'Poverty Reduction in Uganda\r'

'Name: Nguyen, Thi Hai Yen Student ID: 2012470037 motif: Special topic in international instruction: Afri rear stintings and politic Topic: Uganda †The glittery in p ein truthwherety reduction for some different submarine †Saharan African countries Uganda is a landlocked and recounting fiddling ground in East Africa. new-fashionedr on independence in 1962, Uganda experienced a ex of relative political and stintingal stability in the inaugural place 15 years struggling under the military unit of Idi Amin who exsert the artless to conflict and rivetd uncouth to a fai conduct state and a collapsed economy.It stopped by 1986, when Yoweri Mus yeti took power brought a period of sustained sparingal and political renewal to Uganda. Uganda is a relative spicy of natural preferences including fertile soils, regular rainfall, small deposits of copper, gold, and early(a) minerals, and repennyly discovered oil. Just like other African countries, export of Ugan da heavily depends on drinking chocolate with 63 per centimeime of total export r nonethelessues of the sphere. Uganda has been a bright point in Sub †Saharan Africa by being the starting line region in the region to embark on liberalization and pro-market policies in the late 1980s.thank to the right policies, the organisation has maintained a stable macroeconomic purlieu and sustained toffee-nosed sector-oriented reforms that graduated Uganda into a mature reformer in 2006. gross house servant product harvest accele regularised from an medium of 6. 5 per cent per year in the 1990s to over 7 per cent during the 2000s. To stick aroundher with the sustained economic harvest-time in the past deuce decade, Uganda enabled lusty destitution reduction and some progress towards millennium Development Goals (MDG).Although other MDGs such as achieving public primary fostering, reducing child mortality come ins, melio prescribe maternal wellness, combating HIV/AIDS, malaria, and other diseases have been slow, the first tendency of meagerness reduction has been achieved roaringly in Uganda. In 2009/2010, Uganda surpassed the 2015 MDG of halving the 56. 4 per cent scantiness rate recorded in 1992/1993 to 24. 5 per cent. However, in 2011, at a per capita income at 500 USD or 1300 USD in PPP, ranked 203 in the world, Uganda delays a really poor country and far from the essence income billet it aspires to achieve in one eneration. This composing thereof reviews the economic background of Uganda; examines the trends and patterns of distress; the politics strategies to issue poverty and concludes with challenges in sustaining the poverty reduction consummation and indemnity recommendations. sparing background disconcert 1. Sectoral contributions to GDP and Growth Rates in Uganda (from 2001-2010) As can be seen from table 1, Uganda remained high growth rate during the period from 2001-2009 with 7. 9 per cent in average before cool do wn by 5. per cent in 2010 and 4. 3 per cent in 2011 because of the humiliate of demand from the main export markets of Uganda, specially the regular army and European countries since the world recession.. In names of structure, Ugandan economy has a modern structure in which GDP is attributed largest from the run sector, follow by the industrial sector and least by the rude sector. However, in fact, factory farm is the main sector of the economy, employing over 82 per cent of the work force even it contributed except 22 per cent of GDP (2011).The budget dearth has modifyd by reducing gradually from 10. 2 per cent of GDP on average during 2000 †2004 to 7. 9 per cent of GDP on average during 2005-2008 and reached 5. 9 per cent of GDP in 2011. Uganda remained high domestic enthronement rate at 23. 9 per cent of GDP, thus kept the national debt rate at a safety rate correspond to other countries. However, after(prenominal) a decade remained one physique reckon of inf lation, the consumer prices in the country became worse in 2011 at 18. 7 per cent in 2011.Economic knowledge has been made as the most important anteriority of Ugandan government and the economic policy is focal point on the private sector, attracting foreign direct enthronisation, modify access to world markets and on achieving relief from undue debt. Therefore, it has adopted a number of policy initiatives to start up the economy, including the National Development political platform which is the master phylogeny innovation; architectural plan for the Modernization of Agriculture, the Medium call Competitiveness Strategy for the Private Sector, the Competitiveness and enthronement Climate Strategy, the Poverty Eradication Action Plan among others.The trends and patterns of poverty in Uganda Table 2: event and percent of Ugandans that are despoticly poor, insecure non-poor and sum of money correct (from 1992-2010). Table 3: The characteristics of poor, insecure non-poor and bourgeoisie households Table 4: In opposeity based on the Gini coefficient (from 1992-2010). Source: UNHS various years and IHS 1992/3 Table 2 indicates that during the 1990s, the proportion of Ugandans whose incomes below the poverty greenback vicious dramatically from 56. 4 per cent in 1992 to 33. 8 per cent in 2000.It meant there were 2. 5 million of Ugandan tidy sum escaped from infinite poverty within 8 years; they locomote to the conclave of non †poor but insecure which change magnitude importantly by 10. 5 per cent. During 1990s, the per cent of midriff class in Uganda in any case travel precipitously from 10. 2 per cent to 22. 4 per cent. The middle class own more household assets, are a lot more educated and spend more capital in education rather than on diet items like the poor. The key reason of these trends was increase in average income, rather than by re distribution in society.Income contrariety was basically decreased from 1992 to 19 97, but increased thenceforth; the Gini coefficient was between 0. 37 and 0. 35 until 1997, but rose to 0. 39 in 2000. After 2000s, Uganda did not remain the success which was achieved in the previous decade, when the proportion of people red-hotd with 1. 25$ a day rose by 5 per cent from 2000 to 2003, meanwhile the inconsistency overly increased which measure by the GINI coefficient rose from 0. 365 in 1992 to 0. 428 in 2003, and in urban area the variety was more clear and increased faster than homespun area.The trends were mainly driven by the slowdown of the economic when the GDP growth rate dropped from 8. 5 per cent in 2001 to 6. 5 per cent in 2003 and the husbandry sector which employed majority of the workforce was foil when the growth rate fell dramatically by 5 per cent during that period, while the service sector decreased slightly and the industry sector even performed well (according to table 1). The slowdown in agriculture relative to other sectors tended to i ncrease variation in this period, both because the poor are concentrated in agriculture and the share f labor in the incomes of other sectors may be quite small. The reasons for the late patterns include a slowdown in agricultural growth during the inhabit three years, declines in farmers’ prices reflecting world market conditions, insecurity, high population growth rate and morbidity related to HIV/AIDS. The trends of poverty in Uganda changed differently in the following(a) period from 2002 to 2010 compare to the previous time; the poverty proportion fell sharply and surpassed the first goal of 2015 MDGs of halving the 56. per cent poverty rate recorded in 1992/1993 to 24. 5 per cent. Uganda became the first country in Sub- Saharan Africa countries achieved the first goal of MDGs before due date of 2015. However, together with this achievement, the inequality in the country rose which measured by the increase of GINI coefficient from 0. 408 in 2005 to 0. 426 in 2010. It seem blowsy to explain those two diverse trends because of the growth of economic also lead to the rising of income inequality even in the country who have good genial welfare system.The middle class of the country also reached one third of the population in 2010 who was claimed that benefited from small business rather than agriculture sector. The emergence of the middle class will lead to greater outgo power and, the ability to invest in the time to come re lay outs an opportunity to accelerate the socioeconomic switching process. However, the insecure non poor (42. 9 percent) are another group requiring specific attention, while the fight against absolute poverty continues for 24. percent of Ugandans. Ugandan government’s strategies to reduce poverty Uganda is among the in truth few countries which surpassed the MDGs before 2015, especially in Sub- Saharan region. As mentioned higher up, over the last 20 years, Ugandan government has apply a number of policies to ju mp-start the economy and it has been worked well and lead to the relative high and sustained economic growth rate as well as eradicating significantly the poverty.Among those policies, there were two main programs geared towards reducing poverty which were the Poverty Eradication Action Plan (PEAP), Plan for the Modernization of Agriculture (PMA). First, the PEAP was adopted in 1997 as the exemplar for addressing the key poverty challenges. The plan was made to range the public policies and discourses relevant to poverty reduction. It was highly instigateicipatory with the primal and local government, the donors, non †government organizations, civil society and economic scholars.The plan was succeeded because it was implemented by the government’s budget and a medium †term spending framework. Right after the adoption of PEAP, the public expenditures on basic services were significantly increased in 1997. One part of Ugandan government’s budget for PEAP ca me from the economic assist of World Bank and International Monetary investment trust to religious service the low †incomes countries develop poverty reduction strategies. The PEAP was revised twice in 2000 and in 2005. The modish version was launched in 2005 which aimed at contributing towards transforming Uganda into a middle-income country.The PEAP was based on five pillars: (1) economic watchfulness: aims to sustained relative high growth rate by facilitate to investment; remedy root word; modernization and commercialization of agriculture, with emphasis on value-addition; improve pastoral access to pay and to strengthen SMEs; centre on HIV prevalence reduction; (2) Enhancing production, engagement and incomes; (3) Security, conflict-resolution and disaster management; (4) Good Governance; (5) piece exploitation to strengthen the serviceman resources by alter education system and social health perplexity system in order to improve sanitation, alliance mobil ization, family planning and reduce malaria, HIV/AIDS; improve the water supply in urban and rural areas and increase the role of private sector.In implement of the PEAP, the central government was responsible for ensuring a basic framework of legality, rights and freedom, nondiscrimination among citizens and intervening in the economy to promote economic efficiency, equity and growth, meanwhile the private sector contend the key and active role in investment; the private sector is responsible for the majority of deep investment and it financings public goods for altruistic, cultural or prestigiousness reasons; civil society works free from the government to handle to advocacy for the interests of groups who might otherwise be neglected; support conflict resolution and finance service in sectors not covered by the government; and the donors plays important role in providing financial backing public expenditure. Second, Uganda’s Plan for Modernization of Agriculture, PMA, was issued in 2000, and it has been implemented since 2001. The PMA is an integral part of the strategies of the PEAP, and contributes directly to two of the four overarching PEAP goals: (1): quick and sustainable economic growth and structural transformation, and (3): increased ability of the poor to go on their incomes. The PMA is a framework which sets out the strategic imaging and principles upon which interventions to address poverty eradication through transformation of the agricultural sector can be developed.The raft of the PMA is poverty eradication through a profitable, competitive, sustainable and dynamic agricultural and agro-industrial sector. Rural poverty is seen to be best addressed through promoting the commercialization of agriculture, and in particular providing a coordinating framework for support services and public goods in rural areas. The PMA core document sets out these principles, but also identifies priorities for interventions and activities in the f orm of seven pillars, to be implemented by various government ministries and local government, and a non-sectoral qualified grant. The PMA identifies seven pillars where priority put to deaths are recommended.These are: (1) search and technology, (2) national agricultural advisory services, (3) agricultural education, (4) improve access to rural finance, (5) agro-processing and marketing, (6) sustainable natural resource utilization and management and (7) physical infrastructure. These two above key programs succeeded in helping Uganda surpass the poverty reduction goal in MDGs. However, Uganda is unchanging very poor country and is still faced with legion(predicate) challenges from internal as well as remote factors. Thus, the Ugandan government has launched a new policy framework, the National Development Plan as a response to the success of the PEAP in poverty reduction.It continues the view of poverty eradication and more focus on economic transformation, wealth creation and equally distribution; in order to transform Uganda society from a peasant to a modern and prosperous country within 30 years. Due to the limitation, this paper unspoilt analyzes the two main programs which helped reduce poverty from 56. 4 per cent in 1992 to 24. 5 in 2010 and soon introduces the new strategies of Ugandan government in the next period. Conclusion and recommendations What Uganda economy has achieved is outstanding among Sub-Saharan Africa region, however, Uganda is still among the poorest countries in the world, the income per capital ranked 203 in 2011 and the inequality has been raising which means majority Ugandans still live in bad and vulnerable condition. 0% of the workforce is working in agricultural sector which contributed only(prenominal) 22% of GDP and the sector easily get negative impacts from climate conditions or the reduce term of trade. Therefore, the Ugandan government needs to take action to sustain the poverty reduction, bring about more e qual opportunities for citizens and improve economic performance. The country could learn from experiences of southern Korea, which experienced one of the most dramatic declines in absolute poverty that the world has seen. Compare to entropy Korea in 1960 when siemens Korea started its industrialization, Uganda economy at present is in a better billet. At that time, southeast Korea was destroyed by the Korean War, high absolute poverty rate, in the 1950s the majority of Korean people lived in absolute poverty.Even as late as the mid-1960s, between 60-70 per cent of the population was estimated to be living in poverty. The area of Uganda is about 2. 4 times bigger than South Korea with relative productive natural resources. Moreover, the official language of Uganda is English which is very useful and easy to do business abroad. Thanks to the economic transformation, since early 1960s, Korea has been able to achieve rapid growth with equity, and by the mid-1990s, the absolute po verty had dramatically declined to levels as low as 3. 4 percent of the population. Indeed, by 1999, the Korean averages for poverty in wiz person households was comparable to other OECD countries.There are number of lessons that Uganda can learn from South Korea on its development path: fully utilize the foreign aid which highly supports government expenditure for education, improving health care system, infrastructure…; encourage domestic savings and private domestic investment; the government intervention needs to be active and relevant to piss stable macroeconomic with a favorable environment for private investment; growth with job-creation, initially led by labor intensive export forward motion; highly invest in developing human capital especially primary and secondary education for better †educated labor force; create favorable environment for foreign direct investment with careful collective technology which can spillover to help develop the domestic industry la ter on… In brief, human capital and technology should be more focus to achieve growth in the long run.Being a latecomer, Uganda has chance to learn from successful economic development model, but the model should be modified to adapt the situation of the country and overturn failures of the early comers. 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