Teddy Sseezi Cheeye
12 July 2006
opinion
Kampala — There is a raging debate in this country: Is the discovery of oil in Uganda a curse or a blessing? The advocates of doom claim that the discovery of oil will give more financial powers to the NRM Government especially President Museveni.
Financially secured President Museveni, it is urged, would stifle democracy and become even more unresponsive to public popular demands. My answer is "yes' and "no". Historically the discovery of oil has always been a curse to the beneficiaries of moribund economic businesses. It has always caused highly charged senses of both pessimism and optimism.
When in 1860s, a young New York Lawyer, George Bissell and James Townsend, who was a president of a bank in New Haven, USA, tried to secure a loan for drilling oil, they were ridiculed by many financial moguls in New Haven. They were told " Oil coming out of the ground, pumping oil out of the earth as you pump water? Nonsense! You are crazy".
The discovery and adoption of use of oil as a cheaper source of energy compared to coal at that time, was certainly a big curse to the then lords of coal, for coal had been historically one of the main source of energy.
After 50 years of perfecting the sciences of extracting, processing and the uses of oil, the man who added economic impetus to oil was Winston Churchill, who, having been appointed the First Lord of Admiralty, in 1911, was in charge of ensuring that the British Royal Navy, then the symbol of British emperor power, was superior to the then Germany menacing navy forces on high seas.
Churchill's decision to change to oil as source of power, from using coal, for the British Navy forces, was indeed revolutionary. First it meant that British navy forces was no longer going to depend on the local Welsh Coal on which it had depended for many years.
Secondly, it meant that from then on wards, British vital security mobility was going to depend on oil from Persia (now Iran). Understandably, the discovery of oil as a strategic commodity that would increase efficiency and speed was a curse to the British coal industry, which thrived in wars, especially when more wars were threatening to engulf Europe.
Indeed, World War One established the importance of petroleum as an element of national power when the internal combustion machine over took the horse and coal-powered locomotives. On the history of oil, and the struggle for wealth and power read an 884 page book by Daniel Yergin, titled "The Prize: the epic quest for oil, money and power" Published by Free Press; 2003.
After 72 years of Churchill's scientific vision, the American, on January 1, 1983, set up a headquarters of the USA Central Command (Centcom) at Tampa, Florida. Known as the MacDill Air Force Base, Centcom is one of the five regional "unified commands" that govern American combat forces around the world. Centcom Area Of Responsibility (AOR) stretches more than 3000 miles from Egypt to Kyrgyzstan. Its strategic heart is the Persian Gulf basin, home of two thirds of the earth's known petroleum reserves.
In the last 20 years Centcom forces have fought in four major oil-related wars: Iraq-Iran (1980-1988), Persian Gulf War (1991), the Afghanistan War (2001) and the Iraq War (2003). Centcom main daily responsibility is to protect the channel of the narrow Strait of Hormuz, through which, 14 million barrels of petroleum traverse every day on their ways to the markets around the world.
Centcom is based on the doctrine of former USA President Jimmy Carter of January 23, 1980, which maintains that it is a matter of top security for the American Government to secure the flow of Persian Gulf oil to USA. A detailed book on American foreign policy and the USA dependency on oil is by Michael Klare. The 265 page book is called "Blood and Oil" Penguin Books, 2004.
The point I am making here is that oil is major component of both national security and national economic development. Any one who pours cold water on the importance of oil is an enemy within, trying to create a pass for the enemies of Ugandans.
Countries like South Korea have developed partly because; they never tolerated diversionary optimists to frustrate national economic objectives. For example Korea minister of Information and Communications was sacked for expressing pessimistic views about Government push for a communication deal. (See Alice H. Amsden, "The Rise of the Rest" Oxford University Press, 2004 page 277).
So, then, why should the discovery of oil in Uganda be regarded as a curse? And why should educated people, too believe so? The answer is to be found in the colonial and neo-colonial dehumanization, which produced robot white men in black skins. In high school, Africans were taught: "we are poor because we are poor.
That since we did not save, we could not invest, and therefore the circle of poverty continued". Colonialism made an African man became synonymous with poverty. Gold mines found in Southern Africa had to be given to British. Prime land was taken a way and given to settlers.
Kenyan Africans for example were forbidden from growing coffee, on grounds that if an African owned coffee, he would use it as an excuse to steal coffee from the white settler farmer. Unfortunately over time, the African developed a culture of self-denial, which is typical of a traumatized people. A good bunch of banana was preserved for sale, so was the fat chickens, and the good bull. Ugandans build nice mansions for rent while they stay in poor locations. The advocates of doom who claim that the discovery of oil is a curse belong to the class of colonized mind.
Let us separate the two: political mismanagement of national economic affairs and the desire by some African Presidents to hold on power on one hand and the national resources on the other hand.
There are African dictators who held on power for more than 30 years, when their countries did not have oil. Some 30 years ago, Libya had the same oil resources like one of the Arab countries. But now Libya is a modern state while the other Arab state is still very much the way it was 30 years ago.
I also take solace because President Museveni is not the type of Presidents who would take advantage of oil. Corrupt Presidents, their families and their ministers, became stinking wealthy with or without oil. The President's children get the monopolies to import all petroleum products, sugar, cement, vehicles etc.
In Nigeria for example although the country has four refineries, crude oil is shipped to Brazil for refinery because they are some army generals who have interests in that business. After that, the daughter of the President is the only one who has the monopoly of re-importing the refined fuels back to Nigeria.
Discovery of oil will certainly be a curse to the IMF and the World Bank, the two Global Financial policing institutions whose main job is to keep countries like Uganda in permanent financial bondage. For example when South Korea wanted to invest in it's first state of art modern petrochemical installation and an equally ultramodern steel mill, (POSCO) the World Bank not only refused to finance the two projects, but also claimed that there was no enough local demand to justify the petrochemical plant and that since the world steel market was suffering from excess capacity, there was therefore no need for Korea to invest in ulter modern steel mill. (Alice H. Amsden, 2004, page 218-219).
Fortunately, Korea ignored the World Bank and self financed the two projects. Now POSCO is the best and most efficient steel mill in the whole world. I want to rest my case by emphatically stating that the discovery of oil will be a curse for the IMF and World Bank and all those who benefit from Uganda's economic backwardness.
The author is the Director, Economic Affairs & Monitoring, Office of the President.
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