1 / 10

The Resource Curse

The Resource Curse. “Ten years from now, twenty years from now, you will see: oil will bring us ruin … Oil is the Devil’s excrement.” Juan Pablo Pérez Alfonzo, an OPEC founder. Themes of Crude World. Oil is becoming scarce Oil is a source of fabulous riches

thalia
Download Presentation

The Resource Curse

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The Resource Curse “Ten years from now, twenty years from now, you will see: oil will bring us ruin … Oil is the Devil’s excrement.” Juan Pablo Pérez Alfonzo, an OPEC founder

  2. Themes of Crude World • Oil is becoming scarce • Oil is a source of fabulous riches • Oil pushes people into corruption & violence • Oil impoverishes the masses • Oil undermines state & society • Oil destroys the environment • Oil triggers war • Oil drives empire • Oil is a curse, not a blessing

  3. This is the “resource curse” • “Paradox of plenty” states with point resources (oil, diamonds) perform poorly & are subject to violence • Large quantities of revenues make limited contribution to development • Widespread poverty is often present • External actors take an unhealthy interest in internal politics • There is often little to show

  4. Effects on the economy • Resource in high demand • Subject to price fluctuations • Revenues cause currency exchange rate to rise • Domestic inflation often takes hold • Non-productive activities become more profitable • Revenues are skimmed off and losing projects launched • Population often realizes little or not benefits

  5. Effects on politics & peace • Revenues diverted to families, friends • Corruption, bribery, etc. become commonplace • Competition for control of resources develops • Power struggles follow & can turn violent • Groups seek to assert control over resources • Revenues can fund internal warfare

  6. Effects on society • Elites with access to funds support their own interests • Public services are not offered & decay • People move to urban areas in search of work • People living over resource are dispossessed • Environmental damage undermines livelihoods • General insecurity becomes pervasive

  7. Case of Nigeria • Oil discovered in 1956; independence in 1960 • Broad religious & ethnic divisions across country • Oil resources are all in the South, mostly Delta • State control elsewhere • Local economy under-mined by revenues • $50-100 billion vanished • Delta communities have struggled & some groups (e.g., MEND) attack & kidnap oil workers, etc.

  8. Case of Chad • When oil discovered, same concerns arose • Pipeline contract required set-aside of revenues • These were for domestic development • Continued funding support contingent on agreement • Government could tap in “national emergency” • Which it proceeded to do

  9. Can the resource curse be avoided? • Rigorous & close monitoring • Transparency & accountability • Sterilization of foreign exchange • Restrictions on access • Limits on how much can be withdrawn • Equitable distribution of revenues & services

  10. More to the point, what role does the Global North play in all of this? • Primary demand for resources in the North • Demand & speculation drive up prices • Producers want to limit costs of extraction • ‘Externalities’ often imposed on locals • Companies deal with governments, not people • There is limited justice in all of this

More Related