Mr Lawrence Bategeka, a fellow at the Economic Policy Research Centre at Makerere University in Uganda, has suggested that there was indeed a strong whiff of hypocrisy on the part of the West which compels poor countries like Uganda to part with some of their most prized public commercial institutions because ‘governments are not supposed do business’ while the same governments are currently doing the opposite of what is expected.
‘When Uganda had their economic slump, the US, UK and the EU economist forced Uganda to dissociate from business and not interrupt the market forces but now in the same quagmire, the super powers are now scrambling to save their private sector companies,’ he said.
As the US and European economies drop deeper into financial chaos, the rush by Western governments to rescue their distressed financial institutions has provoked disbelief and wonder among economists in Uganda who view those interventions as contradictory.
Mr Lawrence also added that ‘It is easy to understand though. Our institutions like Uganda Commercial Bank were emerging as strong competitors for some of their companies and they had to invent a reason to force our government to sell it. Of course it was politically expedient not to reject the West’s advice at the time especially if they wanted to enjoy Western aid.
On October 3, the US Congress passed a massive $700 billion spending parcel that will be pumped into several key financial institutions and pull them back from the edge of collapse. The UK has also announced plans to pour vast amounts of cash into the nation’s financial system and partially nationalise some of the country’s biggest banking institutions such as Barclays, HSBC, Standard Chartered, Bank of Scotland and others.
The World Bank and the International Monetary Fund, which mostly advertise the preferred economic policies of influential western governments, forced the selling of the Uganda Commercial Bank, Uganda’s largest bank then, to South Africa’s Stanbic at $19 million, a price said to have been lower than its true value.
Mr Simon Rutega, the CEO of Uganda Stock Exchange, also expressed his surprise saying that it was intriguing that the US and Europe were scrambling to use taxpayers’ money to save collapsed private banks, mortgage and insurance companies yet they preached a different gospel to the Ugandan government.