Dialogues: USA Africa Dialogue Series

Love Thy Neighbour

October 30, 2012

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.

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