. That is because 34 per cent is absolute theft. Ugandan banks keep many ordinary Ugandans in the informal sector away, and thus this so-called economy has nothing to offer except extraction. No wonder the ministry of Health would announce that 14 million Ugandans are mentally ill.

It is the economy. This deprivation and humiliation is the first moment of death. As the girls have often asked, “what is here for me?” Sadly, it is the least documented and least discussed. These walking zombies of migrant workers then die a second death on the road.

They are humiliated processing travel documents and related fees and protocols. I have seen adult men and women being chased and caned by recruiting agencies like one hunting down a snake. This humiliation traumatises and kills.

The final moment of death happens at the workstation: battered, denied food, racialised or resold. They die in the Middle East or are returned home to die.

My contention is this, all these different encounters of humiliation and death ought to be discussed exhaustively, and our focus as activists ought to be at the root causes, the first deaths.

That is because, we ought to agree that for many migrant workers — by far the majority — the Middle East has actually been their resurrection – having died in Uganda before departure.

yusufkajura@gmail.com

The author is a political theorist based at Makerere University.

 

Uganda's economy grows amid inflation - World Bank

 https://observer.ug/index.php/businessnews/80529-uganda-s-economy-grows-amid-inflation-world-bank 

February 12, 2024

Written by OUR REPORTER

In its latest economic update, the World Bank reports that Uganda's real gross domestic product (GDP) growth increased from 4.6 per cent in financial year 2022 to 5.2 per cent in financial year 2023, signaling a steady economic recovery amidst persisting domestic challenges and a complex global environment.

This growth was largely driven by the services sector, which accounted for half of this GDP increase, led by professional, administrative, and accommodation and food services.

The agricultural sector also witnessed a 4.8 per cent growth, spurred by livestock and fishing activities, although crop production suffered due to irregular rainfall.

Despite these positive developments, the industrial sector experienced a slowdown, growing only by 3.5 per cent, primarily due to a decline in mining and quarrying activities. High-frequency indicators, however, predict that the economic activity will remain robust towards the end of the calendar year.

Inflation, a critical concern for the economy, saw a significant increase from 3.7 per cent in financial year 2022 to 8.8 per cent in financial year 2023, surpassing the central bank's target of 5 per cent. This was influenced by both global and domestic factors, including rising prices for nonfood goods, which accounted for 46 per cent of the total inflation increase.

Food services also contributed to the economic growth

However, tighter monetary policies implemented by the government have started to ease inflationary pressures, with the rate dropping to 2.6 per cent by November 2023.

The Ugandan economy has also benefited from strong inflows of Foreign Direct Investment (FDI), particularly in the oil and gas sector, which have helped finance a sizable current-account deficit of 7.9 per cent of GDP. Despite a surge in imports, the current-account deficit remained relatively stable due to a boost in exports and tourism inflows.

The government's fiscal management also showed improvement, with the central government’s fiscal deficit decreasing to 5.6 per cent of GDP in financial year 2023 from 7.4 per cent the previous year. Increased tax collection efficiency contributed to this achievement, with revenue from taxes like pay-as-you-earn, rental income, and casino taxes offsetting declines in corporate income and withholding taxes.

However, challenges remain in the realm of private sector credit growth, which slowed down due to the central bank's monetary tightening and rising cost of credit. While there was an increase in personal loans and commercial lending to specific sectors, the slower overall credit growth raises concerns about potential impacts on economic expansion.

In conclusion, Uganda's economy demonstrates resilience and potential for further growth, but it continues to navigate a path fraught with both domestic execution challenges and external economic shocks.

The focus on developing megaprojects and managing fiscal deficits, coupled with efforts to stabilize inflation and encourage private sector growth, will be crucial in shaping the country's economic trajectory in the coming years.

 

RAMATHAN GGOOBI

Why GDP is your everyday life

https://observer.ug/index.php/viewpoint/80544-why-gdp-is-your-everyday-life 

February 14, 2024

Written by RAMATHAN GGOOBI

 

Many people, especially non-economists, often wonder why economists emphasise GDP more than any other economic concept.

It is not uncommon to hear people wondering, “Are we going to eat GDP?”

During my days as a teacher of economics at university, one of my favourite topics was, “why economists care about GDP”. I approached my teaching of this topic by asking my students to mention what they cared about most in life.

They often cited a “good” job paying, a “good” wage, availability of life-sustaining goods and services at affordable prices, among others. Some cited owning a nice house, a cool car, and all sorts of material goods. Others mentioned family and friends, good healthcare, quality education, a clean environment, and so on.

Then, I would intervene by summarising the long list of things we all, human beings, care about using one word – HAPPINESS. I would proceed to tell my students that happiness generally depends on three key things; freedom of choice, self-esteem, and income. No human being with those three things has reported unhappiness.

Freedom of choice touches many things, including basic ones like; the type of meal one may afford or not, as well as being free from misery, ignorance, and dogmatic beliefs. Self-esteem is about one feeling ‘complete’ as a person, or having a sense of respect, recognition and not have a feeling of being used as a tool by others for their own ends.

For income or money, we all know how important it is. It is the grease that lubricates the wheels of our daily lives by enabling us to meet the basic needs of life in a sustainable way and with reasonable flexibility.

WHAT IS GDP?

The reason economists emphasise GDP is mainly that it is highly correlated with these three goals of humanity. Despite its inherent shortcomings, GDP is critical in meeting all of them, and below is how.

For starters, economists use the acronym GDP (gross domestic product) to mean the monetary value of final goods and services produced in a country, usually in a year. When GDP grows, a society is able to find ways to produce more of the goods and services that its citizens need.

 

We all need good health, a house to live in, education for our children or ourselves, good food, peace and security, a healthy environment, social connections and respect, and generally a life full of happiness. All these things depend primarily on having own money. Often people do not derive as much happiness from free money or dependency as they do from earned income.

This is why we wake up every morning and jump into taxi, onto a boda-boda or bicycle, or a personal car to rush to the city to work or trade. Others walk to their gardens and farms to produce. We work because we want to access goods and services that make life meaningful and enjoyable to live. Whatever we produce from our daily sweat is what economists condense into an abstract monetary measure called GDP.

Have a look around yourself right now. Many of the things you see are products that were produced by someone so that you can use them. Let’s start with that shirt/dress you are wearing, the device/sheet you are using to read this, the electricity that powers the device, the chair you’re sitting on, the roof over your head, the car, bus, taxi or bicycle you took to get to where you are, the road on which you travelled to where you are, the food you had this morning, the medication you will receive when you fall sick and the list goes on.

Yes; you actually ‘eat’ peace!

At some point in the past, many of these products were not available. Some were not available even just last year, others many years ago. Whereas GDP is the abstract measure of all these goods and services, the abstraction should not make us lose the mental connection to these goods and services we often take for granted when we finally secure them.

For example, I have often heard people, while debating the budget that allocates money for security, ask; “Are we going to eat peace/security?” I often quietly answer them in my mind, “Yes; you actually ‘eat’ peace or security.”

If you doubt this, let one bullet be shot near a restaurant and you see how everyone will abandon what they thought was more important — the pieces of chicken, beef and beer in front of them.

Most of the goods we often take for granted make more sense when we can’t find or afford them. That piece of soap at home, the light at night, the water running through the taps, that toilet paper roll, that food you can now afford to leave on the plate and trash away, the education you acquired to make you qualified to be (temporarily) unemployed but not unemployable, etc.

When we tell you that Uganda’s GDP has grown by 5.2% (like it did last year), we mean that the quality and availability of those goods and services to care about has increased. It means Uganda now has more food, more public infrastructure (paved roads, electricity, internet cables etc.), or generally more money for Ugandans.

 

Therefore, when the government says GDP has grown, we mean that your life has been made better off by producing more of the goods and services that sustain it. I see many Ugandans and other global citizens coveting the life in America or Europe. Why? It is mainly because those developed economies have higher GDP and GDP per capita that enable most of the citizens to have higher incomes, wider freedom of choice, and higher self-esteem.

For example, America’s higher GDP per capita (of over $70,000 or Shs 266 million) enables American mothers to afford their children more freedom to choose the meals they want to have, more clothes, and other stuff that make life more enjoyable.

GDP AND NON-MATERIAL WELLBEING

Therefore, all we need to do to enable Ugandans afford a standard of living equivalent or even higher than what Americans enjoy, is to accelerate our GDP growth such that our GDP per capita could expand from the current $1,067 (or Shs 4 million).

By the way, the freedom of choice on account of the level of country’s GDP per capita is not limited to material things. It also impacts choices such as marriage partners. Most marriages in Africa are usually based on societal biases such as; tribe, religion or socio- economic status.

This is often associated with low levels of education and generally poorer societies (and thus low GDP). As societies accumulate GDP, their populations tend to get liberated from such biases. Education, higher incomes, and thus improved standards of life (you may call it ‘family GDP’) tend to make societies more tolerant and standardised.

With higher GDP, even the self-esteem of citizens gets enhanced. Psychologists tell us that self-esteem may be affected by materialistic indicators of self-worth, like the kind of car one drives, the school your kids attend, the size of one’s house, or one’s title at work or in society. This is where GDP comes in.

FROM GDP GROWTH TO TRANSFORMATION

So, higher GDP implies higher wages, higher rent, higher interest earned on savings, and higher profits made in business. Public servants in Uganda, particularly those in the lower echelons, earn low wages. Some have for years been taking industrial action to force the government to raise their salaries and allowances.

It is not the government’s intention to pay low wages. It is on the account of low government revenue, yet the requirements for the little money are may. The solution to this will be increasing the GDP such that tax revenue increases to enable the government pay higher salaries. There are no shortcuts.

As our GDP rises, incomes earned by all economic agents will increase, thereby creating more GDP in turn. The cycle will continue until the country affords all the things people agitate for.

Since GDP was devised in 1937, it has been held aloft as the best barometer by which a nation’s economic success or failure – and that of its people – is measured. Despite its known limitations, GDP is considered to be the most accurate indicator of a country’s economic activity; a measure of material well-being.

Our current strategy is pursuing both GDP growth and socio-economic transformation. In the latter, we intend to move the economy from an extractive, subsistence-based economy to a modern fully-monetised economy.

The target is to get more Ugandans who are currently stuck in subsistence to move into activities that earn them income. Therefore, next time you hear H.E. the President or my minister telling you how GDP or GDP per capita has grown, please know that by extension, they are telling you that your material well-being or that of your neighbour is getting better.

The writer is an economist and the permanent secretary ministry of Finance and Secretary to Treasury