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The ironies of Socialism versus Neo-Liberalism; why I believe in a Keynesian approach instead of the Socialism or the Neo-Liberalism

Socialism churchill

Well, it is about that time, I make mockery of two statues of civilization and ideas that rules the world while not hoping the blindly followers of either comes to attack my person, my thoughts or my widely allegation on the parts. Both of the political views and framework have made a difference and is the reason why we have societies like we have today.

The main parts of socialism is that there is policies and regulations that fit for social and bigger government who cares for the citizens, like subsidized health-care, schools, university, transport and local government. Through taxes and higher fees on produce as the socialism need funding for the ability to make the government organizations and government programs. The Government need more taxes to able to serve the public with what they expect through the socialistic view, while the taxes are set-up in a way that the ones with more income is generating more revenue is supposed to pay more tax; than the ones that are paid less.

So with the big-government and grander government policies comes the address of the public will and citizens loses power, but that for the price of cheaper health-care, schooling and other government institutions. That stops the higher prices and free-market pricing of health care that lets major parts of the society might even be able to pay for the needed operations. So the reasoning and hateful measurement against big-government is wrong in some parts as the people are stronger when we work together and divide the expenditure on the whole society; instead of billing the whole ordeals on the single individual.

free market

Neo-Liberalism is not as straight forward as this is supposed to be measurement to weaken the state, make it liberal and little. Give more power to person instead of the government and give more choices to the citizens of the given country. The issue is that Neo-Liberalism has come with certain ideas and prospects. For instance the New Public Management (NPM) is a Neo-Liberalistic idea. NPM have given the societies and the government who added these policies more watchmen and ombudsmen then before. They have given the power away from the departments and created institutions under the departments with specialist and experts that sets the standard and gives advice to the department. While the departments still need manpower, so need also the lower-expert-institutions. So you have two fronts with specialist working the same field and advising each other. So before NPM most of the experts and brains where at the Department and Local Government that worked with a given subject or the project that needed a specialist; thanks to NPM they have become self-serving and not cut down the amount of bureaucracies have become fluent. As much as the wish for the NPM as parts of the Neo-Liberalism idea, it hasn’t created less government, but more and longer away from the decision making.

The Neo-Liberalism of free-market and starch corporate control have not given added freedom to the consumer. As the markets are controlled by less and less owners and stakeholders; the corporate power have become stronger, but more centralized in conglomerates that issues the policies and secure the profits. The riches of the corporations and the borderlines agreements are built for the corporations not for the welfare for the citizens. The original businesses we’re built for single projects or for fixed procurement that the state and citizens needed like building roads and bridges. Not gaining profits that sky-rocket and then moves away the tax-money into tax-havens. That is the Neo-liberalism ways of economies. In a way the movement of money should happen without government interference or taxation.

The Neo-Liberalism brought also an idea that was worse than the NPM. That was the Structural Adjustment Program (SAP) under the World Bank and International Monetary Fund (IMF). SAP was made in the 1980s to liberate the subsidized agriculture, health-care and other public institutions as government got great loans through the funding of IMF and WB. So they released the governments and free-market ideas that killed the Co-Op’s in the countries that was already lots of them. They had commissions and centralized crop sales through Co-Ops that served the farmers, either they produces cocoa, coffee or tea. This was a standard of fixing training, production and prices to influx together a stronger unity. The ironies of this is that the IMF and WB gave this order through SAP to Low-Developed Countries while the countries that funded this had Co-Ops in agriculture themselves and still have to this day. So with the SAP they made the inside trading before the export more intricate and gave “supposed” more power to the farmer. Instead they became more reluctant and needed more to be careful to whom they offered their crops to. As the traders from capital who went up-country could fix prices and lie about the values to earn more on the trade to export. So the farmer would not get a given price on the world-market because there we’re less voices giving the farmer a hand in the trade of their cash-crops and their goods that they we’re not consuming themselves. So the SAP agreement stalled the government institutions and weakens them together with the trading experience on the ground. The structures we’re given big loans for building up trade-networks and export facilities while dismantling the structures that secured and fueled the industry and agriculture. As the Agriculture and Industry should not get subsidized, but get funding through free-market ideal and that killed the initial funding as the cheaper production came from abroad instead of making it locally. Therefore it is more normal to Chinese, Egypt and Brazilian products than own local products in the supermarkets of Uganda, for instance. Even meat, juice and toilet-paper are imported than produced in the country. That is because of the SAP and the Neo-Liberalism ideas.

zero-hour-contracts

Another important factor of the Neo-Liberalism idea is the abolishing ideas of Workers Unions and trying to ban them. As the Free-Market should fix the pay for the worker and the business it should fix it. That is why there been less strikes and less new Unions in our day. The reason why Unions in our time is important and the socialist idea of them is that the riches of the corporations; does not seem to trickle down to the citizens; it only left back to the stakeholders and owner, not to society or the workers that works for the rich corporations. Settling this is not easy. During the Reagan and Thatcher era tried to kill of the unions for their meddling and dissolve them so to actually centralize power. Instead this killing of mining-unions and other unions in the United Kingdom have weaken the industry and the ability of workers to fix pay while the corporations come with contracts that are good for business, but not good for steady income for proper work. The recent years of cover-ups in Sports Direct that is owned by Newcastle United Mike Ashley that offers their workforce lots of “Zero-Hour Contract”. Zero Hours Contracts work in the way that the employer has more people under their wings without paying extra for them. The Contract gives not benefits or sick-leave. As the Employee is paid by the hours and amount of time they work for the employer and nothing else. So all the benefits is added to the business and none for the worker, who has to fight and bend-over to add hours as the pool of willing workers are there. Even if the Zero-Contracts are bad, the non-Union and not-allowed to unionize work-force cannot go together and fight for their benefits and rights. As the Employer can continue to use and get new workers without having to stand-by them. Sports Direct is just an example of it, there are more business who uses this model and creates massive profits as they don’t have to offer needed benefits or health-care programs to the employees. As Wall-Mart have had low-hourly pay and no health-care benefit while letting their employees sign-up to government funded programs for health-care so that the Wall-Mart employees get little paid and at the same time uses food-stamps and Medicaid instead of Wall-Mart having health-Care benefits. So the business saves the money for salaries and also save the benefits of their employees; this is something you can thank the beautiful neo-liberal ideas.

The difference with the neo-liberalistic ideal of work is that the employee would give sufficient pay and have a contract that benefits the company and the workers. As they would have social responsibility for their workers as they have health benefits through the standard with standard payments of salaries together with state fueled community health care. The Neo-Liberal is that personal pay of the health-care instead of tax-payers money. So the health-care will be opened to the once who can have insurance or ability to pay for it. Instead of funded through the tax-payers pockets as solidarity between all citizens as in the socialist idea. That cannot be seen as a problem for a liberal person, to bring solidarity and also a structured health-care that everybody pays their fees into and when needed pay a small personal fee to get access, instead of footing the whole bill on their own.

Text ZHC SportDirect

Let me finish this up with the ideals that are ironic on the matter.

  • Smaller Government under NPM has actually made more Ombudsmen and Expert Organizations. Meaning that the Government didn’t become smaller, just longer away from the Department to the Experts and the Ombudsmen that the Government want to control
  • The SAP in Neo-Liberalistic method didn’t bring wealth to the countries it was applied to. The Farmers, the government institutions got weaken, while the loans got higher and less development as the Free-Market got the resources, but without control of the Co-Ops or other ways of maintaining support of citizens. The economies became more fragile as a result of the Neo-Liberal SAP then under the Co-Ops with the control of selling cash-crops and so on.
  • The Free-Market idea of Neo-Liberalism while destroying Labor-Unions to secure more government control of the market. While deteriorating the labors ability and therefore opening for the “Zero-Hour” Contracts that gives all the advantages to the corporations and none to the employee who only get security for the hourly work and nothing else for the employee. That would not happen with stronger unions and government who could enforce the rules for corporations.

All of these is ideals against each other I myself is not a clear socialist, even if I am raised on socialist country in a social-economic balance system. I myself is a clear Keyenist in the way that I believe in free-market and free-society to an extent. That extent is that the governments automatically bails out the necessary institutions and have a hand into the banks and other needed businesses of a society. That the workers are secured and fixed through strong barriers so that the market is made sure that the governments, and also facilitate the marker for the corporations. So that the market will have input from the government as the eruptions is inevitable and needs a structure to control it.

keynes

This three main components are basic:

  • Aggregate demand is influenced by many economic decisions—public and private.
  • Prices, and especially wages, respond slowly to changes in supply and demand, resulting in periodic shortages and surpluses, especially of labor.
  • Changes in aggregate demand, whether anticipated or unanticipated, have their greatest short-run effect on real output and employment, not on prices. Keynesians believe that, because prices are somewhat rigid, fluctuations in any component of spending—consumption, investment, or government expenditures—cause output to change. If government spending increases, for example, and all other spending components remain constant, then output will increase.

So with that in mind you understand why I am in between of the socialist and the free-market neo-liberalism as the Keynesian ideas that are more subtle and securing society as the mixed of government control and free-market gives sustainable societies. Not only full freedom without security for other than the corporations which is the main mantra of the Neo-Liberalism as the individual freedom usually get used by the legal person the corporations and not coined will by the persons themselves as the belief is under the ideology of liberal ideas. Instead of having total control of the state in the Communism, and strong big-government with socialism; but the Keynesian sees it in middle of that and have a free-market with control of the wages and workers by the government. That gives a steady economy and also a greater stability in the values of inflation and stronger value of the person instead of being a commodity as resources in the free-market thinking of the neo-liberalism that have deteriorated the markets and only winner is the corporations; not the fellow human beings. Peace.

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KJE (Kampala-Jinja expressway): As expensive as it could be or more

JinjaRoad Roundabout Kampala

Kampala-Jinja Expressway KJE) the PPP road project that cost the double in 2 Years time:

Today UNRA put out a tender for the KJE or Kampala – Jinja Expressway. That will be a Public-Private Partnership, which means that the government project will be financially funding through the investors that will get back on their investment through the tolling of the commuters and traffic on the road after building the project/road. UNRA has the official follow-up of the KJE and will oversee that the company or companies that they keeps up with the set standards. Though it worrying to see how the numbers has gone up for the project from $ 0,5USD Billion in 2013 to Ministry of Transport set the contract for $ 1USD Billion on the same project. Here is the main quotes from different sources and I myself wonder if this in the re-up for a similar “Project 1034: Mukono-Katosi Road Scandal” with Corruption and also bad practices with financial issues since they did not follow “due diligence” on the contracts on that. But let’s hope, here is what that is out there now.

IMF reports in 2013 saying that the cost of the project would be $ 0,5USD Billions, that funding aren’t made with government money, but through PPP funding. This is all a part of the main issues which is this: “An additional investment of $200 million on the needed connectivity (e.g. roads, bridges) for the start of oil production in 2018 is also anticipated” (…)”Roads. The program mainly includes construction of roads linking Kampala with Jinja and with Mpigi, expected to start in FY2013/14 and be completed in five years at a cost of about $500 million each”  (IMF, 2013).

“According to the Uganda National Roads Authority (UNRA) spokesperson Dan Alinange, the government has hired the World Bank’s International Finance (IFC) as advisor to help in the tender process” (…)”The six-lane, 77km Kampala-Jinja road will be the first PPP road project in Uganda and the second toll road in the country after the $470m Kampala-Entebbe road that is currently under construction” (…)”Alinange added: “We want to reduce congestion on this corridor for Uganda. We are aware there is enormous appetite for this sort of project and that’s what gave us confidence to structure Jinja-Kampala as a PPP” (RTT, 2014).

“The project involves the development of a six-lane 77-km road project. The project aims to improve road infrastructure in Uganda, improve road safety and facilitate trade and tourism. The project will be developed on a design, build, finance and operation (DBFO) basis. The total project investment is estimated at around US$1 billion” (Martin, 2014).

“One of the roads is the Kampala-Jinja expressway estimated at about $800m (about sh2.13 trillion). The new road will help decongest the old Kampala-Jinja road that forms part of the Trans-African highway” (…)”Construction of the 80km state-of-the-art road is expected to commence in 2015. About sh200b has been earmarked for compensation of the affected people” (…)Eng. David Luyimbazi said: “The investor will recover the money through charging a toll fee from road users over a 20- 25-year concessional period.” (Ogwang).

Background from the WB:

“In 2011, PPIAF provided follow-up support to identify and prioritize potential PPP projects. Ten priority projects were identified, including the Kampala-Jinja road, which is now under implementation with the International Finance Corporation (IFC) appointed as the transaction advisor” (…)”In May 2014, IFC’s Advisory Services in PPPs signed an advisory agreement with the GOU, through the UNRA, to develop a 77 km greenfield expressway between Kampala and Jinja” (World Bank, 2015).

More from PPIAF:

“One of the priority projects – Kampala-Jinja – road is now under implementation with IFC appointed as the transaction advisor. PPIAF recently approved a grant in partnership with Trademark EA (TMEA) and IFC to support two main tasks: the development of a tolling policy and an investment appraisal guidance tool, and strengthening the Uganda National Roads Authority (UNRA’s) capacity to implement PPP projects” (…)“In May 2014, IFC’s Advisory Services in PPPs signed an advisory agreement with the GOU, through the UNRA, to develop a 77 km greenfi eld expressway between Kampala and Jinja with a possible extension to include the 17 km Kampala Southern Bypass. Together with the existing Kampala Northern Bypass the expressway would form a ring road around Kampala City. The project, with an estimated capital cost of $1 billion, will seek a concessionaire to design, build, fi nance, and operate the road as a tolled facility” (PPIAF, 2014).

KJE:

“The project involves the construction of a green field dual carriageway expressway between Kampala and Jinja. The road extends from the boundary of the jurisdiction of the Kampala Capital City Authority (approximately 3 km from the city centre) to Jinja town tying in with the proposed New Nile Bridge. Consequently the nominal length of the project road is about 77km. The existing road, which will remain as a free alternative is a class 1 asphalt paved road in a fairly good condition” (UNRA, 2014).

“The Uganda National Roads Authority (UNRA) is the implementing agency for the planned KAMPALA JINJA TOLL EXPRESSWAY. It will link the capital with the important industrial area of Jinja. Past plans have been for four to six lanes for the 77-kilometre road. Cost estimates have also varied from USD 700 million to USD 1 billion. There are reports that the ministry of transport will be floating a USD 1 billion Public-Private-Partnership (PPP) tender and that the International Finance Corporation (IFC) will be the lead financial adviser. Construction could commence in 2015 with commissioning in 2020. COMESA has declared it to be a priority Project that is an important component of the Mombasa-Kampala – Kigali northern corridor” (APA, 2014).

Progress on Capacity improvement projects around Kampala:

Kampala – Jinja Express Highway (Funded under PPP), 77km, Detailed Engineering design completed Construction will be financed under PPP. Transactions Advisor (International Finance Cooperation) is assisting in structuring the project into a bankable PPP Project. Tendering for financing and implementation is expected in May 2015″ (UNRA, 2015).

Here is the tender dropped from UNRA today:

UNRA - KJE P1UNRA - KJE P2

Also this:

Reference:

Africa Project Access (APA) – ‘Africa Project Newsletter: Issue 234’ (Nov. 2014) link: https://www.wko.at/Content.Node/service/aussenwirtschaft/NEWSLETTER-234-November-2014.pdf

Martin, Miguel – ‘MegaProject 334: Uganda to tender Kampala – Jinja Expressway next year’ (17.10.2014) link: http://infrapppworld.com/2014/10/megaproject-334-uganda-to-tender-kampala-jinja-expressway-next-year.html

IMF – ‘IMF Country Report No. 13/375: UGANDA FIRST REVIEW UNDER THE POLICY SUPPORT INSTRUMENT’ (Des. 2013) link: https://www.imf.org/external/pubs/ft/scr/2013/cr13375.pdf

RoadTrafficTechnology – ‘Uganda plans to float $1bn PPP tender for Kampala-Jinja road in 2015’ (17.10.2014) link: http://www.roadtraffic-technology.com/news/newsuganda-plans-to-float-1bn-ppp-tender-for-kampala-jinja-road-in-2015-4409054

Ogwang, Joel – ‘Govt joins World Bank to build $1.5b road projects’ link: http://www.newvision.co.ug/mobile/Detail.aspx?NewsID=641587&CatID=3

PPIAF – ‘PPIAF Supports Uganda’s Roads PPP Program’ (July 2014) link: http://www.ppiaf.org/sites/ppiaf.org/files/publication/Impact-Story-Uganda-Roads.pdf

UNRA – ‘Investor Teaser June 2014: Design, Build, Finance & Operate: Kampala Jinja Expressway (77km) & Kampala Southern Bypass (17km)’ (June, 2014) link: http://www.inspiratia.com/Content/Files/View.ashx?FileID=cb5ec032-d0e6-4218-a24e-c248fd2c6d19

UNRA – ‘ROAD INFRASTRUCTURE KEY TO DEVELOPMENT’ (2015) link: http://www.eagle.co.ug/ads/UNRA2015.pdf

World Bank – ‘Partnering to Support Uganda’s Roads PPP Program’ (25.09.2015) link: http://www.worldbank.org/en/news/feature/2014/09/25/partnering-to-support-ugandas-roads-ppp-program

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