THE WORLD FINANCIAL CRISIS
1. As you know, the leading Western economic powers especially America and countries in Western Europe are in the deep of a financial crisis that has far reaching consequences for the whole world. Big merchant banks, insurance companies and associated companies are collapsing every day, literary crumbling like a pack of cards. People who borrow to finance home purchases are unable to pay. There is a growing global credit crunch.
2. The government of Uganda has watched these worrying economic trends, which started with astronomical increases in the prices of fuel and food, with an aloof attitude. Indeed President Museveni celebrated the rise in food prices arguing that Uganda farmers would reap high prices. He did not know that the increase in prices of oil and food would trigger a general rise in the cost of living and lead to the current 14% p.a. inflation. Uganda peasants have yet to benefit from the increase in food prices. Instead they are the victims of high inflation and unbearable cost of living.
3. The financial meltdown in the United States of America and Europe is not accidental or unforeseen. It is the result of their governments' abandonment of basic economic planning and regulation to the altar of a free market. It is capitalism run amock. With the collapse of socialism in the 1990, the promoters of the unregulated market had all the ammunition to push for the removal of any regulation of the excesses of the free market.
4. The result was that what were called Smart Chief Executives in the financial industry resorted to maximizing returns on investment not in production of actual goods but in the manufacture of financial instruments that were traded in primary and secondary markets. A house mortgage by banks, became tradable commercial papers for speculative trading by investment and merchant banks, insurance companies and other smart dealers. With time the layers of transactions, projects and interest based on few physical assets (houses) became unsustainable. The day of reckoning had come.
5. With the liberalization of the Uganda economy, which effectively meant privitisation of state enterprises, retrenchment of public servants leading to massive unemployment and out sourcing of work ordinarily done cheaply by public servants. Uganda joined the free world of smart investors or speculators. The people who have amassed wealth in Yoweri Museveni's regime are not the producers of real wealth but the smart dealers and the corrupt who supply to government and its agencies at exaggerated prices and then speculate in real estate diving prices of land especially in Kampala to levels beyond the reach of the working people. NSSF has joined this property speculation.
6. The working people who have been pushed to the wall, have now been enticed by the basically unregulated banking industry, especially the ever mushrooming micro credit institutions to borrow to acquire homes and several times for ostentations consumption (including lavish weddings) in imitations of the dealers. It is only a question of time when large scale defaults will lead to an unprecedented credit crunch in Uganda. The earlier economic boom under the NRM ended with the collapse of Tefee Bank, Greenland Bank, International Credit Bank, Cooperative Bank, Trust Bank, and the near collapse of Uganda Commercial Bank and Uganda Development Bank.
7. The Uganda Peoples Congress as a social democratic Party firmly believes that the strength of an economy is in the quality and quantity of its production of material goods, the quality and quantity of its work force and how the income derived from such production is distributed. While free enterprise should be encouraged to free up and utilize the competitive energies of all productive people, there must be safeguards and regulations to ensure that competition does not turn into corrupt speculation and exploitation of workers and consumers. This is the thrust of our economic and social philosophy.
8. To day we are seeing the US government feverishly intervening in the market to save America's mortgage, banks and insurance companies from the clutches of Wall Street. This is what the NRM government should be prepared to do to save our peasants and workers from the so called unregulated investors and smart businessmen, read conmen. In May 1969, UPC intervened in the market to save Uganda's interest, the world condemned UPC then and UPC was overthrown with the help of the British government of the day. Today, George Bush and Gordon Brown have realized that nationalization as a government intervention measure is a necessary action in their present circumstances to save the world collapsing economy. UPC has been vindicated.
9. The UPC calls upon the people of Uganda to examine the economic realities of our country and demand a return to proper economic management, away from excessive consumerism and unregulated credit that is bound to lead to economic ruin. Since the NRM government has demonstrated utter inability to change the economic course of this country, the UPC calls upon the people of Uganda to support it in its call for economic reform.
FOR GOD AND MY COUNTRY
CHRIS OPOKA-OKUMU ASSISTANT SECRETARY GENERAL