Controlling Economic Liberalisation

To reverse decades of economic stagnation in Africa, after the Cold War Western donors and the Bretton Woods Institutions advocated the adoption of a package of reforms. These focused on rolling back the state and ending its interventionist and protectionist practices through deregulation and removal of state-induced distortions such as marketing restrictions and price controls, implementing currency devaluations, the adoption of stricter monetary and fiscal policies and the privatisation of state enterprises. Yet while the ruling parties in Uganda, Ethiopia and Rwanda were aware that adoption of such a package facilitated access to Western development assistance, they also recognised that continued control of their economies played a fundamental role as a regime maintenance prop. This chapter explores the arguments they presented for continued high levels of state intervention, including ideas around their building of developmental states, and the methods used to circumvent Western prescriptions. It examines their manipulation of privatisation exercises and their construction of business empires which fed party coffers, and how they continued to exercise extensive control over their economies in ways which also allowed them to secure significant amounts of Western loans and grants intended for economic adjustment purposes.