The Major Threat to Oil Benefits
Issue 12, November 2013 BLACK MONDAYNewsletter Citizen Action Against theft of our money without SHAME! EDITORIAL t a glance it is a no-brainer: A THEFT: The major country discovers oil, extracts it- Asince the world demand for oil is never-ending, starts scooping dollars, builds infrastructure, businesses start flowering, and standards of living im- prove dramatically. threat to oil benefits But wait a minute. If you take a closer look, oil-producing countries are not following identical trajecto- ries leading to prosperity – in fact there are many examples of oil lead- ing to poverty. There is another set of factors that determine if oil will benefit any given country, like legal frameworks, com- pliance to international agreements, business environment, labour force skills, infrastructure, social stability, ap- propriate economic mechanisms, trans- parency and corruption, and others. If you take the prime example of well-managed oil wealth, Norway, oil in itself did not lead to prosper- ity. Norway was a developed country even before they struck oil; and they had strong governance mechanisms in place before the oil started flow- ing. But then again, Norway is one of the least corrupt countries in the world. Or let’s take Nigeria. They are Africa’s leading oil producer, yet al- most half the population lives below the poverty line-in other words they are in a worse position than Uganda. Why? Because Nigeria is one of the Inside this issue >> world’s most corrupt countries. n the “Uganda Vision 2040”, the Nation- This is the ideal scenario, and one that al Planning Authority envisages a land most adult Ugandans who have slowly wit- This is the crossroads Uganda is Iof wealth and stability: 80 % of roads nessed basic social services crumble around at now.
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