Oil Discovery in UgandaOil Discovery in Uganda

Managing Expectations Managing Expectations

Godber TumushabeExecutive Director/Policy AnalystAdvocates Coalition for Development and Environment (ACODE) www.acode-u.org

Discussion Points on the Paper Presented at an EPRC Workshop

EPRC Offices, Kampala: March 2, 2010

Strength of the PaperStrength of the Papero Good theoretical foundation – particularly

the discussion on the concept of expectations management.

o Extremely useful analysis of the case of Norway in relation to the oil curse.

o A fairly alternative argument about the oil curse – that the curse is not actually about the natural resources but rather, economic and political mismanagement –although this argument is not pursued in a more rigorous manner.

o and could have been enriched by the discussion on other traps: conflict, landlockedness with bad neighbors and bad governance in small country (Paul Collier: The Bottom Billion, 2007)

Methodological issues with the Methodological issues with the paperpaperoMethodology- the reference to primary data is not evidenced in the paperoA more detailed description of the

number of people interviewed, their categories and how there responses relate to each could strengthen the empirical basis of the paper.

o The data on economic management & export performance is fairly out of date.

Substantive Issues with the paperSubstantive Issues with the paper

oA number of “casual” conclusions- in the event that the democratic process does not get derailed, Uganda is likely to witness increased political competition and exaggerated promises to the electorate (ref 4.4)

oThe stakeholder analysis section (4.5) – in addition to Bunyoro, there are also Ugandans in general.

Substantive Issues with the paperSubstantive Issues with the paper

o There are laws governing the exploration of oil which give legal effect to the oil and gas policy – although these do not address a range of key issues including revenue sharing and revenue management.

o The GoR-DRC agreement could be cited as a useful source of authority- or even key elements of the agreement and their implications discussed.

The political economy discussion is The political economy discussion is deficient as it does not address issues of deficient as it does not address issues of

governancegovernanceo State Capacity – related to a states’ power

and ability to enforce rules that are consistent and predictable.

o Rule of law – that establishes among other things property rights and limits the states’ discretion in manipulating those rules.

o Democratic institutions – that further limit exercise of state discretion by holding governments accountable to their citizens.

o An active citizenry - devoid of fear and manipulation that acts as front line defenders of democracy [modified from Francis Fukuyama]

Causes of Governance Causes of Governance FailuresFailures

Bad Bad LawsLaws

Low Public Low Public Sector CapacitySector Capacity

Political Market Political Market ImperfectionsImperfections

UninformeUninformed d

CitizenryCitizenry

Political Political CredibilitCredibilityy

PolarizatioPolarizationn

Four specific issuesFour specific issueso Responsibility and accountabilityo Transparency and access to informationo Revenue sharing and balance of power

– centralized revenue management with a distorted budget allocation archiecture will strengthen central authority while undermining alternative power centres at the local level.

o Environmental and livelihood security and sustainability need to be co-drivers in the exploration and exploitation process.

BIG PICTURE SYSTEMIC BIG PICTURE SYSTEMIC FAILURESFAILURES

4 Political-Economic Issues 4 Political-Economic Issues Relevant to Managing Relevant to Managing

ExpectationsExpectations

1.1. Breakdown of Trust in Breakdown of Trust in GovernmentGovernment

----eroded by endemic corruption----eroded by endemic corruption

1.1. Breakdown of Trust in Breakdown of Trust in GovernmentGovernment

----eroded by vested interest in ----eroded by vested interest in landland

2.2. Growing Ethnic Growing Ethnic Nationalism – increasingly Nationalism – increasingly

seen as a threat to seen as a threat to central authoritycentral authority

The Twelve Indicators Used by the Failed States Index

Social I ndicators

I -1. Mounting Demographic Pressures

I -2. Massive Movement of Refugees or Internally Displaced Persons creating

Complex Humanitarian Emergencies

I -3. Legacy of Vengeance-Seeking Group Grievance or Group Paranoia

I -4. Chronic and Sustained Human Flight

Economic I ndicators

I -5. Uneven Economic Development along Group Lines

I -6. Sharp and/or Severe Economic Decline

Political I ndicators

I -7. Criminalization and/or Delegitimization of the State

I -8. Progressive Deterioration of Public Services

I -9. Suspension or Arbitrary Application of the Rule of Law and Widespread

Violation of Human Rights

I -10. Security Apparatus Operates as a "State Within a State"

I -11. Rise of Factionalized Elites

I -12. Intervention of Other States or External Political Actors

3.3. The Character of the State of The Character of the State of UgandaUganda

Uganda increasingly seen as a failing State

4.4. Regime Survival PoliticsRegime Survival Politics

oPublic policy and decision-making in the petro-political era will increasing be defined by regime survival politics:

onot by public opinion andoand public expectations do not matter.

“Iran’s President denies the holocaust, Hugo Chaves tells Western leaders to go to hell, and Vladimir Putin is cracking the whip. Why? They know that the price of oil and the pace of freedom always move in opposite directions. It’s the First Law of Petropolitics, and it may be the axiom to explain our age.” Thomas L. Friedmand, The First Law of Petropolitics.