Ugandan Infrastructure and FDI

I was very pleased to have the opportunity to meet with HE Yoweri Museveni the President of Uganda last weekend while he was passing though the UK on the way to New York. President Museveni hosted CHOGM and Commonwealth Business Forum in 2007, it was good to catch up and talk.

A couple of Points he raised were of particular interest;

1)
Firstly, Uganda is re-prioritising reducing the Infrastructure gap as quickly as possible. A renewed focus on building and renovating, roads, rail, ports and especially power generation and delivery will remove one of the largest hurdles to development and growth.

2)
The Second point was perhaps the more pertinent; President Museveni made it clear that while he will more than welcome Foreign Direct Investment, the Ugandan Government was prepared to pursue large Infrastructure projects alone. The Financial crisis has made accessing traditional sources of funding harder than ever before, and with the discovery of oil in the Lake Alberta region earlier this year; Uganda now has a greater confidence that it can find its own solutions to its infrastructure issues.

The government is continuously increasing its allocation for infrastructure projects in annual budgets, this is good news. Uganda and other African countries are becoming more confident in shaping their future, similar sentiments were expressed by the Presidents of Ghana and Rwanda when I met them recently.

The G20 and Global Trade

The G20’s agenda has radically changed over the last year; discussion now centres on the financial crisis and the future management of the global banking system. I am saddened to see Global trade had slipped off the G20s radar, with the Doha Round looking increasing unlikely to be revived this year further talks on this important topic are needed.

Despite the current economic turmoil the Global Trade is growing and increasing, particularly Intra-Asian Trade, the Asian Development Bank recently stated that “the region would grow more strongly than expected this year and in 2010…Despite [difficult] conditions in the global economic environment, developing Asia is poised to lead the recovery from the worldwide slowdown”.

Asia’s continued growth is despite the decline in Trade with the traditional western markets, growth has benefited from strong Intra-Asian trade. Intra-Asian trade has helped maintain growth while the largest export markets have dramatically reduced their spending. CBC feels that Intra Africa trade can follow the same model; we have been working with governments and the private sector over the last 10 years to enhance this. We have seen impressive increases and look forward to working with partners to push this even further.

We hope that global trade will soon be back on the agenda for G20 meetings.

A socially relevant banking system

It is clear that the G20 meetings of Heads of Government and Finance Ministers are becoming a useful forum for tackling the banking crisis. Sharing ideas and experience is essential for the development of a new legal framework for the banking industry. The framework must walk a narrow line of preventing the kind of extreme risk taking that caused the financial crisis, without stifling the banking sectors ability to innovate.

What is clear is that banks can no longer be seen as an offset part of society, answerable to no one. If banks are so important to a Country that they cannot be allowed to fail, it is essential that they are not seen to be performing ‘Socially useless activities’ as Lord Turner, Head of the FSA put it.

It is a good sign for the Banking Industry and for all of us, that those who work in the Sector have been soul searching and are beginning to see the need for a socially relevant industry. Speaking in the FT over the weekend the Chief Executive of Mitsubishi UFJ Financial Group, japans largest bank, said “if we blindly pursue profits to an excessive degree, it results in many things going wrong”. He argues, quite rightly I think, that a banks role should be “as a lubricant for economic activity” and that financial innovation is fine “as long as it leads to greater social welfare”.

Should History Limit the Commonwealth?

Members of the Commonwealth are predominantly linked by their history with the British Empire, but should this be the limit of the Commonwealth? Should other countries that sign up to the association's beliefs be welcomed into the club?

The Commonwealth’s focus on multi party democracy, human rights, the rule of law, good governance, free press, and socially responsible market orientated policies give it a strong legitimacy in today’s world and allows for the association to become an even stronger force for good.

The shared use of the English language is one of the Commonwealths strongest features. Alongside similar administrative, legal and financial practices it makes doing business in the commonwealth easy. The Shared language makes for the easy and equitable transfer of knowledge around the associations nations.

I see no reason why the Commonwealth should not expand to encompass all nations that share similar views and follow similar practices. Perhaps commonwealth expansion should be one of the topics in the Royal Commonwealth Societies ‘Commonwealth Conversation’ after all a bigger commonwealth would be good for business.