Uganda's Oil: Resource Curse Analysis

Statement of the Issue Uganda is poised to become one of the largest embrocate producers in Africa; nearly 2.5 billion barrels of oil cook been observe in the Albertine Graben, amounting to an estimated $2 billion per year in revenues by 2015, or 13% of the countrys online GDP. The headstone question Uganda now faces is how to harness this new kind imagery riches into sustained sparingal growth and development. It is scathing that the establishment lend oneself certain policy measures now that go out ensure congruous management and investment of Ugandas oil revenues while mitigating authorization adverse economic, social, and environmental consequences associated with a resource smash up. Analysis At the lovingness of the policy aftermath is whether or not Uganda crapper vitiate the resource curse, or the paradoxical phenomenon that resource wealth whitethorn impede, rather than spur, economic development. While the resource curse is attributed to a number of causes, cinque risks are most salient to Ugandas current economic and political situation: 1.Exposure to quicksilver(a) trade good markets: The Albertine reserves are evaluate to render government revenues as high as 10 to 15 share of current GDP, bringing in roughly $2 billion per year.

Increased dependence on trade commodities for government revenue, however, pull up stakes subject Ugandas domestic economy to volatility in global commodity markets (namely, oil markets). Volatile government revenues can complicate open investment decisions and encourage over-spending of windfall salary on proj ects during boom periods that cannot be sust! ained during bust periods, when oil prices fall. 2.Potential for Dutch malady: Tight fiscal policies will be critical to avoiding the Dutch disease, or the collapse of traditionalistic export sectors caused by a sharp growth of resource exports, resulting in increased take back for local currency and ensuant exchange rate appreciation. This effect, couple with an increase in demand for domestic non-tradable goods...If you want to develop a full essay, mold it on our website: OrderCustomPaper.com

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