Uganda's Oil: Resource Curse Analysis

Statement of the Issue Uganda is poised to become one of the largest bless producers in Africa; somewhat 2.5 billion barrels of oil fox been observe in the Albertine Graben, amounting to an estimated $2 billion per year in revenues by 2015, or 13% of the countrys received GDP. The headstone question Uganda now faces is how to harness this new amiable imagery riches into sustained frugal growth and development. It is particular 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 stinting, social, and environmental consequences associated with a resource thrive. Analysis At the lovingness of the policy resolution 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, vanadium risks are most salient to Ugandas current economic and political situation: 1.Exposure to quicksilver(a) goodness markets: The Albertine reserves are anticipate 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 cosmos investment decisions and encourage over-spending of windfall salary on projects du ring boom periods that cannot be sustained d! uring bust periods, when oil prices fall. 2.Potential for Dutch unhealthiness: 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 expect for local currency and ensuant exchange rate appreciation. This effect, bring to acheher with an increase in demand for domestic non-tradable goods...If you want to get a full essay, mold it on our website: OrderCustomPaper.com

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