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Ugandan Officials Urge Asian Investors to Return

Ousted business community is seen as crucial to economic recovery

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TWENTY years after former President Idi Amin ousted the country's 70,000 Asians, President Yoweri Museveni is inviting them to return in a bid to jump-start the country's failing economy.

The streets of Kampala are cracked and crumbling, and half-built, large-scale construction sites, untouched since 1972, are now covered with lush vegetation. Only now is the government making a concerted effort to rebuild the capital, laying new telephone and electricity lines.

But by most accounts, total rehabilitation of the country's infrastructure will require investments that only the ousted Asian business community can bring.

This presents two problems for the government: how to assuage African resentment toward the returning Asians and how to restore Asian property rights. Solving both will require political nerve.

"When Amin expelled 70,000 Asians, it was an enormously popular move," says a senior Western diplomat. "Twenty years later, the same attitude persists. It is difficult to overestimate the collective resentment of Asians by Africans."

One reason for the government's renewed interest in Asians is its acknowledgment of the critical need for Asian business. Asian companies once employed thousands of workers and were the backbone of the nation's economy.

"Before Idi Amin, it is no exaggeration to say that all the economy was in the hands of the Asians," says a World Bank economist here. "They stimulated production and could secure credit."

The government has paved the way for new investment by streamlining the system for big investors, who are mostly Asian. The new Investment Authority, which approves applications for projects that require a minimum $500,000 investment, has put an end to the previous process of visiting 30 separate and often unhelpful offices that, in the end, deferred most projects for years.

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