Economic policy keeps Museveni in West's favor

Since the end of the Cold War, Western nations have usually been quick to condemn African leaders who mess around with the fundamentals of democracy. Although Uganda has banned political-party activity for the past 14 years, President Yoweri Museveni is praised by Western politicians, including President Clinton, as one of the new breed of African leaders.

Mr. Museveni, formerly a firebrand socialist, has wholeheartedly embraced privatization of state-owned enterprises, encouraged foreign investment, and reduced trade tariffs. He has also championed a massive hydroelectric dam project on the Nile River - the largest foreign investment in East African history

And that is enough to win favor from Western diplomats. Many admit that they go somewhat easy on Mr. Museveni when it comes to upholding democracy and human rights since they're so fond of his liberal economic ways.

More leeway for Uganda?

"There may be a little more leeway granted him because the economic policies are in our judgment the correct policies," says a European diplomat.

Since embarking on its privatization and public-enterprise reform program in 1992, the government has privatized 62 state-owned companies, 20 of which were sold to foreign investors, according to a recent report by the World Bank.

In the next five years, Uganda plans to privatize another 39 industrial and commercial state-owned corporations, with assets topping $600 million and employing 23,000 people. These are mainly big utilities - telecommunications, electricity, water and sewerage - but also enterprises involved in transport, manufacturing, construction, agribusiness, tourism, and trade.

Those in favor of the privatization push breathed a sigh of relief last month after Musevini's no-party National Resistance Movement system received a 90 percent endorsement in a national referendum. The vote was considered as much a measure of Museveni's popularity as a referendum on political systems, so the result bodes well for his success in next year's presidential election, and the continuation of the privatization drive.

But critics say the West is guilty of double standards when it comes to Museveni, says Ali Wako, research and planning chairman for the multiparty referendum committee. "If you don't have political reform, how can you carry out economic reform?"

The biggest foreign investment in the works is a $450 million hydroelectric dam to be built along the Nile River by an American conglomerate, AES Corp. It is such a big deal that when Uganda's Parliament demanded a parliamentary investigation because of allegations of corruption and mismanagement of the project, outgoing American Ambassador Nancy Powell hinted that killing the power project would harm relations with the United States.

Nonetheless the privatization process has not been without its hitches. Until now, net proceeds from the sale of state-owned enterprises is just $69 million. Even the World Bank report on privatization in Uganda cites "inadequate legal and internal arrangements, ill-defined responsibilities and accountability, inappropriate divestiture procedures, lack of broad-based ownership, and lack of transparency in a number of transactions."

The Bank's solution: offer another $48.5 million to support the government in carrying out the rest of the privatization plan. This comes despite Uganda's rating as one of the world's most corrupt countries, according to Transparency International.

"The overall benefits of the privatization process to the economy are undeniable. In most cases, privatization led to increased output and efficiency, higher tax revenue, significant new investment and job creation," says the bank report.

Uganda's economic performance since Museveni took power in 1986 is often mentioned as evidence that the country is on the right track. Gross Domestic Product has grown on average 7 percent annually over the past 12 years, and 8 percent annually in the past five.

But a key fact often overlooked is that Uganda's economy was at an absolute standstill when Museveni took power in 1986. Despite all the growth, Uganda's real GDP has yet to reach the level of 1970, and remains one of the poorest countries in the world. Some 46 percent of people live below the poverty line.

But Museveni has "gotten a lot of mileage out of [his economic policies] and has done a lot of good for his people and his country," says another Western diplomat. "He has stabilized the country by and large, has brought some measure of economic development to a country that was sliding backwards, and has the freest press in the area."

Demands to end 'easy ride'

However, some in Uganda are starting to demand that the West stop giving Museveni such an easy ride.

"They have turned a blind eye to the politics because [Museveni]'s fallen in line on economics," says Denise Lifton of Foundation for Human Rights Initiative. "If by the wayside he happens to restrict political activity, oh well."

Says multiparty political activist Micheal Kaggwa: "When the international community praises Museveni for what they consider to be good performance especially in the economy, nobody comes out to say that foreigners are interfering in the internal affairs of Uganda. "But when the same international friends of ours point out some shortcomings ... then [Museveni's Movement] people are all up in arms about Uganda's sovereignty."

For the time being, the West tends to be sympathetic toward Uganda. "My country is against a one-party state , but we understand the circumstances under which the current system was adopted," says British Ambassador Tom Phillips. "We believe that Uganda is evolving towards genuinely including other political parties."

(c) Copyright 2000. The Christian Science Publishing Society