Bretton Woods conditionality : the cause of progression or retrogression in Uganda's quest for economic growth and development

Mwesige, Patrick Keith (2005-12)

Thesis (MBA)--Stellenbosch University, 2005.

Some digitised pages may appear illegible due to the condition of the original hard copy.

Thesis

ENGLISH ABSTRACT: Today, the issue of poverty reduction is central to the development process. This is particularly so because developing countries and the donors that prop up many of these countries' economies have come to realize that not all impressive economic gains, where they occur in the developing countries, are translated into improvement in the people's welfare. The Bretton Woods institutions have also been under attack from an everincreasing body of research for neoliberal policies that inform their prescriptions to poor clients. It is alleged that the IMFlWorld Bank's conditionalities and austerity measures have exacerbated poverty in developing countries. The main issue in this study is whether the IMFlWorld Bank policy prescriptions to Uganda have led to economic growth and helped to pull the country out of poverty or whether they have impoverished its people even further. The other question for this research to answer is whether poverty in Uganda is on the increase or whether it is just a matter of perception. This study is based on information obtained from various books, academic journals and papers, NGO reports, government publications, electronic media reports, and IMFlWorld Bank working papers and reports. This study has been able to observe that the Bretton Woods institutions have succeeded in revitalizing Uganda's economy, although the country is yet to see sustainable economic growth. Although the privatization process was riddled with corruption, the country benefited from the reforms through efficiency gains. Similarly, people who grow only food crops have not benefited from liberalization, but those who grow cashcrops (except cotton) have generally benefited from it. The study has confirmed that some of the Bretton Woods institutions' conditionalities, e.g. retrenchment, have caused poverty among some Ugandans and cost sharing has increased the severity of poverty among Uganda's poor. The study has also confirmed that the inequality gap has widened. The income poverty that was receding between 1992 and 1997 has since 2000 made a comeback. The study also reveals that other qualitative forms of poverty e.g. powerlessness and social seclusion, are widespread in Uganda. However, the study has not found sufficient evidence to directly link the increasing poverty in Uganda to the Bretton Woods institutions' policies. Finally, it is recommended that to mitigate the effects of poverty, the release of poverty reduction funds should not be pegged on conditionality. However, conditionality should be imposed on non-essential government expenditure.

AFRIKAANSE OPSOMMING Armoedeverligting is vandag 'n kernkwessie in die ontwikkelingsproses. Hierdie waarneming is spesifiek van belang deurdat ontwikkelelende lande, en die skenkers wat sommige van hierdie ekonomieë steun, besef het dat indrukwekkende ekonomiese vooruitgang nie noodwendig tot 'n verbetering in lewens-standaarde lei nie. Die Bretton Woods instellings word al hoe meer gekritiseer oor hulle voorskriftelike neoliberale beleide. Daar word beweer dat die IMFlWêreldbank se voorwaardes en onbuigbaarheid reeds gelei het tot armoede in sommige ontwikkelende lande. Die hoof-ondersoek in hierdie studie handeloor die vraag of die IMF/ Wêreldbank-beleidsvoorskrifte Uganda aangespoor het tot ekonomiese groei en so gehelp het om die land uit armoede to help, en of dit nie dalk die landsburgers verder verarm het nie. Die tweede vraagstuk in hierdie studie is of armoede aan die toeneem is in Uganda en of dit dalk nie net 'n kwessie van persepsie is nie. Die navorsing vir hierdie werkstuk is gebaseer op verskeie boeke, akademiese joernaal-artikels en refererate, verslae van nie-winsjagende organisasie, regeringspublikasies, elektronies media verslae, en IMFlWêreldbank konsepartikels en verslae. Die studie het gevind dat die Bretton Woods instellings wel daarin geslaag het om lewe te blaas in die Ugandese ekonomie, maar dat die land steeds nie volhoubare ekonomiese groei behaal het nie. Hoewel korrupsie in die privatiseringsproses die sukses daarvan beperk het, het die land wel voordeel getrek uit vooruitgang in doeltreffendheid. Boere wat voedselgewasse plant vir plaaslike markte, het nie veel baat gevind by liberalisering nie terwyl diegene wat kontantgewasse (maar nie katoen) aangeplant het, het wel voordeel getrek uit liberalisering. Die studie het bevestig dat sommige van die Bretton Woods instellings se voorwaardes, byvoorbeeld afdankings en koste-deling, armoede veroorsaak het of die graad daarvan vererger het onder Uganda se armes. Die studie staaf ook verder dat die armoede-gaping groter geraak het. Die inkomste-armoede wat gekrimp het tussen 1992 en 1997, het sedert 2000 weer verskyn. Die studie onthulook dat ander kwalitatiewe vorms van armoede, bv. magteloosheid en sosiale uitsluiting, wydverspreid voorkom in Uganda. Die studie het egter nie genoeg bewyse gevind om die groeiende armoede direk te koppel aan die Bretton Woods instellings se beleide nie.

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