Category Archives: Africa

Love Thy Neighbour

The effect of Iddi Amin’s expulsion of the Asian community in Uganda on the social and economic development of the country

by Tumuhairwe Collins (Maastricht School of Management)

No abstract

URL http://econpapers.repec.org/paper/msmwpaper/2012_2f37.htm

Review by Bernardo Batiz-Lazo

The brutality of Idi Amin’s (1923?-2003) dictatorship in Uganda was legendary. I vividly recall reading about it in my youth. This early impression was most likely augmented by successful productions for film and TV, namely Irvin Kershner’s Raid on Entebbe (TV 1976), and more recently Kevin Macdonald’s The Last King of Scotland (2006).

He took office in 1971 after successfully ousting Milton Obote (President 1966-1971) in a military coupe. According to his BBC News’ obituary, up to 400,000 people are believed to have been killed under his rule. After eight years in office Amin was forced from power in 1979 by Tanzanian troops after which he fled to Libya, then Iraq, and finally Saudi Arabia, where he was allowed to settle in Jiddah provided he stayed out of politics. Although it seems the Saudi government ignored the one known attempt to return to Uganda, in early 1989, getting as far as Kinshasa, Zaire (now the Democratic Republic of the Congo), where he was identified and forced to return to Saudi Arabia.

It is widely assumed that Amin’s rule had many lasting negative consequences for Uganda including a low regard for human life and personal security, widespread corruption, and the disruption of economic production and distribution. In spite of having presided over one of the bloodiest rules in recent African history, he never faced trial for his alleged crimes.

Idi Amin Dada (President of Uganda 1971-1979)

In this paper, distributed by NEP-His on 2012-10-20, Collins describes the macroeconomic impact of the expulsion of the entire Asian population of Uganda by Amin in 1972. Blaming them for controlling the economy for their own ends, on August 4th 1972, Amin gave all the members of the Indian and Pakistani’s minorities (around 60,000 were not Ugandan citizens) 90 days to abandon the country. Collins’ analysis of this Indophobic episode recalls the expulsion of Jews from Spain in the 16th century and that of the Spanish-born from Mexico in the 19th century. This narrative assumes that specific ethnic cleansing episodes associate with a loss of social and economic capital and as a result, there is a long term weakining of institutions and productive capacity.


About 30,000 Ugandan Asians came to the UK in 1972 (BBC News)

Collins argues that Indophobic sentiment was widespread in the Ugandan society in the 1960’s and thus, pre-dating the Amin government. This is evidenced by the introduction of a system of permits and trade licencies in 1968 by the President Obote. Resentment against Asians was fuelled by the lack of successful entrepreneurial activities by Black Ugandans, to the extent that around 90% of the economy was controlled by Asians before 1972. But, says Collins, “[alt]hough anti-Asian sentiment was rife in the 1960s, the expulsion was unprecedented.” As a result, “[i]nvestments dried up, exports declined, and per capita incomes fell continuously from 1973 [see below]. Thus, there were three main effects of the Asian expulsion

1.Skilled managers were replaced by largely unskilled people, often drawn from the military and with little education;

2. The appropriation of their properties earned the country a long-lived reputation for lawlessness and property confiscation;

3. The manner in which former Asian businesses were acquired created insecurity of tenure, leading to asset stripping…”

Collins’ estimates show that annual growth of GDP peaked in 1969, before Amin came to power and three years before the expulsion (see graph below). It then remained flat until he is ousted in 1979. The 1970s was a period of high volatility for the world economy and specially for an oil-importing country such as Uganda. More so if, as it seems, “Big Daddy” was not a particularly dextrous at economic management. Interestingly, however, for the same period GDP per capita also peaks in 1969 and then consistently falls during the dictatorship. Taken together, the trends in GDP growth and per capita income may suggest that the expulsion of Asians adds to a process of wealth redistribution rather than the destruction of productive capacity within Uganda.

Uganda’s GDP per capita (index) and GDP growth over time (1967-1980)
(Source Collins, 2012)

Of course, causality is hard to ascertain based on simple descriptive series. It would be worthwhile for Collins to develop his views further by moving from descriptive to inferential statistics as well as expanding the database to test not only for the immediate effects of the Asian expulsion but also for its long-term impact.

Epilogue: This post celebrates the wealth of opportunities for business and economic history in developing countries and particularly Africa in the contemporary period. In this regard readers are pointed to the forthcoming World Bank Archives Workshop on Using History (which includes a presentation by Stephanie Decker, who has been quite successful in using the archives of the World Bank to reconstruct African history), the musing of Johan Fourie and Taylor & Francis’ Economic History of Developing Regions.

Postscript: I was pleasently surprised that this post was re-tweeted by David Birch, who thinks the UK is still benefiting from the arrival of some 30,000 Asian-Ugandans in the mid-1970s. This sentiment was shared and re-tweeted by Andrew Curry. Here is then another angle that could be explored.

Of Good and Better Companies: Reflections On Agency and Economic History

In Good Company: About Agency and Economic Development in Global Perspective
Jan Luiten van Zanden (j.l.vanzanden@uu.nl) University of Utrecht (The Netherlands) and Stellenbosch University (South Africa).
Abstract: The paper discusses some evidence, based on a review of new literature on economic history, about what is referred to as the Sen-hypothesis, that increasing human agency (of both men and women) is a key factor in economic development. It briefly discusses various dimensions of agency (or its absence): slavery (as the absolute suppression of human agency), access to markets, agency concerning marriage, and political participation. This concept perhaps also allows economic historians to move beyond the historical determinism that is central to much recent work in this field.
“Economic history is very trendy these days” (Zanden 2011: 3)

J. L. van Zanden

This paper distributed by NEP-HIS on 2012-01-03 raises a challenge to economic historians: how can we improve our current explanations of differential development and escape the common rhetorical places of path dependency and institutional persistence in our explanations of material stagnation and change? By placing human agency of men and women in the center of our stories, says Jan Luiten van Zanden, in the form advocated years ago by Amartya Sen in his best-selling book Development as Freedom.

Amartya Sen

It might be useful to remember Sen’s definition of agency, a concept that diverged from the usual meaning of the term in economics:

The use of the term “agency” calls for a little clarification. The expression “agent” is sometimes employed in the literature of economics and game theory to denote a person who is acting on someone else’s behalf (perhaps being led on by a “principal” and whose achievements are to be assessed in the light of someone else’s (the principal’s) goals. I am using the term “agent” not in this sense, but in its older -and “grander”- sense as someone who acts and brings about change, and whose achievements can be judged in terms of her own values and objectives, whether or not we assess them in terms of some external criteria as well. This work is particularly concerned with the agency role of the individual as a member of the public and as a participant in economic, social and political actions (varying from taking part in the market to being involved, directly or indirectly, in individual or joint activities in political and other spheres) (Sen 1999: 18-19, my own emphasis added).

Zanden’s reading of agency in Sen is “the capacity for autonomous decision making” that ultimately drives “economic and social-political change” (Zanden 2011: 4). Agency is also a synonym of “participation, or autonomy” (Zanden 2011: 5). But two questions remain. How does agency affect economic change? How does freedom impact agency? Sen responds:

Development as Freedom

Expansion of freedom is viewed both as the primary end and as the principal means of development. Development consists of the removal of various types of unfreedoms that leave people with little choice and little opportunity of exercising their reasoned agency. The removal of substantial unfreedoms is constitutive of development (Sen 1999: xii).

Zanden advances the usefulness of Sen’s framework and formulates what he calls the dual Sen hypothesis, this is, if “development is defined as freedom [… that] freedom -or rather -agency- is an important precondition and driver of long-term economic and socio-political change” (Zanden 2011: 5).

The second part of the “Sen hypothesis”, agency as a determinant of historical change, can be tested with proxy variables such as the gross domestic product or the human development index. However, what is behind these indicators? Zanden advances a suggestive explanation drawn from the new growth theory of Paul Romer and Robert Lucas: human capital is the crucial determinant of economic growth and human development. Human capital is embedded in the other variables for “one has to possess the right skills -the human capital- to really participate in markets, political events and the civil society” (Zanden 2011:5).

Continue reading

South African Agricultural Research and Development: A Century of Change

By: Liebenberg, Frikki, Pardey, Philip G. and Kahn, Michael
URL: http://d.repec.org/n?u=RePEc:ags:umaesp:56688&r=his

The 20th Century saw substantive shifts in the structure of agriculture and agricultural production in South Africa. Farm size grew, farm numbers eventually declined, and production increasingly emphasized higher-valued commodities, notably a range of horticultural crops. The real gross value of agricultural output grew steadily (by 3.32 percent per year) from 1910-1981, but declined thereafter (by 0.21 percent per year from 1982-2008). These long-run sectoral changes provide a context to present and assess an entirely new data series on public agricultural R&D (and related regulatory and extension) spending and associated scientist trends. South African agricultural R&D has been affected by a series of major policy changes. These are also documented and discussed here, along with the associated institutional changes regarding the conduct and funding of public agricultural R&D in South Africa. We reveal a number of disturbing trends, including an effective flat lining of the long-run growth in total agricultural R&D spending that took hold in the 1970s, an erratic path of funding per scientist, and a loss of scientific personnel in recent decades. Moreover, South Africa has lost ground relative to its competitors in international commodity markets such as the United States and Australia in terms of the intensity of investment in agricultural R&D. These developments are likely to have long-term, and detrimental, consequences for the productivity performance and competiveness of South African agriculture. They deserve serious policy attention as the 21st Century unfolds, with a firm eye to the long-run given the long lags (often many decades) that typify the relationship between agricultural R&D spending and productivity growth.

This paper highlights the importance of research into business and economic history outside of “Triad” countries (that is, the USA, Western Europe and Japan). More to the point, the need to rescue data relevant for economic management in sub-Sahara Africa (such as the South African export-led fruit, wine, and sugar industries which, the authors tell us, have kept a positive trade balance since 1910). This paper thus offers a first interpretation of a newly constructed long term series of South African agricultural data while focusing on productivity gains from agricultural R&D (in their science policy context).

A very rich and detailed study indeed. Although it would have been interesting to learn more about the changing nature of agricultural organisations themselves (and particularly the influence of say legacy institutions from the British empire to foster entrepreneurship and trade patterns), this paper is certainly worth a read.