Nature, character of Uganda’s economy

What you need to know:

Tiers. In the lowest ranks are ourselves, Uganda, Sudan, Tanzania, and Ghana etc. This category has no introvert capital accumulation. Such economies are dominated by the centre and economies at the second tier (in our case Kenya).

What is the character and nature of the Uganda economy? This question had troubled me for a long time until I stumbled on the subject of peripheral capitalism. Peripheral capitalism got to greatly explain to me the Uganda economy.
With the extension of capitalism beyond the borders of Europe in the late 19th Century – something which goes by the name imperialism, the whole world became one capitalist system. This system had a centre in Europe and the rest of the world became the periphery of capitalism. Our economy is, therefore, part and parcel of the periphery and the character and nature of our economy is peripheral capitalism.
Apart from geography, what are the characteristics that distinguish peripheral capitalism from the economy of the centre of capitalism or what is often called the metropole?
The principal difference between the economies of the centre and that of the periphery is found in the structure of the production process in the respective economies.

Production process
Generally the production process is composed of three components. The first component is the one which produces the means of production. The second component also produces the means of production, but of a different kind from the first component. It produces means of production for the consumer industry. And the component in the lowest rank produces consumer goods.
The economies at the centre occupy a commanding position because they have the means to produce the means of production. It is from this character that their commanding position derives.
The next difference between the economies at the centre and those at the periphery is that the economies at the centre are self-sustaining. Self-sustaining here does not mean what economists call autarchy, it means they are not dependent on other economies. In order for an economy to be self-sustaining, it must conduct production at all levels listed above, and especially the two highest levels.
That said, it should be pointed out that the mere physical location of the production process in a country with a peripheral economy does not make such an economy self-sustaining. A good example is the wiring of microprocessors for American computers based in Taiwan. Simply basing this economic activity in the country will not raise that economy to a higher reproductive level. This particular economic activity is not linked with other sectors in the economy.
At this point we shall attempt to rank various peripheral capitalist economies and see where Uganda is placed. Top of the rank are economies that produce a considerable amount of means of production. Such economies engage in introvert accumulation or what can be viewed as exploiting other peripheral capitalist economies.
In this category are economies such as that of China, India and to some extent Brazil. Such economies are also on the way to getting out of the category of peripheral capitalist economies. They have shed off some characteristics of peripheral capitalist economies.
The second tier of peripheral capitalist economies are economies with a relatively high degree of ability to produce consumer goods. Such economies have attained a relative degree of introvert accumulation.
In this category are economies such as Pakistan, Iran, Egypt and our neighbour, Kenya etc. The introvert accumulation the Kenyan economy engages in is from exporting consumer goods to other countries of the region.
In the lowest ranks are ourselves, Uganda, Sudan, Tanzania, and Ghana etc. This category has no introvert capital accumulation. Such economies are dominated by the centre and economies at the second tier (in our case Kenya) through circulation and are integrated to the centre and economies at the second level as importers of consumer goods and exporters of raw materials.
Apart from features of peripheral capitalism already enumerated, there are other features which give the character to peripheral capitalism. In his book, Unequal Development: An essay on the Social Formation of Peripheral Capitalism, Samir Amin listed four other characteristics of peripheral capitalist economies:
(1) The predominance of agricultural capitalism (2) The creation of a local, mainly merchant, bourgeoisie in the wake of dominant foreign capital (3) Tendency toward a peculiar bureaucratic development, specific to the contemporary periphery; and (4) The incomplete, specific character of the phenomenon of proletarianisation.

Agricultural capitalism
Of these characteristics, the one which stands out with regard to Uganda is the predominance of agricultural capitalism. Uganda is a predominantly agricultural economy. It is estimated that the agricultural sector employs 82 per cent of the workforce, accounts for 90 per cent of export earnings, and provided 44 per cent of GDP in 1999.
The intention in writing this article was to inspire discussion on the character and nature of our economy. Knowing the character and nature of our economy helps us plan. President Museveni keeps talking about attaining a medium income status. I believe instead, he should aim at moving the Uganda economy from the third tier into the second.

The writer is a leading ideologue of the UPC