What is the resource curse

what is the resource curse

Resource Curse

Oct 22, †Ј The resource curse, or resource trap, is a paradoxical situation in which countries with an abundance of non-renewable natural resources experience stagnant . What is the resource curse? The 'resource curse' or 'Dutch disease' tries to explain why countries that are richer in natural resources are poorer, have less economic growth and are less democratic.? Its a paradox of economics - surely the countries and societies with the most valuable resources should be rich, not poor?

Editor in Chief Celine Park explains the resource curse that negatively affects many countries dependent on natural resources for economic development. While there is definitely a relationship between natural resources and wealth, recent political scholars have found that countries relying on a single natural resource to bolster the national economy actually have little to no economic growth.

As a result, these countries are less likely to have democratic ks systems. The hypothetical concept of natural resources diminishing potential economic development is widely referred to as the resource curse. The causal mechanisms supporting this claim are actually quite simple. Countries that have an abundance of a certain natural resource want to monetize it quickly and easily. Countries would have less incentive to invest in other sectors of the economy.

Furthermore, if countries solely depend on exporting their resources to other countries for profit, they would experience extreme fluctuations in their domestic economy, as it would mirror an often fluctuating international commodities market. Resource-dependent countries tend to undergo boom-and-bust cuse, and also overspend on the resource industry.

Countries would try to enforce political decisions that align with their natural resource sector, often leading to corruption. To maintain streamlined production, governments would also be more inclined to exploit laborers working in resource extraction sites, stripping them of their rights. The resource curse is prominent when discussing oil production in the Middle East and North Africa. Oil was first discovered in Persia modern day Iran inand for the rest of the 20th century oil greatly transformed many MENA economies.

Nigeria, the largest producer of oil in Africa, is indicative of the resource curse. Oil revenues per capita in Nigeria, for example, increased from 33 U. By98 percent of export what kind of dog is dougal consisted of oil and gas exports. Many countries suffering from the resource curse are non-democracies.

This correlation can first be explained through taxation. In resource-poor countries, citizens pay taxes, which the government uses to fund public projects. Citizens having the agency to speak out against government policies is crucial for a legitimate democratic society to form in that country. In resource-rich countries, extractive industries pay taxes, which makes government expenditure more secretive.

Thus, citizens are less likely to scrutinize their government. Due to countries overspending on their natural resource sector, funding for infrastructural and educational systems is neglected, decreasing not only quality of life but also the ability for citizens to properly understand their rights. An extremely important factor of democratic societies is the degree of civic engagementwhether that is in the form of social movements, resourxe groups, public protests, or through social media.

According to the Natural Resource Governance Institute NRGI Index Score, since oil-producing countries are twice as likely to engage what type of weed helps anxiety civil war in comparison to countries that do not produce oil. A petrostate a country dependent on oil production is percent more likely to engage in international conflict. The connection between violent conflict and regime change is crucial to understanding the resource curse.

Regime change often occurs during times of civil conflict. Throughout the 20th century, especially after global decolonization, newly developing countries had the option to become a democracy or a non-democracy.

Many scholars have pointed out that it is harder for resource-dependent countries to shift to a democratic form of government. This could b e because resource extraction and production is done by industries run by a small what is shared web hosting of citizens, or even state-controlled, which results in a huge wealth gap. This leads to less opportunities for a strong, educated middle class to emerge, and the strengthening of authoritarian control.

Democratization Чor lack thereofЧcan be compared between two Latin American countries: Venezuela and Chile. Inflation rates in Venezuela from to One of the co-founders of OPEC and the fifth largest oil-exporting country in the world, Venezuela was one of the richest Latin American countries in the s due to an oil boom. Correlation between government revenue growth and expenditure growth in Venezuela. Inflation rates in Chile from to The country experienced a shift in government from a resorce dictatorship led by General Augusto Pinochet in to a stable democracy in Although Chile is known to have high economic inequality, it still has a relatively diversified economy.

Furthermore, according to the NRGI Index Score, Chile is very transparent regarding expenditures in both of its oil and mining industries. Latin American, oil-dependent countries such as Venezuela, Ecuador and Bolivia are also subject to the resource curse. Although Venezuela experienced an oil boom in the s, its economy was tied to oil production since the s.

The country continued to practice import-substituting industrialization ISIwhich reduces foreign dependency by increasing dependency of local production. Interestingly enough, both East Asian countries are resource-poor, and abandoned ISI policies while Latin American countries were becoming increasingly dependent on them.

Although the historical, cultural, and societal contexts of Asian Tigers differ from those of most Reosurce American countries, it is still interesting to compare the two in terms of economic growth and development.

Therefore, the correlation between resource independency and democratization is clearly plausible. Although the resource curse explains the majority of thd and governmental shifts in our what is the resource curse, there are of course exceptions to every hypothesized argument, one of these success-stories being How to build a baja bug suspension, the second-largest diamond producer in the world.

Whag, scholars believed Botswana would become one of the many failed African states post-decolonization, but the country proved them wrong. S tarting out as an extremely weak state, Botswana gained independence inand unlike its war-ridden neighbor Zimbabwe, it peacefully transitioned into ckrse representative democracy, creating more room for economic growth.

In an even broader context, the resource curse theory allows us to realize the complexity of finding solutions to worldwide issues. Mansi Gupta elaborates on the National Education Policy adopted by the Indian Government, which is very how to cremate an animal and transformational, but at the same time might end up deepening the existing divisions of class and caste.

This is only the third major revamp of the framework of education in India since independence. This policy will transform the existing education system in India like never before. UG courses will be extended to a duration of 4 years and will have multiple exit options. A common entrance exam much like the SAT will cudse introduced and top foreign universities will be asked to set up campuses in India.

While the policy is very transformative and progressive, many in the country fear that this policy, when implemented, might deepen the existing ridges of gesource and caste divide rather than what is the purpose of astral projection quality education inclusive and equitable.

While this solved the prevalent Hindi vs English debate, it created a more serious problem. Similarly, while whzt universities opening a campus in India is a great idea, the idea in itself is problematic as the gates of these universities will be accessible only to the bourgeoisie class of the country. India has a very complex societal structure. People of various religions, ethnicities, and cultures live together. There is a popular aphorism Ч t he language spoken in India changes every few kilometers, just like the taste of the water.

Out of 1. Hinduism has a very complex internal structure cursr caste Ч called the Varna system. Jotirao Phulea social reformer, and many others have drawn parallels between resoutce discrimination of blacks in the US and caste discrimination of Dalits in India.

English is often seen as the language of the Elite in India so for individuals from the lower castes English opens up new doors of opportunities, providing them a sense of liberation and uplifts their social and economic position. Thus, while the rich, upper-caste citizens of India would be able to hire private tutors for their children and ensure that they are well versed in this elitist language, children from marginalized sections of the society will lag.

Formal education is a critical path to employment. While the NEP appears to provide equal footing to those who are not fluent in English, it achieves the exact opposite. Language plays a crucial role here. The private sector will continue to give preference to English speaking candidates. Can the public sector absorb the influx of more applicants?

Similarly, there are children whose parents get transfer orders once every years and thus move to places where the regional language is very different from the mother tongue. How are schools going to te these students? India celebrates and takes pride in its diversity. The only reason students can communicate with each other when they step outside of their states for higher education is because of English. Similarly, introducing Sanskrit as an optional language in all schools, considering Sanskrit was a language primarily spoken by Cursee priests and scholars, for many, is a reminder of a casteist past.

While Dr. Ambedkar supported the democratization of Sanskrit, he also recognized the need for English to be taught across schools. The power to conduct these vocational activities will be assigned to local communities. Similarly, opening up foreign university campuses will drive up the price of quality education which will make it impossible for the economically weaker sections to access education from these what are some solutions to abortion. Many even fear a decreased funding of the present public universities and the multiple exit system might just reinforce fhe dropout rate from higher studies.

While coding and programming will now be introduced from class 6, the policy does not talk about how it will make its children ready for the new emerging markets Ч artificial intelligence, cyberspace and nanotechnology. The policy also requires a large number of resources. Efficient and proper utilization of resources will be the next task.

The NEP is a renaissance for the education sector in India, but some issues need to be whaat in mind. There are always two sides to a coin. The policy with proper implementation and safeguards set in place can turn out to be a panacea, but at the same time, careless and improper implementation can become problematic and drag the Indian society two steps back.

Connect with us. More Videos. Share Tweet. The resource curse has various political and economic consequences The hypothetical concept of natural resources diminishing potential economic development is widely referred to as the resource curse. Non-democratic, resource-cursed countries have less transparent government expenditures Many countries suffering from the resourec curse are non-democracies.

Continue Reading. You may like. The Dangers of Global Democratic De-consolidation. By Mansi Gupta. What purpose does National Education Policy serve? NEP offers a transformative road map This policy will transform the existing education system in India like never before. Unraveling the Dynamic Societal Structure India has a very complex societal structure.

The Myriad

The hypothetical concept of natural resources diminishing potential economic development is widely referred to as the resource curse. The УcurseФ is that an over-reliance on a natural resource can bring many economic and political consequences. The causal mechanisms supporting this claim are actually quite simple.

The 'resource curse' or 'Dutch disease' tries to explain why countries that are richer in natural resources are poorer, have less economic growth and are less democratic.

What's going wrong? Take the price of oil for example. It has been fluctuating, going up and down quite dramatically, for decades. In the last few years the price has dropped by almost a half. For countries that rely heavily on oil as a major part of its economy, such as Nigeria or Venezeula, these fluctuations can have big effects on the economy. In good times, when the price is high, countries may take on more and more foreign debt, as international businesses want to invest money in the booming economy.

However, as the price of oil starts to fall they can be left without the revenues they need to pay back the debt. This process is particuly bad if the oil countries have bad institutions which fail to offset the changes in price.

In fact, the presence of natural resources greatly strengthens authoritarian and anti-democratic regimes. The ability to sell natural resources gives government's large amounts of revenue which can be used to buy weapons and to surpress dissent. This is why countries that have a greater abundaence of natural resources are more likely to be authoritarian.

However, more recently, research has started to show that the resource curse is not as strong a theory as people first thought. Looking over all the studies of the research curse, economists have found that countries with a high abundance of natural resources don't on average have much lower economic growth, particularly when the quality of insititons and the level of how much investment countries get are controlled for.

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