Government is lieing you can have economic growth without development

Rwabwogo and his acquaintances are quick to make a comparison between the revenue collections of 1986 and to-date. It’s true that the figures have tremendously increased from Shs 500 billion to Shs 24 trillion. But it is also possible to have economic growth without development. I.e. an increase in GDP, but most people don’t see any actual improvements in living standards.

  1. Economic growth may only benefit a small percentage of the population. For example, if a country produces more oil, it will see an increase in GDP. However, it is possible, that this oil is only owned by one firm, and therefore, the average worker doesn’t really benefit.
  2. Corruption. A country may see higher GDP, but the benefits of growth may be siphoned into the bank accounts of politicians
  3. Environmental problems. Producing toxic chemicals will lead to an increase in real GDP. However, without proper regulation it can also lead to environmental and health problems. This is an example of where growth leads to a decline in living standards for many.
  4. Congestion. Economic growth can cause an increase in congestion. This means people will spend longer in traffic jams. GDP may increase but they have lower living standards because they spend more time in traffic jams.
  5. Production not consumed. If a state owned industry increases output, this is reflected in an increase in GDP. However, if the output is not used by anyone then it causes no actual increase in living standards.
  6. Military Spending. A country may increase GDP through spending more on military goods. However, if this is at the expense of health care and education it can lead to lower living standards.

This explains why we have more schools in the country and Uganda has seen a rapid increase in the number of pupils going to school but at the high end potential employers are quick to decry the quality of our graduates.

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