Wide-open economy won’t take us to Promised Land

University of Cambridge academic, Dr Ha-Joon Chang, left our economists and policymakers food for thought with his no-holds-barred presentation at the Bank of Uganda-organised Joseph Mubiru Memorial Lecture last week.

Dr Chang, a respected South Korean economist, told his audience at Kampala Serena hotel on Friday “there is no country that has ever broken out of the poverty cycle without having strict policies for the growth of their own industries.”

He cited Asian economies – Japan, China and South Korea – among those which exercised protectionism against the advice of the World Bank and International Monetary Fund, and have had the last laugh.

Dr Chang didn’t say anything new that some of our own economists haven’t said, albeit without getting the ear of those running our economy.

However, this coming from a foreign economist of repute who hails from a country that Uganda aims to emulate, maybe it’s time for our own to listen.

Notwithstanding all the hopeful talk about attaining middle-income status in a few years, it’s obvious that the economy has stagnated over the last couple of years, and yet those in charge don’t seem to have an idea how to revive it.

They are looking to oil production but this won’t be the magic bullet because we have an idea what happened to Nigeria, Angola and South Sudan, among others, once the price of oil plunged to record levels.

Therefore, the most ideal route for Uganda out of the poverty trap is industrialisation. But how will this be possible when we are importing virtually everything and killing any hope for local industry in the process?

How can a Ugandan manufacturer compete with his Chinese counterpart on the same footing when the former has to contend with higher taxes and costs of production?

A few African countries such as Ethiopia have learnt from the Asian experience and opted to protect their industries until such a time when they can stand on their own. And they are beginning to reap dividends.

Uganda has no choice but walk this path. Don’t say Dr Chang didn’t tell you.