* Museveni has defused crisis, for now
* Buganda kingdom votes in doubt in 2011
* Divide-and-rule tactics risk spreading unrest
By Daniel Wallis
NAIROBI, Sept 14 (Reuters) - A spasm of tribal violence in Uganda points to increasing turmoil ahead of a 2011 election, and shows President Yoweri Museveni’s determination to hold onto power in the region’s third biggest economy.
Uganda has been hailed for its stability and economic growth since the former rebel seized power in 1986, ending the nation’s darkest days under Idi Amin and Milton Obote.
But critics, including some Western donors, accuse Museveni of rights abuses, political repression of opponents and of turning a blind eye to high level corruption, and they denounce his authoritarian leadership style.
The latest bloodshed broke out just as investor interest is heating up following the discovery of a estimated 2 billion barrels of crude oil near the remote western border with Congo by explorers including London-listed Tullow Oil (TLW.L). Energy firms hoping to tap those reserves are keeping a close eye on the politics in Kampala ahead of the 2011 ballot.
"Companies here will be glad last week’s violence petered out fairly quickly. But anything that affects the capital ... and transport, roads being blocked, even if briefly, obviously raises a degree of alarm," one Western diplomat told Reuters.
A long-simmering row over land and power between Museveni’s government and Buganda, one of the east African country’s four historical kingdoms, finally boiled over last week.
Police barred the Buganda monarch, known as the Kabaka, from visiting a flashpoint town east of the capital on territory claimed by his kingdom. That, and rumours of arrests of Buganda leaders, triggered riots in Kampala and several central towns.
At least 15 people died and hundreds were arrested.
GANGS TOOK OVER
"We expect more of this to happen as we move the next election, because (Buganda) is being used as a tool for political mobilisation by the opposition at the moment," veteran independent analyst Levi Ochieng told Reuters from Kampala.
"The opposition lacks united leadership ... but (Buganda) is easy to use because it involves sentiment around the leadership of the monarch. It unites people around the Kabaka and it is one of the fault lines that Uganda’s opposition can easily exploit."
In a possible foretaste of what to expect ahead of the next vote, analysts said Museveni had used a combination of political might and political nous to defuse the Buganda clashes, for now.
Daniel Kalinaki, managing editor of Uganda’s independent Daily Monitor newspaper, said on Monday the government was caught flat-footed by the speed with which the protests spread.
But the president soon took action. The authorities took kingdom-owned CBS Radio off air, accusing it of inciting hatred, and Buganda lawmakers from the country’s central region were summoned to State House to meet Museveni.
That cut the link between the kingdom’s leaders and rank-and-file members on the streets who were meant to be a human shield for the Kabaka’s visit on Saturday, Kalinaki wrote.
"Without a coherent message from the centre, the rioting became localised and criminalised as gangs ... took to indiscriminate violence and looting, quickly turning many of the people who would otherwise support the visit into its victims."
In a move denounced by media rights groups, the government also shut down three other local radio stations and charged one popular talk show host with sedition and fanning the violence.
On Sunday, opposition legislator Issa Kikungwe was bundled out of a rural church service by plainclothes security agents. Police said he was being held in connection with the unrest.
Dealing with the Buganda leaders, who want autonomy over the 9,000 sq miles (23,300 sq km) of central Uganda that they see as their land, has always been a political tightrope for Museveni.
Buganda votes have helped to drive Museveni to victory at the last three elections -- but that support now looks in doubt.
Obote, Uganda’s former leader, abolished the four historical kingdoms in 1966. In the early 1990s, Museveni won plaudits nationwide for restoring the cultural and ceremonial powers of the traditional leaders, who are revered by their subjects.
But observers say legal relations between the kingdoms and the central Kampala administration were never clearly defined.
Uganda’s three smaller kingdoms comprise the eastern Busoga and two western kingdoms, Bunyoro and Toro -- which is ruled by the world’s youngest monarch, 17-year-old King Oyo.
Future ties between the government and Bunyoro are especially significant since Bunyoro covers most sites near Lake Albert where oil explorers have been drilling for crude.
Some observers see Bunyoro as a future epicentre of Uganda’s economic power, and note Museveni’s attempts to woo its leaders.
Analysts say the president’s efforts ahead of the next election to build tribal alliances and weaken rivals through divide-and-rule, whether in Buganda or Bunyoro, risk further alienating a growing underclass of angry, unemployed youth.
"They are ... citizens from all the corners of this fair country who are thoroughly disgusted by the excesses of the regime, the robbery of state wealth and the blatant and shameless schemes of the said regime to rule in perpetuity," said Ugandan political commentator Austin Ejiet.
Tribal identity could be used to divide the masses, the Daily Monitor’s Kalinaki said, "but nothing unites them more than poverty and a sense of disenfranchisement -- and that is one war that cannot be fought with bullets." (Editing by Giles Elgood)