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Support sectors not individuals

By Vision Reporter

Added 27th March 2007 03:00 AM

THE Government has rejected an appeal by businessman Hassan Basajjabalaba to pay a sh6b debt owed by his company to the Uganda Development Bank.

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THE Government has rejected an appeal by businessman Hassan Basajjabalaba to pay a sh6b debt owed by his company to the Uganda Development Bank.

Basajjabalaba had argued in court that since his businesses were foreign exchange earners, the Government should bail him out. And this is as it should be.

Were it not for the sums involved, this case would seem like an isolated incident and therefore could be ignored. However, the Government support for business can be a force for good or can lead to debilitating regression.

A country is only as viable as its private sector – as the collapse of the Communist block showed – and looking down the annals of development history, governments have played a critical role in the growth of economies.

There have been successful government interventions, for example in south east Asia, and howling failures in Africa and others.

From the success stories, we learn that government intervention has to be dictated by a clearly defined vision, and be goal-driven and transparently executed across industries.

Endowed with very little in the way of natural resources, the south east Asian governments systematically developed their human resource over the last generation to the point now that they are on the cutting edge of high technology.
As well as developing our human resource, harnessing our agricultural potential is a logical place to start.

Not withstanding Basajjabalaba’s failed attempts to conscript government into his schemes, supporting a single individual where there is the possibility of supporting a whole industry – thereby ensuring a level playing field – is wasteful and counter productive.

For intervention to be successful it has to be holistic and not only involve exporters but must also include producers, education institutions, transporters and the banking industry.

Basajjabalaba is the poster boy for government intervention gone wrong but his example is useful in learning how not to intervene in the private sector.

Support sectors not individuals

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