Uganda - Future trends

At the outset of 2001, Uganda has the potential to diversify its economy, and there are signs that alternatives to the present substantial reliance on the export of coffee are arising. But in the face of continually falling coffee prices on international markets, in order to prosper in the 21st century diversification of the economy is essential. Unless there is a serious unforeseeable crisis Yoweri Museveni will remain as president at least until 2006, and Uganda will continue on its path of free market reform. This reform will continue to be backed-up by substantial aid from the World Bank, the IMF, the EU and other donors.

There will be an intensification of the privatization of parastatals. The revenue freed-up from previously subsidizing parastatals may allow the government to spend a greater proportion of GDP on essential public services such as education and health. Without investment in these areas an unhealthy and poorly educated workforce will constrain improved social and economic development. GDP growth for 1999-2000 was 5.4 percent, a considerable decline from the highs of 7 percent in 1995 and 1996. This is some indication of the economy's growth beginning to stabilize after the essential reconstruction work undertaken from 1987 onwards. In light of this evidence, it is likely that annual GDP growth will remain at around 5 percent or less for the next 5 years. A continued drain on government resources is Uganda's involvement in the ongoing war in the Democratic Republic of the Congo (DRC). At the beginning of 2001 Museveni was faced with a dilemma between withdrawing and allowing the potential for increased destabilizing attacks upon Uganda by forces based in the DRC or to remain involved in an unpopular and expensive war.

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