5:30pm on a Thursday. My Scholars and I have been at the Hotel Africana since 10:21am for a regional stakeholder consultative meeting on promoting pro-development investment policies and agreements in the East African Community (EAC). Well, that’s not entirely true. From 1:00-1:30pm we went to the Canadian Consulate for a meeting with the Honorary Vice Consul, but that’s another story for another day. Anyway, for the past 7 hours we have listened to ministers, economists, professors, and relevant stakeholders discuss the implementation of Foreign Direct Investment (FDI) policies in the EAC. My mind is absolute mush. That is, until my boss pipes up and asks the room a question: “Can we be late?”
One thing I’ve learned since coming to Uganda is that you never know where the day will take you. I woke up this morning expecting a normal day: head to the FRA Secretariat at 8:00am, research/write, research/write, research/write, tea break, research/write, research/write, lunch/write, research/write, write, afternoon tea, research/write, write, leave for swimming at 5:00, swim, swim, swim, come home, write, write, sleep (dream about research and writing). But hey, in the world of the NGO anything can happen, and when it does it usually happens very quickly.
Today is a special occasion. Shelby, who usually goes straight to her NGO, comes with Rachel and me to FRA as she is scheduled to hitch a ride with our boss to a meeting at the Hotel Africana. The meeting is scheduled to start at 8:30am and the Hotel Africana is about 15km away from FRA. Due to the insane traffic jam that is Kampala, people often measure distance from one place to the other in kilometers rather than time. My boss emerges from her office into the main area at 9:15am. Rachel and I look up from our desk to see her standing over us (yep, we share a desk – it’s… cozy?):
Boss: Jeremiah, Rachel, Shelby, close your laps, you are coming with me (she calls me Jeremiah; she calls laptops “laps”)
Rachel/Jeremy to Shelby: Looks like we are coming with you!
All of us to each other: Didn’t the meeting start an hour ago?
We saunter into the meeting at 10:21am after nearly an hour of waiting in traffic. In North America, arriving nearly 2 hours late for a meeting would be classified as “late”; however, things work a little bit differently here in Uganda. As expected, the meeting has just started. In fact, the keynote speaker and a few other important people have yet to arrive! We quietly settle into our seats, pull out our notepads, and get cracking. There’s learnin’ to be done.
Anybody that knows me well is aware that I am a pretty regimented person. I like things to run on time and believe that every minute in the day should be used doing something productive – a minute spent doing nothing is a minute wasted, plain and simple. However, while my ‘type A’ tendencies serve me well in the Canadian context, they are often a hindrance here in Uganda. For example, in Canada if a swim practice starts at 6:00am, I know that I need to wake up at 5:33am as it takes me exactly 22 minutes to get dressed, eat, walk to the pool, and arrive on deck at 5:55am. Furthermore, if I have to wake up at 5:33am, that means I have to be asleep by 10:00pm. And green grass grows all around.
Perhaps naively, I assumed that the same habits would work in Uganda. For example, last Saturday I had to be at the pool by 6:30am. Simple enough: 12 minute boda ride in morning traffic, 4 minutes to get changed and on deck, another 4 minutes to stretch before practice; better get Mr. Boda (he has a name, but I will refer to him as Mr. Boda to respect his privacy) to pick me at 6:10am. Nope! 6:10 came and went, so did 6:15 and 6:20. At 6:25 I called him to see what was going on:
Me: Mr. Boda, oli wa? (Luganda for: where are you?)
Mr. Boda: Mr. Jeremiah! Nndi mu kkubo! Soon! (Luganda for: I’m on my way!)
Me: Bulungi! (Luganda for: good!)
At 6:28 (two minutes before practice was scheduled to start), Mr. Boda came riding up the front drive, wearing the usual smile on his face. He stretched out his hand and we did the traditional Ugandan handshake where the handshaker and handshakee change grips with one another two or three times. “Wa su ze otya, magadawange!” (Luganda for: how are you, my brother!), he said. Slightly annoyed, I replied “gyendi (Luganda for: I’m fine), but what took you so long? I thought we agreed on 6:10am?” I was met with a perplexed look from Mr. Boda. He simply said, “ohh sawa sawa (Luganda for: okay) my brother, but we go now?”, and off we went.
As a foreigner, in situations like these I have two options. (1) Let frustration get the best of me, jump to conclusions, and most likely insult my Ugandan friends and colleagues, or (2) try to understand these situations from another perspective. As a ‘learner’ I tend to choose the latter as much as possible. Allow me to explain. I am reading a book right now called, “Generation NGO”. The book chronicles the experiences of young Canadians who do government-funded internships abroad – sounds familiar. In one of the chapters, a NGO worker stationed in Madagascar describes the trials and tribulations of getting a bus to take her to another town. In one instance, the bus is scheduled to depart at 7:30 in the evening, but does not leave until 3:30pm the next day! However, instead of letting ill-founded anger get the best of her, she decides to look at her situation from the perspective of someone from Madagascar. The Canadian NGO worker notes that instead of feeling frustrated that her ride is late, she chooses to consider herself “fortunate to have a ride at all”.
The same principle applies to my experiences with Mr. Boda last week and with showing up late to the conference today. Instead of being angry with arriving late, I am simply thrilled to have the good fortunate to be here in the first place. After all, if I am the only one that is angry about a boda arriving 20 minutes late or a meeting starting 2 hours behind schedule, then is that anger really rooted in reason or rather a false assessment of my surroundings? Quite simply, in the Ugandan context, I believe that the emphasis is not on when something starts or ends, but rather on whether it happens at all. Turns out that there are times where we can be late.
So here I am, little Jeremy from Winnipeg, sitting at a regional stakeholder consultative meeting on promoting pro-development investment policies and agreements in the EAC. At this point you might be asking, “why are you, little Jeremy from Winnipeg, sitting at a regional stakeholder consultative meeting on promoting pro-development investment policies and agreements in the EAC?” Well the regional stakeholder consultative meeting on promoting pro-development investment policies and agreements in the EAC is put on by the Southern and Eastern African Trade, Information and Negotiations Institute (SEATINI – NGOs like their acronyms… ha, get it? Because NGO is an acronym in and of itself? Okay, yeah. You get it). Because food security and food security policy is inextricably linked with international trade, FRA is closely affiliated with SEATINI. In fact, my fellow Scholar, Shelby even works there. Thus, little Jeremy from Winnipeg sitting at a regional stakeholder consultative meeting on promoting pro-development investment policies and agreements in the EAC.
Here’s where things get a bit dense, so if you are tired I recommend you either: (1) quit now and hug your children tightly; (2) unsubscribe from my blog (let’s face it, you should have done that long ago); (3) drink a lot of coffee; or (4) Jägerbomb (you can google it if you’re curious).
The purpose of the aforementioned meeting is, quite simply, to discuss the social and economic future of the EAC, and more specifically Uganda. The EAC is an intergovernmental organization that oversees the political and economic integration of: the Republics of Burundi, Kenya, Rwanda, Tanzania, and Uganda. In the last decade, states in the EAC have experienced tremendous economic growth. In fact, according to the World Bank, Tanzania alone has experience GDP growth rates in excess of 7% over the past few years; China, watch out. Unfortunately, high GDP growth rates do not indicate overall social and economic wellbeing. For instance, although EAC countries are among the fastest growing countries in the world, the East African region remains extremely poor with an average GPD/capita at US $769. Further, the legal framework for social and economic rights among EAC members is weak at best.
Regardless, at this point you might be asking yourself, “but little Jeremy from Winnipeg, if the EAC is growing so quickly, why hasn’t this growth translated into ‘development’? Moreover, what is the source of this growth?” Well, in order to answer the former, first have to address the latter. So, what is the source of economic growth in the EAC? Three letters: FDI – otherwise known as Foreign Direct Investment.
The concept of FDI is quite simple. Let’s say that Canada is really good at extracting maple syrup, but does not have enough factories to produce the stuff. After all, factories cost a lot of money to start up, and we Canadians are poor because we spend our paychecks on drinking beer and buying plaid shirts. Fortunately there is a rich investor from Luxembourg who goes through Canadian maple syrup faster than a roll of toilet paper in the ladies room at a Barry Manilow concert. Thanks to FDI, our investor friend from Luxembourg can directly invest in Canadian maple syrup factories. Seems like a win-win; Canada gets more factories to produce and export maple syrup and our Luxembourgian comrade gets more maple syrup, plus shares in his investment. Additionally, Canadian GDP rises because the new maple syrup factory employs 10 000 hardworking Quebecers. Mais oui?!
Now that’s FDI in theory. Here’s how it plays out in Uganda; in the real world. According to a recent report published by SEATINI, FDI in Uganda has not translated into jobs due to the fact that the majority of foreign investors have poured money into sectors such as finance, real estate and business. These sectors employ less than a third of Uganda’s workforce. Conversely, the agricultural sector employs well over two thirds of the work force, but has largely missed out on the FDI party. Additionally, jobs that have been created by FDI in Uganda are notorious for their poor working conditions, lack of job security, and overall “deplorable” standards. Long story short, Uganda has seen a lot of economic growth from FDI, but that growth has not translated into jobs or better living conditions for the majority of Ugandans.
Given FDI’s poor track record in Uganda, it came as a bit of a surprise to organizations like SEATINI and FRA when the EAC rolled out their plan to enter in a Bilateral Investment Treaty (BIT) with the good old US of A. BIT, can you use it in a sentence please? Sure! Sally said to Johnny, “boy, this Bilateral Investment Treaty between the EAC and the USA is a BIT exploitative”. You see, FDI works really well between two ‘developed’ countries like Canada and Luxembourg. After all, both have strong economies that are able to make ‘value-added’ products like cars or computers in big shiny factories. Nonetheless, problems arise when the relationship between two countries is asymmetrical in nature.
Listen, while the USA has the economic might to produce pretty high-tech gadgets, Uganda is still primarily an agrarian economy. In fact, 80% of Uganda’s total workforce is employed in agriculture. Unfortunately, when a wealthy country like the USA invests in Uganda, they are not looking to build car factories or iPad plants; rather, they are looking to invest in cheap land where they can extract raw natural resources and export them back to the USA (tax free I might add) so they can be manufactured into cars and iPads by US-owned firms. These cars and iPads are then exported back to Uganda where they are sold to hard working Ugandans above market value.
Hmm… rich countries extracting resources from poor countries on the cheap? Sounds like the definition of colonialism to me. As a side, most of Canadian FDI is directed towards mining companies in ‘developing’ countries. Yep, we are now known worldwide not for Pearsonian internationalist peacekeeping missions, but rather for exploiting the poor for our own benefit. I am bursting with pride.
So, who really benefits from the proposed BIT? The Ugandans who labour for a few cents an hour in poor working conditions on US-owned land or the US-owned firms who decided to selflessly invest in Uganda’s economy? Additionally, if Ugandans do not have the economic capacity to invest in US-owned firms, then is this treaty really ‘bi-lateral’ (between two countries), or is it just a BIT of crap?
If we look at the terms of the BIT in greater detail, we see just how exploitative the treaty is. For example, under the Most Favoured Nation (MFN) and National Treatment (NT) clauses, investors from the US will be granted the same treatment as Ugandan investors. This means that foreign investors will have the opportunity to receive major tax holidays (up to 25 years in some cases) and tax concessions on land they invest in. Tax free land in one of the most resource rich places in the world you say?! I’m in! While I’m at it I might as well punch an old lady and make an orphan cry. Additionally, the objectives of the BIT state that measures will be taken to protect the investments of all parties. But wait, if no Ugandans are investing in US-firms, then doesn’t protect “all parties” really mean protect “Americans”? As one professor indicated in his presentation to the stakeholders, there is a major deficit between rhetoric and reality in the proposed BIT.
Here is the kicker. The US has already stated, and I quote that they “will not change a comma” of the draft agreement. Take it or leave it, simple as that. So when the US delegation says that they are negotiating a ground breaking partnership with the EAC, what they really mean is that they are in the midst of strong-arming an exploitative trade agreement with a developing state which does not possess the bargaining chips to refuse.
By this time we have been listening to stakeholders argue the case I outlined above for a few hours. The consensus among stakeholders is that the BIT needs to go beyond facilitating pure investment and seek to implement “pro-development” policies to protect Ugandans. The consensus among the representatives from the Ugandan Ministry of Trade is, well… they are too busy counting the money from American investors to say anything coherent. It is about now where my boss pipes up and asks: “Can we be late?”
The whole room goes silent for a second. She says it again, “Well Mr. Chair Person, can we?” This time she goes onto clarify her question: If the ‘developed’ world wants to engage in FDI, then let them, but as Ugandans we need to push for policies that allow our economy to grow before we engage in any more trade agreements. It is not that unregulated FDI is wrong for Uganda; rather, it is just not right at this time. There is a day that Uganda will be ready to engage in investment relationships with the US and Europe, but that day is not today, so for now we will have to be late.
Without intending to, my boss’s statements reaffirmed my beliefs about punctuality in Uganda. For her (and the other stakeholders in the room) the question is not when Uganda is able to engage in FDI treaties with global superpowers, but rather whether it happens at all. It is about being fortunate to possess the capacity to get to the destination over time.
So, while the US tries to impose its fast-paced schedule on the ‘developing’ world, I hope that Uganda maintains its resolve and arrives late. I want to end with a story that one of the presenters shared this afternoon:
In 1776 the US gained independence from the British Crown (Liz’s ancestors). Soon after, Liz’s ancestors approached the US with a free trade deal not unlike the BIT in principle. At the time of independence, the relationship between the US and Great Britain was similar to the relationship between Uganda and the US today. Great Britain was the unquestioned global superpower, fueled by the might of the industrial revolution, and the US was a small agrarian economy with hardly any industrial capacity. So, when the US was approached by Liz’s ancestors they had a choice: acquiesce to the superpower for a few short term benefits, or let Great Britain keep Her free trade banner and arrive late. The Americans chose the latter. After 200 years of protectionist economic policies, industrialization, and investments in human capital, the US was finally ready to take Great Britain up on Her offer.
It appears that the US has forgotten its own history. Uganda has been an independent country for less than 55 years. Like the US in 1776, it is an agrarian economy with little industrial capacity. Yet, the US in all of its wisdom has turned around and given Uganda the same ultimatum that Great Britain gave it after independence: let us exploit you in exchange for some protection or stand alone. Take it or leave it.
I am of the opinion that Uganda should do what the US did in 1776 and make the choice to “come late”.
Invested in the future,
Your pal Jeremy