It would as though this "wise and clear lined leadership" is back to those "backward policies" of the backward regimes of Obote? 20 years later and millions killed in luwero and the great lakes only to realise that those backward chaps may have been doing something worthwhile after all?
What more shall he jettson off? I wonder?
gook
| Suruma calls for radical economic shift |
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TOUGH: Dr. Suruma |
|
The policy paper
appears to propose a return to a more interventionist model of macro-economic management.
The paper is under discussion at a high level. However, for the new proposals to be effectively implemented, the Government would need to jettison the Three Year
Budget Plan passed by Parliament last year. Suruma said existing economic policy needed revisiting.
“The laissez faire model is based on the belief that the Government should limit itself to ensuring a stable economic framework and public goods such as feeder roads, while leaving the peasants to fend for themselves by reacting to market incentives. By and large this is the model that we have been following and the productivity figures remain at the bottom of the world scale,” he writes.
Suruma is supportive of private outgrowers’ schemes but wants the next Budget to focus primarily on kick-starting
the agricultural sector by revitalising the cooperative sector. He said, “In order to reach the vast number of households today, the cooperative model is the correct approach.”
He proposed a major government drive in the next financial year to support cooperatives. He wants a farmers’ cooperative society formed at every sub-county and later at every parish; micro-finance institutions at every sub-country to finance inputs and seeds for these cooperatives; business training for them and construction by government of cooperative stories in all sub-counties.
The paper states that the ministries of agriculture and finance have been asked to calculate the cost of assistance to the Cooperative Movement. Suruma also argues that it is necessary to provide broader macro-economic support to cooperatives by ensuring that they have markets and a fair price for their produce.
The paper
says the government should ensure a stable market for farmers but does not specify how.
“A market must exist or be created to absorb the extra produce. It is also essential that prices do not collapse leaving them either the same or worse off,” he said.
“In consultation with relevant line ministries, we will be estimating the minimum breakeven prices for each crop for farmers to cover their cost of production and assessing policy implications,” he said.
Suruma indicates that transformation of agriculture will be his initial focus but he also proposes to tackle industrial and public sector development. Government will provide funding for research, development and pilot plants in key industrial sectors while the infrastructure needs to be developed, especially in the energy sector where Bujagali and Karuma dams need to be built.
“Ugandans will be asked to supplement both
equity and debt financing towards these key infrastructures”, he states. He also recommends that more competition should be introduced to the communication sector to reduce the cost of data transmission.
Suruma also proposedstrategies for “maintaining price stability”. He says that “efforts will be made to rationalise use of foreign exchange” as well as “promoting a favourable exchange rate”. He says that “the Bank of Uganda will be encouraged to work towards an exchange rate that is consistent with maximization of exports of Uganda”. It is not clear whether this means a higher or lower exchange rate than presently.
Government will also seek to reduce “High interest rates (that) continue to stifle investment in Uganda and to render Ugandan products less competitive”.
This will be achieved partly by promoting competition in the financial sector, channeling local borrowing and
foreign aid into productive priorities, and limiting government borrowing to productive areas.
Suruma also proposed government investment in the services sector to “provide additional employment opportunities and also provide a market fort the expanded production of agriculture and industry.”
To do this, government will organise construction projects in slum areas, sewage systems in mushrooming trade centres and increased tourism infrastructure.
Ends
Published on: Friday, 18th February, 2005 |
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