Natural Resource Curse

Introduction

Oil, natural gas, and hard rock minerals are the major natural resources that ought to generate enormous amounts of cash to governments. Gold, diamond, and gemstones are examples of highly valued minerals that generate millions of dollars to the governments that possess the minerals (Ross 17). However, research indicates that the natural resources that ought to bring wealth to the nations are the core causes of civil wars in some African nations.

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The presence of valuable natural resources in a given location triggers conflicts amongst the residents of the region. Interestingly, the money earned from natural resources is used to finance the conflicts and prolong them. Essentially, the natural resources cause conflicts, civil wars, and ill feelings towards one another instead of bringing blessings of wealth. The worst scenarios in the “natural resource curse” are the massive number of deaths that occur during the minor conflicts, intermediate conflicts, and during the civil wars. Africa has the most worrisome conflict treads in the entire world. While armed conflicts reduced in other parts of the world between 1992 and 2001, African countries continued having cases of severe armed conflicts. Countries that lack the natural resources are doing better economically than those that possess the highly valued natural resources (Ross 20). Therefore, the whole scenario is worth being called a “natural resource curse.”

Why some countries avoid the “natural resource curse.”

From the descriptions of the “natural resource curse,” it is evident that most nations would not want to be culprits of the curse. No country would want to lose its valued people because of avoidable battles. Essentially, some countries outside Africa suffered from violent conflicts during the 1990s, and they learned their lessons the hard way. The developed countries have improvised policies that ensure that there is an equal distribution of the wealth generated from the natural resources.

Developed countries avoid the “natural resource curse” to lead by example. The resource wealth that would lead to some conflicting interests amongst people is redirected into financing education and healthcare programs, among other public services. In most developed countries, monies generated from natural resources are used to finance poverty reduction programs. With that approach, the governments of the developed nations ensure that their countries are self-sufficient, and they ensure that all their citizens can afford some affluent lifestyles.

Another interesting reason as to why the developed nations avoid the “natural resource curse” is the desire to protect their manufacturing firms. The industrialized states have set very high trade tariffs on processed goods (Ross 22). The developed nations do not want to experience the conflicts that may arise because of the varying costs of imported and internally processed goods. With the high tariffs on processed goods, the trade partners would prefer to deal with raw materials instead of processed goods. Essentially, the countries that avoid the “natural resource curse” do it to their advantage. They try to combat all possible threats that would raise conflicts amongst their citizens, as the conflicts would cause more harm than good.

The developed nations avoid the “natural resources curse” to smoothen their revenue flows. They invest in economic researches that enable them to predict potential threats to the global economy. Such countries would make long-term contracts with trade partners to insurer their manufacturing companies from supply-side shocks (Ross 24). The approaches employed by industrialized nations protect the citizens from experiencing the “natural resource curse.” It is evident that industrialized nations value their citizens, and they avoid the curse to offer their citizens with the best living conditions.

Why some countries do not avoid the “natural resource curse.”

While the affected countries would not desire to be culprits, they do not avoid the curse because of egotism. Oil, minerals, and timber are highly valued natural resources that earn nations large amounts of income. The governments that are only able to make an effective track of limited amounts of money have difficulties in managing the large volumes of money generated from natural resources. At that point, the cunning government officials take advantage of the overwhelming budgeting role to enrich their families while the entire nation suffers. After an audit, most resource-rich African nations report having lost billions of dollars mysteriously. Such incidences lead to fiscal discrepancies that have adverse consequences to the economy of such nations. The few eloquent individuals who can avoid the “natural resource curse” do not do it, as they are greedy and selfish. Corruption governs the nation as any person who tries to raise the eyebrows of the citizens is bribed to suppress the matter.

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Most countries in which the conflicts occur have very poor residents who over depend on the natural resources (Ross 24). The poor residents work as manual laborers to earn their living. They struggle to have a share of the few resources that are allocated to them. In such a case, minor conflicts would heighten in a matter of seconds, and civil wars would break out amongst the poor laborers. Once the war breaks, it is difficult to resolve, as one group of people would blame the other for their misfortunes in life.

The continued civil wars play a significant role in bringing down the economy of such nations. Congo is an example of an African country that recorded an enormous negative economic growth in the three years that it was involved in a civil war. In 1996, the Democratic Republic of Congo had a Gross Domestic Product (GDP) growth of -1.94%, but the civil war worsened the economy, and by 1998, its average GDP was -5.56% (Ross 20). The civil war resulted from the conflicts that residents had on the copper, diamond, gold, and oil mines. While the figures are devastating, there are those affluent government representatives who do not want to avoid the curse, as it is the only pathways for them generating massive incomes.

It is worth noting that most of the African nations that are culprits of the “natural resource curse” have underexploited their natural resources. The governments of such nations only focus on the already exploited resources without caring to expand the exploitation of other natural resources or diversifying into other production sectors. If a country relies on oil and mineral exports, it is evident that such a county is susceptible to economic shocks. As evident from studies, shocks on the revenue side of the economy endorse corruption.

The weakened governments of resource-rich African countries take the blame of exposing their nations to economic shocks. The corrupt government heads would take advantage of the revenue shocks to manipulate the figures in the budget. The sufferer in such a case is the poor citizen who lives in immense poverty. Conflicts that may arise between members in the poor society would not affect the few wealthy people who live in well-protected affluent suburbs. Essentially, the gluttonous government officials do not avoid the “natural resource curse” as it provides them with a loophole to steal from the government.

Research indicates that the governments of resource-rich countries employ wrong policies that do not achieve equal distribution of the wealth obtained from the natural resources. The governments of such nations do not invest adequate resources in the provision of education and healthcare resources (Ross 20). The unhealthy and uneducated children end up following the footpaths of their parents who rely on the natural resources for their living. The lifestyle pattern repeats itself in the subsequent generation, and the trend goes on. The poverty levels increase as the resources become inadequate to provide enough for the increasing population. With that in mind, it is evident that a hungry man is an angry man who can raise conflicts at any time. A state with poor governance is vulnerable to violent conflicts amongst those individuals who do not obtain a share of the national cake. Such conditions open the doors for criminal gangs and warlords who weaken the bureaucracy of the state. Therefore, as much as the affected individuals would want to avoid the “natural resource curse,” they do not avoid it because it is beyond their control.

Resource-rich countries earn massive income that the government ought to employ into some worthwhile developmental projects. However, due to poor governance, the resources are misused or misallocated. Top government officials and some few influential characters grab a large share of the resource wealth at the expense of the other insignificant individuals. The governments of such nations fail to account for the misappropriation of resources, and the naïve citizens have minimal powers to challenge the government (Ross 25). Essentially, bad governance leads to harsh economic conditions. The idle individuals who cannot secure a job may rise to protest against the government. Poverty, high unemployment levels, high mortality rates, and civil wars dominate in resource-rich countries that ought to be wealthy. The affected individuals do not avoid the “natural resource curses” because those who ought to avoid them do not care.

Conclusion

From the discussions in the paper, it is evident that African nationalities will continue suffering from the “natural resource curse” if the international community does not mediate. The international community should promote transparency, trade linearization, preventive diplomacy, rebel financing, and emphasize on diversification of economic activities in the African nations (Ross 30). By so doing, the African countries will diversify economically, and they will begin producing diversified export products. The international community can provide some financial and technological help to develop downstream enterprises that would add value to export products and provide employment opportunities to low-income laborers. From the discussions, it is evident that developed countries have harsh trade tariff barriers on processed goods to shy away from the intermediaries. These approaches molest the underdeveloped countries, and the international community should recommend the removal of the trade barriers on processed goods. Lastly, the African countries that are affected by the “natural resource curse” ought to take responsibility for their actions. It would not be fair for a few individuals to decline to avoid the curse at the expense of the entire nation. Like the developed nations, African nations should try to avoid the curse by employing strategies that are similar to those employed by developed nations.

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Work Cited

Ross, Michael, “The Natural Resource Curse: How Wealth Can Make you Poor.” Natural Resources and Violent Conflict: Options and Actions. Ed. Ian Bannon and Paul Collier. Washington, D.C.: World Bank, 2003. 17-42. Print.

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