Statement of the Issue Uganda is poised to become one of the largest inunct producers in Africa; more or less 2.5 billion barrels of oil constitute been observe in the Albertine Graben, amounting to an estimated $2 billion per year in revenues by 2015, or 13% of the countrys sure GDP. The headstone question Uganda now faces is how to harness this new psychological imagery riches into sustained frugal growth and development. It is lively 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 frugal, social, and environmental consequences associated with a resource sail through. Analysis At the lovingness of the policy consequent 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 a ttributed to a number of causes, quin risks are most salient to Ugandas current economic and political situation: 1.Exposure to quicksilver(a) goodness markets: The Albertine reserves are judge to render government revenues as high as 10 to 15 share of current GDP, bringing in roughly $2 billion per year.
Increased dependence on exporting 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 mankind investment decisions and encourage over-spending of windfall salary on projects during boom periods that ! cannot be sustained during bust periods, when oil prices fall. 2.Potential for Dutch complaint: 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 accede for local currency and ensuant exchange rate appreciation. This effect, twin with an increase in demand for domestic non-tradable goods...If you want to pop a full essay, mold it on our website: OrderCustomPaper.com
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