USAID's approach to poverty reduction : the case of Uganda

Uganda was one of the few exceptions to this pattern. Starting in 1986, the Ugandan government introduced broad economic reforms. It eliminated a straightjacket of government economic regulation and control as it liberalized both the domestic economy and international trade. In the mid-1990s, the government adopted poverty eradication as its overarching objective. From 1993 to 2000, GDP increased at a remarkable average annual rate of 6.7%, and the proportion of the population living in absolute poverty declined dramatically, from 56% to 35%. Uganda demonstrated that sound economic policies can accelerate economic growth and reduce poverty. Eliminating inefficient government crop marketing boards resulted in higher crop prices for small farmers. A massive road building program opened up new opportunities and lowered costs for poor farmers. Universal primary education was introduced to improve the skills -- and therefore the economic prospects -- of poor children. Uganda also showed that implementing pro-poor budget and social policies can accelerate poverty rates decline even faster. USAID supported Uganda's poverty reduction efforts, but at times congressional earmarks created difficulties. They reduced USAID's flexibility and made it difficult to support programs to strengthen the economic and policy environments that are crucial to helping the poor.