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You searched for: Content Type Working Paper Remove constraint Content Type: Working Paper Publishing Institution Center for Global Development Remove constraint Publishing Institution: Center for Global Development Political Geography Uganda Remove constraint Political Geography: Uganda Publication Year within 10 Years Remove constraint Publication Year: within 10 Years Publication Year within 25 Years Remove constraint Publication Year: within 25 Years Topic Natural Resources Remove constraint Topic: Natural Resources
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  • Author: Alan Gelb, Anton Dobronogov, Fernando Brant Saldanha
  • Publication Date: 07-2014
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Natural resources are being discovered in more countries, both rich and poor. Many of the new and aspiring resource exporters are low-income countries that are still receiving substantial levels of foreign aid. Resource discoveries open up enormous opportunities, but also expose producing countries to huge trade and fiscal shocks from volatile commodity markets if their exports are highly concentrated. A large literature on the "resource curse" shows that these are damaging unless countries manage to cushion the effects through countercyclical policy. It also shows that the countries least likely to do so successfully are those with weaker institutions, and these are most likely to remain as clients of the aid system. This paper considers the question of how donors should respond to their clients' potential windfalls. It discusses several ways in which the focus and nature of foreign aid programs will need to change, including the level of financial assistance. The paper develops some ideas on how a donor like the International Development Association might structure its program of financial transfers to mitigate volatility. The paper outlines ways in which the International Development Association could use hedging instruments to vary disbursements while still working within a framework of country allocations that are not contingent on oil prices. Simulations suggest that the International Development Association could be structured to provide a larger degree of insurance if it is calibrated to hedge against large declines in resource prices. These suggestions are intended to complement other mechanisms, including self-insurance using Sovereign Wealth Funds (where possible) and the facilities of the International Monetary Fund.
  • Topic: Economics, International Trade and Finance, Natural Resources, Foreign Aid
  • Political Geography: Uganda, Kenya, Tanzania, Ghana
  • Author: Alan Gelb, Stephanie Majerowicz
  • Publication Date: 07-2011
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: In 2009, commercially exploitable reserves of oil were found in the Albertine Lakes Basin in Uganda. Along with a number of new oil exporters, Uganda now faces the challenge of using the new resources to advance its development agenda, while avoiding the corrosive effects oil often has on governance. This paper considers the tradeoffs and potential impact of alternative uses of the oil rent. It argues that alternative approaches towards absorbing rents should be judged from two perspectives – the direct impact on growth and living standards, and the indirect effect on governance. The Ugandan authorities favor using the oil revenues to build much-needed infrastructure; while this could have very large benefits, evidence of Uganda's already deteriorating governance and mounting corruption raise questions about its capacity to wisely invest the oil revenues. This paper considers an alternative—distributing oil rents to the population through cash transfers—as a potential tool to mitigate some of the governance risks associated with oil revenues by giving Ugandan citizens a stake in their own resource wealth, and considers the strengths and limitations of such an approach.
  • Topic: Oil, Natural Resources, Governance
  • Political Geography: Uganda, Africa