Country Report Uganda March 2010

Outlook for 2010-11: International relations

Relations with neighbouring countries could worsen over the forecast period, as the discovery of valuable natural resources in disputed border areas is increasing political tensions. Sporadic tensions could occur with neighbouring Kenya, such as the dispute over the ownership of Migingo Island in Lake Victoria in 2009. However, growing interdependence-an East African Community (EAC) common market is scheduled to come into operation in mid-2010-should reduce the likelihood of animosity leading to outright diplo-matic disputes. Relations with the Democratic Republic of Congo (DRC) have warmed, and full diplomatic relations were restored in 2009. This relationship has the potential to deteriorate quickly, however, and is vulnerable to changes in the political mood in the DRC and disputes over oil resources in Lake Albert. Similarly, links with Sudan could worsen given the volatile political environ-ment there. Relations with donors will be uneasy owing to concerns over corruption, although it looks increasingly likely that a controversial anti-homo-sexuality bill will be watered down significantly owing to donor concerns, ensuring that they remain large contributors. Investment in Uganda's fledgling oil sector from French and Chinese companies will lead to a deepening of relations with the governments of these two countries, as they seek to build stronger political ties to protect the strategic interests of their companies.

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