Comment on The Suruma Strategy
Dr. Ezra Suruam is the new Minister of Finance and as good leaders do he also came with his ideas of how to manage things. Since he is the Minister of Finance, he came up with some ideas of how to improve the peoples lives namely their livelihood. This is beyond any doubt a noble but not very uncommon idea of a Minister of Finance.
But is I assume that the Sunday Vision cites his ideas and argumentation correctly. At least he instead of M7 argues in real terms. I mean otherwise it would be too simple to achieve the goal to increase the nominal annual income of households, which according to M7 “should be measured in terms of cash earned instead of quantity produced per year”. Suruma instead argues in real terms: “He said it was better to maintain 200 cows rather than have 500 cows that are hard to feed during drought. He suggested that any extra cattle should be sold in order to raise household incomes” – I am baffled by so much insightful thoughts!
But let us turn to “The Suruma strategy”. I could have stopped reading when I reached the sentence “The new Minister of Finance, Dr. Ezra Suruma, has proposed radical economic changes that would see greater government intervention in the economy.” My immediate thought was: “Isn’t is another way of redistributing government funds to the political elite class?” But since I did not want to remain biased towards his thoughts, I ordered my lunch and continued reading.
First of all, I am not sure whether I should appreciate its shallowness and its lack of concrete ideas or whether it should raise suspicion. It is basically an enumeration of things that should be “determined”, “assessed”, “reviewed”. Of course, it is always easier to let readers unaware of the real plans:
1) Plan
2) Car
3) Insurance
What do these three nouns stand for? You can add any verb and thereby give it a meaning. That is exactly the way the strategy was written. It is therefore hard to criticise the arguments.
However, there are some ideas, which can be analysed.
Although I am a fan of co-operatives, I do not believe that the institutional environment is mature enough to rely on co-operatives. Uganda has had its experience with co-operatives and set prices. I thought that lesson was learnt. Apparently, one has not. This is sad. I mean, how shall you interpret such suggestions like “train the cooperative society members in the management of credit repayments”? This is a no-brainer. But against the background of the lessons learnt from the UCB, it is advisable to mention that loans must be paid back and that they are no other form of state subsidies. But wait maybe that is on the agenda, too …
The writer has no clue about microfinance. Microfinance is not appropriate for rural finance. Fortunately there will be a big conference on this issue and maybe someone from the Ministry will attend and understand this. By the way, microfinance has nothing to do with charity. Just to avoid any misunderstandings.
Okay, then there is again the wish to influence interest rates and the foreign exchange rates… Who came up with these ideas? Hey, wait, it is topped by this: “we will be estimating the minimum break-even prices for each crop for farmers to cover their cost of production and assessing the policy implications of this.” This reeks of self-service shops around the country. But why not, if they can overcome all practical challenges, it will definitely increase the number of loyal supporters of the Government. Peasants will love it and they will find their ways to proof astronomically high input costs.
Oh, I almost forget about one aspect: The article or strategy paper starts with a definition of the Government Budget: “The government Budget is essentially a statement of the revenues and expenditures of the government during the fiscal year.” (essentially – what else?). A significant share of the Republic of Uganda’s budget has been funded by donors for years. Are they going to continue doing so? Just look at the tough stance, foreign government took in the case of Kenya in recent days. And personally I would not say that the donors supporting the Republic of Uganda are amused in these days either…
SOURCES: http://www.sundayvision.co.ug/detail.php?mainNewsCategoryId=7&newsCategoryId=123&newsId=419166
http://www.sundayvision.co.ug/detail.php?mainNewsCategoryId=7&newsCategoryI$d=132&newsId=419156
Published on: Sunday, 20th February, 2005 in the Sunday Vision
But is I assume that the Sunday Vision cites his ideas and argumentation correctly. At least he instead of M7 argues in real terms. I mean otherwise it would be too simple to achieve the goal to increase the nominal annual income of households, which according to M7 “should be measured in terms of cash earned instead of quantity produced per year”. Suruma instead argues in real terms: “He said it was better to maintain 200 cows rather than have 500 cows that are hard to feed during drought. He suggested that any extra cattle should be sold in order to raise household incomes” – I am baffled by so much insightful thoughts!
But let us turn to “The Suruma strategy”. I could have stopped reading when I reached the sentence “The new Minister of Finance, Dr. Ezra Suruma, has proposed radical economic changes that would see greater government intervention in the economy.” My immediate thought was: “Isn’t is another way of redistributing government funds to the political elite class?” But since I did not want to remain biased towards his thoughts, I ordered my lunch and continued reading.
First of all, I am not sure whether I should appreciate its shallowness and its lack of concrete ideas or whether it should raise suspicion. It is basically an enumeration of things that should be “determined”, “assessed”, “reviewed”. Of course, it is always easier to let readers unaware of the real plans:
1) Plan
2) Car
3) Insurance
What do these three nouns stand for? You can add any verb and thereby give it a meaning. That is exactly the way the strategy was written. It is therefore hard to criticise the arguments.
However, there are some ideas, which can be analysed.
Although I am a fan of co-operatives, I do not believe that the institutional environment is mature enough to rely on co-operatives. Uganda has had its experience with co-operatives and set prices. I thought that lesson was learnt. Apparently, one has not. This is sad. I mean, how shall you interpret such suggestions like “train the cooperative society members in the management of credit repayments”? This is a no-brainer. But against the background of the lessons learnt from the UCB, it is advisable to mention that loans must be paid back and that they are no other form of state subsidies. But wait maybe that is on the agenda, too …
The writer has no clue about microfinance. Microfinance is not appropriate for rural finance. Fortunately there will be a big conference on this issue and maybe someone from the Ministry will attend and understand this. By the way, microfinance has nothing to do with charity. Just to avoid any misunderstandings.
Okay, then there is again the wish to influence interest rates and the foreign exchange rates… Who came up with these ideas? Hey, wait, it is topped by this: “we will be estimating the minimum break-even prices for each crop for farmers to cover their cost of production and assessing the policy implications of this.” This reeks of self-service shops around the country. But why not, if they can overcome all practical challenges, it will definitely increase the number of loyal supporters of the Government. Peasants will love it and they will find their ways to proof astronomically high input costs.
Oh, I almost forget about one aspect: The article or strategy paper starts with a definition of the Government Budget: “The government Budget is essentially a statement of the revenues and expenditures of the government during the fiscal year.” (essentially – what else?). A significant share of the Republic of Uganda’s budget has been funded by donors for years. Are they going to continue doing so? Just look at the tough stance, foreign government took in the case of Kenya in recent days. And personally I would not say that the donors supporting the Republic of Uganda are amused in these days either…
SOURCES: http://www.sundayvision.co.ug/detail.php?mainNewsCategoryId=7&newsCategoryId=123&newsId=419166
http://www.sundayvision.co.ug/detail.php?mainNewsCategoryId=7&newsCategoryI$d=132&newsId=419156
Published on: Sunday, 20th February, 2005 in the Sunday Vision
posted by Torsten at 10:26 pm
0 Comments:
Post a Comment
<< Home