Economic Policy Keeps Museveni in West's Favor

Article excerpt

Since the end of the Cold War, Western nations have usually been quick to condemn African leaders who mess around with the fundamentals of democracy. Although Uganda has banned political- party activity for the past 14 years, President Yoweri Museveni is praised by Western politicians, including President Clinton, as one of the new breed of African leaders.

Mr. Museveni, formerly a firebrand socialist, has wholeheartedly embraced privatization of state-owned enterprises, encouraged foreign investment, and reduced trade tariffs. He has also championed a massive hydroelectric dam project on the Nile River - the largest foreign investment in East African history

And that is enough to win favor from Western diplomats. Many admit that they go somewhat easy on Mr. Museveni when it comes to upholding democracy and human rights since they're so fond of his liberal economic ways.

More leeway for Uganda?

"There may be a little more leeway granted him because the economic policies are in our judgment the correct policies," says a European diplomat.

Since embarking on its privatization and public-enterprise reform program in 1992, the government has privatized 62 state-owned companies, 20 of which were sold to foreign investors, according to a recent report by the World Bank.

In the next five years, Uganda plans to privatize another 39 industrial and commercial state-owned corporations, with assets topping $600 million and employing 23,000 people. These are mainly big utilities - telecommunications, electricity, water and sewerage - but also enterprises involved in transport, manufacturing, construction, agribusiness, tourism, and trade.

Those in favor of the privatization push breathed a sigh of relief last month after Musevini's no-party National Resistance Movement system received a 90 percent endorsement in a national referendum. The vote was considered as much a measure of Museveni's popularity as a referendum on political systems, so the result bodes well for his success in next year's presidential election, and the continuation of the privatization drive.

But critics say the West is guilty of double standards when it comes to Museveni, says Ali Wako, research and planning chairman for the multiparty referendum committee. "If you don't have political reform, how can you carry out economic reform?"

The biggest foreign investment in the works is a $450 million hydroelectric dam to be built along the Nile River by an American conglomerate, AES Corp. It is such a big deal that when Uganda's Parliament demanded a parliamentary investigation because of allegations of corruption and mismanagement of the project, outgoing American Ambassador Nancy Powell hinted that killing the power project would harm relations with the United States.

Nonetheless the privatization process has not been without its hitches. Until now, net proceeds from the sale of state-owned enterprises is just $69 million. …