ECONOMIC GEOGRAPHY Under these ‘economic rescue’ agreements, the IMF and


Western governments provided enough money for Uganda to service (pay interest on) its foreign debts and to ‘kick start’ its economy. They did so, however, only on condition that Uganda agreed to ‘Structural Adjustment Programmes’ (SAPs). Under these SAPs, Uganda had to organise its society according to the rules of a strict Western-type ‘market economy’. IMF agreements brought some benefits to the Ugandan economy. By 2000, for example, annual inflation had fallen to below 10%, while the value of Uganda’s currency had stabilised on world markets. Global economists praised Uganda for its ‘financial discipline’. Foreign investments increased to 15% of Ugandan GDP by 2002.


On the other hand, some facets of the IMF Structural Adjustment Programmes (see box) created serious social problems and divisions within Uganda. Poverty increased despite the ‘improving economy’, so that within ten years of the IMF agreement two-thirds of Ugandans were living below the poverty line. The gap between rich and poor also rose sharply and this has led to social unrest.


Some problems with Uganda’s


Structural Adjustment Programme ●● Government spending had to be reduced in areas such as health and education. This was bad for poorer people who could not afford to pay for private education and healthcare.


●● Nearly 100 state-owned enterprises such as Uganda’s Commercial Bank were privatised. Many state- owned assets were sold off cheaply to wealthy private individuals who became even wealthier in the process.


●● The Ugandan shilling was devalued repeatedly. This resulted in immediate increases in the prices of imported goods.


●● The Ugandan government had to remove state-imposed price controls that were designed to protect poor people from rising costs of basic goods.


●● Uganda had to open its borders freely to imported products. Some local small-scale producers found it difficult to cope with the resulting increased competition. The importation of mass-produced rice from Vietnam, for example, has commercially ruined some small-scale Ugandan rice growers.


●● The Ugandan economy had to become more export-driven. The production of cash crops such as coffee was given precedence over the production of basic food crops to feed local people. This emphasis helped large-scale exporters, but did little for people who struggled to survive below the poverty line.


What is the message of this cartoon? 34


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