Paul Collier and Astrid Haas just wrote an IGC blogpost “Why Kampala holds the single biggest growth opportunity for Uganda.” Single biggest? Well indeed, the first rule of blogging is HYPERBOLE, but then the first rule of reading blogs should be a heavy dose of scepticism. Second, I’m reminded of Michael Clemens’ presentation on The Biggest Idea in Development That No One Really Tried. Might migration (the kind that Paul apparently thinks is harmful for poor countries) hold a bigger growth opportunity for Uganda than better urban planning in Kampala?
At present, around 1% of Ugandans live and work overseas (roughly 400,000 of a population of 37.6 million). This 1% of the population send home 4% of Uganda’s GDP in remittances. According to a Gallup poll, around 35% of Ugandans would permanently move to another country if they were allowed to. If they all could, and sent back as much as current Ugandans abroad do, that would be a one-off 140% increase in Uganda’s economy. Or if Uganda had the same level of emigration as the UK does (8%, 5.2 million of a population of 64.1 million Brits live and work overseas), that would be a 28% increase in Uganda’s economy. And that’s totally ignoring the increase in income for the actual migrants themselves. Median income in Uganda is $2.5 per day (in PPP), so even a job on UK (“relative-") poverty pay levels of around $23 per day would be a NINE-FOLD increase for them. Needless to say, the main reason that more Ugandans don’t work in high-wage economies, is that the governments of high-wage countries impose restrictions on the entry of people, particularly those from poorer countries.
Brain drain I hear you say? Michael Clemens killed that one too (ethically it is pretty unreasonable to restrict individual's freedom to such an extreme extent, even if there were any real evidence that emigration of highly-skilled people hurt an economy, which there isn't anyway).
So yes, clearly planning Kampala’s urban development is important for growth. But does it really have more “potential” than something that could double the country’s economy overnight?
At present, around 1% of Ugandans live and work overseas (roughly 400,000 of a population of 37.6 million). This 1% of the population send home 4% of Uganda’s GDP in remittances. According to a Gallup poll, around 35% of Ugandans would permanently move to another country if they were allowed to. If they all could, and sent back as much as current Ugandans abroad do, that would be a one-off 140% increase in Uganda’s economy. Or if Uganda had the same level of emigration as the UK does (8%, 5.2 million of a population of 64.1 million Brits live and work overseas), that would be a 28% increase in Uganda’s economy. And that’s totally ignoring the increase in income for the actual migrants themselves. Median income in Uganda is $2.5 per day (in PPP), so even a job on UK (“relative-") poverty pay levels of around $23 per day would be a NINE-FOLD increase for them. Needless to say, the main reason that more Ugandans don’t work in high-wage economies, is that the governments of high-wage countries impose restrictions on the entry of people, particularly those from poorer countries.
Brain drain I hear you say? Michael Clemens killed that one too (ethically it is pretty unreasonable to restrict individual's freedom to such an extreme extent, even if there were any real evidence that emigration of highly-skilled people hurt an economy, which there isn't anyway).
So yes, clearly planning Kampala’s urban development is important for growth. But does it really have more “potential” than something that could double the country’s economy overnight?
