UPC STATEMENT ON THE WORLD FINANCIAL CRISIS
Last updated : 04 Oct 2008, Kampala
UGANDA PEOPLES CONGRESS
NATIONAL SECRETARIATPLOT 10, KAMPALA ROAD, UGANDA HOUSE,
P.O.BOX 37047, KAMPALA PHONE/FAX:+256-41-236748
THE WORLD FINANCIAL CRISIS
As you know, the leading Western economic powers especially America and
countries in Western Europe are in the deep of a financial crisis that has far
reaching consequences for the whole world. Big merchant banks, insurance
companies and associated companies are collapsing every day, literary crumbling
like a pack of cards. People who borrow to finance home purchases are unable to
pay. There is a growing global credit crunch.
The government of Uganda has watched these worrying economic trends, which
started with astronomical increases in the prices of fuel and food, with an
aloof attitude. Indeed President Museveni celebrated the rise in food prices
arguing that Uganda farmers would reap high prices. He did not know that the
increase in prices of oil and food would trigger a general rise in the cost of
living and lead to the current 14% p.a. inflation. Uganda peasants have yet to
benefit from the increase in food prices. Instead they are the victims of high
inflation and unbearable cost of living.
The financial meltdown in the United States of America and Europe is not
accidental or unforeseen. It is the result of their governments' abandonment of
basic economic planning and regulation to the altar of a free market. It is
capitalism run amock. With the collapse of socialism in the 1990, the promoters
of the unregulated market had all the ammunition to push for the removal of any
regulation of the excesses of the free market.
The result was that what were called Smart Chief Executives in the financial
industry resorted to maximizing returns on investment not in production of
actual goods but in the manufacture of financial instruments that were traded
in primary and secondary markets. A house mortgage by banks, became tradable
commercial papers for speculative trading by investment and merchant banks,
insurance companies and other smart dealers. With time the layers of
transactions, projects and interest based on few physical assets (houses)
became unsustainable. The day of reckoning had come.
With the liberalization of the Uganda economy, which effectively meant
privitisation of state enterprises, retrenchment of public servants leading to
massive unemployment and out sourcing of work ordinarily done cheaply by public
servants. Uganda joined the free world of smart investors or speculators. The
people who have amassed wealth in Yoweri Museveni's regime are not the
producers of real wealth but the smart dealers and the corrupt who supply to
government and its agencies at exaggerated prices and then speculate in real
estate diving prices of land especially in Kampala to levels beyond the reach
of the working people. NSSF has joined this property speculation.
The working people who have been pushed to the wall, have now been enticed by
the basically unregulated banking industry, especially the ever mushrooming
micro credit institutions to borrow to acquire homes and several times for
ostentations consumption (including lavish weddings) in imitations of the
dealers. It is only a question of time when large scale defaults will lead to
an unprecedented credit crunch in Uganda. The earlier economic boom under the
NRM ended with the collapse of Tefee Bank, Greenland Bank, International Credit
Bank, Cooperative Bank, Trust Bank, and the near collapse of Uganda Commercial
Bank and Uganda Development Bank.
The Uganda Peoples Congress as a social democratic Party firmly believes that
the strength of an economy is in the quality and quantity of its production of
material goods, the quality and quantity of its work force and how the income
derived from such production is distributed. While free enterprise should be
encouraged to free up and utilize the competitive energies of all productive
people, there must be safeguards and regulations to ensure that competition
does not turn into corrupt speculation and exploitation of workers and
consumers. This is the thrust of our economic and social philosophy.
To day we are seeing the US government feverishly intervening in the market to
save America's mortgage, banks and insurance companies from the clutches of
Wall Street. This is what the NRM government should be prepared to do to save
our peasants and workers from the so called unregulated investors and smart
businessmen, read conmen. In May 1969, UPC intervened in the market to save
Uganda's interest, the world condemned UPC then and UPC was overthrown with the
help of the British government of the day. Today, George Bush and Gordon Brown
have realized that nationalization as a government intervention measure is a
necessary action in their present circumstances to save the world collapsing
economy. UPC has been vindicated.
The UPC calls upon the people of Uganda to examine the economic realities of
our country and demand a return to proper economic management, away from
excessive consumerism and unregulated credit that is bound to lead to economic
ruin. Since the NRM government has demonstrated utter inability to change the
economic course of this country, the UPC calls upon the people of Uganda to
support it in its call for economic reform. FOR GOD AND MY COUNTRY
CHRIS OPOKA-OKUMU
ASSISTANT SECRETARY GENERAL
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