Israel a better model for Uganda's Economy

Israel isn’t just exporting technology these days. After decades of financial stability and recent sharp economic growth, Israel’s economy is now seen as one worth emulating.

This week, in a first-time-ever event, a delegation of central bankers from Africa was in Israel to learn about ways to improve their economies in order to make them safer, more attractive to investors, and more productive. In fact, said Professor Emmanuel Tumusiime-Mutebile, the director-general of the Central Bank of Uganda, “I can’t think of a better role model for my country to follow than Israel. As far as I’m concerned, Israel provides a far better model for us than the US or Europe.”

Joining Tumusiime-Mutebile were central bank governors from five other countries in sub-Saharan Africa: Kenya, South Sudan, Zambia, Ghana and Swaziland. The trip was sponsored by America’s Voices in Israel (AVI), a group that organizes missions and trips for influential members of American society, including Hollywood celebrities, radio talk show hosts, Christian pastors, and leaders of the African-American and Hispanic communities.

The idea is “to reach out to key opinion molders and influential personalities who can help counter the distortions and misrepresentations about Israel that are increasingly common,” said George Rohr, co-founder and co-managing general partner and chairman of America’s Voices. In recent months, for example, the organization has brought TV actors Lori Loughlin, Greg Germann, and Omar Epps.

Now, AVI has begun organizing trips for influential figures in Africa, with Rohr earlier this year announcing the formation of Africa’s Voices in Israel. It parallels the AVI agenda by offering prominent African personalities an opportunity to explore Israel’s business, cultural, historical and religious landscapes. And, in addition, the trips will emphasize areas where Israel and Africa can work together on mutually beneficial projects, said Rohr.

The visit by the central bank presidents is the first of what will hopefully be many such trips, said Mike Landau, who is leading the mission. “We decided to start with this mission because we feel Israel has a lot to offer African economies, in terms of technology and aiding them in areas where they are seeking assistance. The vast majority of the countries in sub-Saharan Africa have overwhelmingly agricultural economies, and Israel has a great deal of advanced agricultural technology to offer. Israeli companies can offer a range of turnkey solutions for all sorts of inefficiencies in the agricultural cycle.”

The governors toured kibbutzim and moshavim, granaries, and high-tech companies. Among the technologies that most interested delegation members, said Tumusiime-Mutebile, were “the techniques used to reduce the post harvest losses.” Post-harvest losses due to rot, insect infestation, and other storage issues are one of the biggest drains on the economy of Uganda and other African countries, the governor said.

But Uganda is looking for more than just agricultural technology. Tumusiime-Mutebile hopes to take a slice of Israel’s entrepreneurial spirit with him. “With a little help from Israel we could be the start-up nation of Africa,” he said. “There are some things we can adapt from Israel’s start-up economy that would apply to us.”

As a long-time banker (he has been active in the private and public banking sector in his home country for over two decades), Tumusiime-Mutebile believes that in order to escape the cycle of agricultural boom and bust that plagues much of the developing world, Uganda will need to develop non-agricultural economic sectors. As a country that has “pulled itself up by its bootstraps to become a world technology power,” Israel has much to teach Uganda, Tumusiime-Mutebile said.

But money and economic management is the governor’s main concern, and Tumusiime-Mutebile said that Uganda, and the rest of sub-Saharan Africa, had much to learn from Israel in this area as well. Uganda and Israel both underwent major economic shocks in the past decades: In Israel, a period of triple-digit inflation devastated the economy for a period in the 1980s, and for Uganda, it was the reign of Idi Amin that did in the country’s economy.

Tumusiime-Mutebile has been governor of Uganda’s central bank since 2000, and both he and his predecessor, he said, were still dealing with the aftermath of the Amin era. Inflation has been high in the country, and as a result, the country’s interest rate is in the 20% range. Israel, too, had high interest rates for a period, while the Bank of Israel worked to bring inflation under control. The country has maintained hard-fought macroeconomic stability, which he attributes to the “wise leadership” of Bank of Israel Governor Stanley Fischer. Tumusiime-Mutebile added that he spoke for the other governors, who saw him as a “senior statesman” in matters monetary, due to his long career in the fields of banking and government.

Asked why Uganda, one of the most influential economies in Africa and a country with a population of over 30 million, would seek advice from Fischer and not, say Ben Bernanke of the Federal Reserve, Tumusiime-Mutebile said he did not want to comment on Bernanke’s performance as Fed chief. However, he said, one of the attractive things about Israel’s monetary policy was that it was managed by Fischer, “and we know that Bernanke is not involved in the Bank of Israel’s programs.” The same held true for officials of Europe’s Central Bank as well, “especially at this time,” the governor said as diplomatically as possible.

And given a choice, Tumusiime-Mutebile said, his country would rather work with Israel. “We in Uganda have always been close to and have always liked Israel. It was only for the short period that Idi Amin was in power that the Ugandan people could not express that friendship.”

Amin was the dictator whose Palestinian terrorist allies hijacked an Air France flight that had originated in Tel Aviv and brought it to Entebbe Airport, where it was liberated on July 4, 1976, by Israeli commandoes led by Yoni Netanyahu, younger brother of Prime Minister Binyamin Netanyahu. The younger Netanyahu was killed in the raid, which managed to rescue all 102 Israeli hostages.

With the end of the era of Libyan leader Muammar Gaddafi, whose shadow dominated much of sub-Saharan Africa, countries in the region feel more free to pursue their own policies.

“When Gaddafi was alive, we were a bit restrained because of his influence on our economy, due to Libyan government investments,” said the governor. “But that has nothing to do with our love for Israel and the Jewish people, and our desire to work with you.”

If anyone has any doubts, he added, all they had to do was look at his name. “Emmanuel, of course, is the Hebrew word for ‘G-d is with us,’ and the first part of my family name, Tumusiime, means the same thing in Swahili. Israel is G-d’s people, and my names speak of walking with G-d,” the governor added. “How could we not love the Jewish people?”

By DAVID SHAMAH
The Times of Isreal
23 June 2012