60 years of Diplomatic Relations: Uganda should learn from China’s rapid industrialisation story

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Time and again, perhaps more frequently in the last 10 years, the Ugandan President has been on record talking about the need to industrialize or revamp at that, Uganda’s largely agro-based economy. The gospel of industrialisation and manufacturing has been so enthusiastically preached that various industrial parks have sprouted up in various regions in East Africa’s fourth largest state namely Kapeeka, Namanve and Mbale among others, thanks to Chinese heavy investments in these projects. Stories of Chinese industries in Kapeeka industrial park are inspiring. Literally, Chinese investments there have turned the once war war auditorium to flourishing industrial epicenter offering employment opportunities to thousands of Ugandans.

An objective assessment of the performance of these industrial projects illustrates that whereas as commendable achievements have been realised, much is left to be desired. That, exactly is why and where, the ‘banana republic’ can make use of its ally, the Peoples’ Republic of China, in as far as benchmarking some of the ideas that the Asian power house deployed to craft up one of the world’s fastest industrial revolutions, so as to realize her ‘industrial potential’.

Herein then follows a brief illustration of the evolution of China’s industrial revolution with the crux of the discussion being the mechanisms and policies that were employed to achieve that fete and perhaps how an industrialising Uganda may benefit from such. A former ‘agro-nation’ itself, China may effectively provide some practical solutions to Uganda’s ambitious industrialisation campaign.

The timeline of China’s over 40-year-old industrial revolution is indeed wide and requires more than a few worded-essay to extensively discuss however in the interest of being brief but concise, it can be argued that the revolution featured four distinct periods.

The revolution started with the system transition period (1978-1991), the market economy establishment stage (1992-2001), the period between China’s accession to the WTO to the 18th National Congress of the CPC (2001-2012), and the period since the 18th National Congress to date (2012-2020). Throughout the abovementioned stages, China implemented major industrial reforms that can be attributed to its status as the world’s principle industrial powerhouse today.

For purposes of this discussion and logically because Uganda can be argued to be in the early stages of its industrial revolution or revamp, focus will be emphasized on China’s similar system transition period to identify the foundational blocks laid to support the growth of a robust industrial sector, that the ‘pearl of Africa’ may learn from.  According to Wei Jigang, (Director Industrial Economy Research Department of China Development Research Center), the country’s industrial revolution can be originally attributed to the third plenary session held by the 11TH Central Committee of the Chinese Communist Party in 1978 where it was agreed that China enters the reform and opening up era that spurred the industrial revolution process.

The system transition period of the country’s economy was mainly along the lines of developing such policy and reforms that would cure the severe growth imbalance among the various sectors of the economy. There was imbalance amongst the agricultural, light and heavy industry, power industries among others, making operation and development of the national economy impossible. Solutions were required.

Firstly, a planned, coordinated and intentional development of the agriculture, light and heavy industry sectors between 1978-1985 was initiated. It was perhaps observed that excessive prioritization of one at the expense of others would not serve the economy. The oil, electricity, building materials, transportation industries were strengthened as their progress could easily kickstart development of other industries and resultantly the economy. Government undertook to support the textile industry through raw material sourcing and supply, adequate electricity and fuel supply among others. Government intervention is really crucial.

Comparatively, Uganda in its early industrial development stage, seems to suffer from an imbalance of the economy’s sectors. Uneven and uncoordinated support to some sectors at the expense of others nips the young industries in the bud. Efforts should perhaps be directed at fair and more purposeful allocation of the available resources across the board. Reports of inadequate supply of raw materials at the Soroti Fruit factory is a worrying observation that requires urgent government in survival of established industries if the industrial sector is to survive. In China, efforts were also directed at pushing manufactured products to the international market.

The opening up of the Chinese economy to foreign technology and economic ideas is another mechanism that served its purpose in the in the early stage of the nation’s industrial revolution. If implemented under the principle of equality and mutual benefit, foreign presence in Uganda’s industrial growth can be an invaluable step. In essence, Uganda needs to be wary of the danger of uncoordinated and imbalanced sectoral development if the industrial revolution is to bear fruit. China addressed this well.

A study of the Grant & Thornton Uganda overview of the 2022/23 national budget points to part of the problem. The disparity in allocation of sectoral expenditure resources is evident from the fact that whereas Works and Transport sector was earmarked to receive over Ush 4.3 trillion, their counterparts in the Trade and Industry sector were reportedly allocated a paltry Ush 418 billion. Without downplaying the role adequate infrastructure can play in industrialization of a country, the imbalance in resource allocation shall result into an imbalance in the growth of the sectors and resultantly, the economy. A more equitable and fair allocation of the available minimal resources across the table would suffice in my opinion.

In addition, it may also be important to note that Jigang unequivocally notes that this first stage of industrial revolution succeeded due to the intentional and dedicated planning and commitment by the implementers of policies. A thorough and serious approach from government on its policies will determine to a large extent, the fate of the sector.

In conclusion, the idea is not to copy and paste China’s policies into the industrialization process of Uganda as this would be a redundant approach however, there are effective policies and advise that both countries, who share thriving diplomatic relations may cordially exchange to the benefit of the latter.

Marvin Hannington Kalema is a Senior Research Fellow at Sino-Uganda Research Centre and a law student at University of Johannesburg, South Africa.

 


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