Ethnic Discord : Asians Return to Hope and Hostility in Uganda : Expelled 20 years ago by Idi Amin, they are starting to reclaim their land and property. But much has changed since they left.

Sherahi Jaffer had just opened a $1.5-million hotel in downtown Kampala when Idi Amin ordered all Asians to leave the country within 90 days.

“Someone from the military had told me I was a fool to build the hotel because they were just going to take it away from me,” said Jaffer, 68, the Ugandan-born son of an Indian cotton trader who immigrated around the turn of the century. “But I never thought they would just take our property without compensating us and throw us out.”

Yet on Aug. 9, 1972, Amin did just that. Accusing Asians--namely Indian and Pakistani immigrants--of exploiting blacks and “milking the economy,” the former dictator stripped them of everything they owned, then deported them. More than a third of the 70,000 people affected were Ugandan citizens.

Jaffer, then a member of Parliament, joined the Asian exodus to Canada, Britain, the United States and India. Accompanied by his wife and six children, he eventually resettled in British Columbia and bought a poultry farm there.

Now he is among the 2,000 Asians who have returned to Uganda under a new government policy to reclaim the land and buildings that they left behind two decades ago. The 8,000 properties affected--now worth about $800 million--include mansions, apartment buildings, commercial complexes and tea and sugar plantations, many of which are empty and in a state of utter disrepair.

The official policy to return expropriated property actually began in 1982 under then-President Milton Obote. But it was only last year when the World Bank threatened to withhold a $125-million structural adjustment loan to Uganda that government officials began acting in earnest. Hoping to finally close this chapter in the nation’s history, the authorities have set an Oct. 30 deadline for submitting claims. After that, any property that has not been spoken for will be auctioned off.

Many Ugandans believe the return of Asian investors is a crucial step toward rebuilding a nation still reeling from decades of civil war. Up until 1972, Asian entrepreneurs and industrialists were the backbone of the Ugandan economy, controlling key areas of trade and commerce.

But others resent the Asians’ return to their former positions of economic dominance.

“A lot of people are bitter because Asians are taking back what they thought had become theirs,” said Margaret Ndekera, a 35-year-old black Ugandan businesswoman. “Some people have even burned up buildings when they found out that they were going to be repossessed.”

So far, about 2,000 of the confiscated properties have been returned to their pre-1972 owners. Entire blocks in downtown Kampala have changed hands, sparking a renovation frenzy.

But more than half of the properties have yet to be claimed, according to the Departed Asians Property Custodian Board, a government-appointed panel that acts on compensation requests.

Mumtaz Kassam, an Asian attorney who represents dozens of clients seeking repossession, insists that government officials should be doing more to locate the legal owners.

“We’ve asked them to at least make up lists with the addresses of the properties, but they say it would cost too much,” said Kassam, 36, who first returned in 1986 to reclaim her family’s 200-acre coffee farm outside Entebbe.

Forming a potentially volatile backdrop to the government’s policy are racial tensions rooted in Uganda’s colonial past.

Long before the arrival of the British in the late 19th Century, Indian merchants based in Zanzibar controlled much of the trade between East Africa, the Arabian peninsula and India. In later years, British colonials imported indentured Indians to build the Ugandan railway.

From the late 19th Century to the end of World War II, a key element of British colonial strategy was to promote the entry of Asians into the commercial sector while at the same time blocking the development of African trade. While Asians were granted exclusive rights to buy and market local produce, blacks were denied the same opportunities and relegated to peasant farming.

Over time, the gulf between the two classes widened, fueling anti-Asian sentiment. And by 1972, the pent-up frustrations of black Africans were ripe for exploitation by Amin.

“Amin spoke the language of nationalism,” Mahmood Mamdani, an Asian political scientist, said in a 1992 speech. “At a stroke, the 1972 expropriation sliced off the dome of local privilege. . . ,” added Mamdani, who was himself expelled.

But the move also plunged the country into economic chaos.

Many firms quickly collapsed due to a lack of capital, dwindling inventories and a lack of business experience on the part of the new owners. Within three years, the government was faced with a slew of bankrupt businesses and an economy in shambles.

“Shops were given to people who didn’t even know where to order the new inventories from,” Ndekera said. “Everyone just thought the money was coming from heaven.”

Still, despite the terror that Amin would later unleash on the Ugandan people, many black Ugandans hold up the 1972 expulsions as one of the few positive legacies of his regime. For the first time, they argue, black Africans had access to commercial markets.

Amin used the Asian properties to create an elaborate system of political patronage. He doled out the choicest sites to the military and distributed the leftovers in a national lottery. Each successive government in turn redistributed the properties to its own political supporters. Consequently, many of the homes and businesses are now occupied by civil servants and military officers.

The repossessions have pitted these current occupants--many of whom have been renting from the government for as little as 10% of market value--against the returning owners.

In some cases, the two sides have managed to resolve their differences. But other times, negotiations have ended in eviction. Some tenants have flatly refused to budge, even threatening violence, according to some Asian owners.

Meanwhile, many tenants complain that owners have raised rents to force them out. But owners like industrialist Mayur Madhvani counter that all they are asking for is a fair return on their investment.

“What we’re saying is, let us fix up the property to make it better for you, and then after that we’ll have to charge you some more rent,” said Madhvani, 44, one of five brothers who own a multimillion-dollar empire that includes a 22,000-acre sugar factory, a brewery, textile business and other assorted real estate. “We’re not saying we want to throw you out.”

Yet for tenants like Shaban Matovu, the end result is often just that.

Back in 1973, Matovu said, the government gave him a license to operate a restaurant in a building downtown that had once belonged to an Asian businessman. For the past 20 years, he said, he has kept up the building and invested $65,000 of his own money in equipment.

But on July 12, the owners appeared with a court order telling him to vacate the premises. On a recent afternoon, two men armed with shotguns guarded the entry, denying access to the two-story complex.

“I came back one day to find it all locked up and chained,” Matovu said. “I didn’t even have a chance to get my things out.”

Despite the more than 2,000 properties repossessed so far, only about 400 Asians have come back to stay. Most of these are businessmen and industrialists who left millions of dollars’ of assets behind.

“Most people come, sell off their property and go back to wherever they came from,” said Ruth Namirembe Olije, a spokeswoman for the Departed Asians Property Custodian Board. “I guess many of them don’t want a repeat of their experience in 1972.”