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Ironduke
03 Feb 11,, 03:37
I'm posting this here, as it seems primarily to affect nations in the Middle East and Africa (but also Latin America).

I'd like to explore the theory of the resource curse, also known as the paradox of plenty on international development. Basically, the theory holds that in a developing economy, it is actually high damaging on an economy to be highly dependent on a limited number of high-value natural commodities: e.g. diamonds, oil, uranium, etc.

The United Arab Emirates is one country that I've identified that has more or less correctly develop a strategy to deal with the resource curse, by expanding their economy to include tourism, finance, and some industrial endeavors. Saudi Arabia and Nigeria would be examples of countries that have unsuccessfully dealt with issues related to overreliance on a natural commodity for economic well-being.

So, open discussion, with few questions:
what countries are suffering from the resource curse?
what would be effective ways within practical means to deal with this issue?
what countries have developed appropriate strategies to deal with this issue?
what could these countries do more effectively do deal with the issue in a better way?

From Wikipedia:

The resource curse (also known as the paradox of plenty) refers to the paradox that countries and regions with an abundance of natural resources, specifically point-source non-renewable resources like minerals and fuels, tend to have less economic growth and worse development outcomes than countries with fewer natural resources. This is hypothesized to happen for many different reasons, including a decline in the competitiveness of other economic sectors (caused by appreciation of the real exchange rate as resource revenues enter an economy), volatility of revenues from the natural resource sector due to exposure to global commodity market swings, government mismanagement of resources, or weak, ineffectual, unstable or corrupt institutions (possibly due to the easily diverted actual or anticipated revenue stream from extractive activities).
Source: Wikipedia
Resource curse - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Resource_curse)

Ironduke
03 Feb 11,, 03:42
These are the nations I've identified as pursuing a more correct approach to the issue:
Iran
United Arab Emirates
Incorrect approaches to the issue:
Nigeria (oil)
Iraq (oil, but exception case due to ongoing security matters, cyclical approach due to misfortunes of war)
Saudi Arabia (oil)
Colombia/Bolivia (agricultural commodities (licit and illicit)
Of course, we can see that several countries have altogether avoided the issue of few/no natural resources, but often solved their issues with imperialism, but were better of economically without their empires:
Europe (ruled most of the rest of the world until 1940s-1960s)
Japan (thrived as an empire, but better growth as an island nation with few natural resources)
Germany (again, once an empire, but superior growth as a nation with few natural resources)

Shek
03 Feb 11,, 14:58
For a policy-maker level treatment of the topic, the follow book is a great starting point, http://www.worldaffairsboard.com/staff-college/43518-bottom-billion.html.

Mihais
03 Feb 11,, 20:37
These are the nations I've identified as pursuing a more correct approach to the issue:
Iran
United Arab Emirates
Incorrect approaches to the issue:
Nigeria (oil)
Iraq (oil, but exception case due to ongoing security matters, cyclical approach due to misfortunes of war)
Saudi Arabia (oil)
Colombia/Bolivia (agricultural commodities (licit and illicit)
Of course, we can see that several countries have altogether avoided the issue of few/no natural resources, but often solved their issues with imperialism, but were better of economically without their empires:
Europe (ruled most of the rest of the world until 1940s-1960s)
Japan (thrived as an empire, but better growth as an island nation with few natural resources)
Germany (again, once an empire, but superior growth as a nation with few natural resources)

Not my strong point,but I was always underwhelmed by the argument that Europe got better because they dumped their colonies.First,the resources needed to run an industrial nation came mainly from the former colonies.Second,the formal control was replaced by proxy control,soft power sometimes backed by the threat of intervention.Third the control over the choke points in international trade were never outside Western control.The nation being in control changed,but due to the Cold War there was no practical difference.
The only thing that got worse was the administration in the former colonies in Africa.


WRT to the thread Russia is an interesting case.It seems willing to join the ''correct'' club,but still not being able to do so.

Ironduke
04 Feb 11,, 07:25
For a policy-maker level treatment of the topic, the follow book is a great starting point, http://www.worldaffairsboard.com/staff-college/43518-bottom-billion.html.
I've familiar with that work from my studies a senior level course on International Development. We read excerpts from the book as required reading. Overall, I'd have to say the class opened my eyes in a very big way.

Ironduke
04 Feb 11,, 07:29
Not my strong point,but I was always underwhelmed by the argument that Europe got better because they dumped their colonies.First,the resources needed to run an industrial nation came mainly from the former colonies.Second,the formal control was replaced by proxy control,soft power sometimes backed by the threat of intervention.Third the control over the choke points in international trade were never outside Western control.The nation being in control changed,but due to the Cold War there was no practical difference.
The only thing that got worse was the administration in the former colonies in Africa.


WRT to the thread Russia is an interesting case.It seems willing to join the ''correct'' club,but still not being able to do so.
Well, the argument then shifts. What you're saying is that the European empires still exist as neo-empires, but it they've banded together and cooperative efforts in neo-imperialism.

This may be the case in the immediate post-war era, but there are new major players entering the "neo-imperial" scene (I use these terms for the sake of argument): Brazil, China, India, with the addition of Russia right back in the Great Game with the US and Europe, superseding the Great Game played first by the British Empire and the Russian Empire, then NATO and the Warsaw Pact, now being played by the US/EU and Russia.

Mihais
04 Feb 11,, 22:00
It shifts somewhat,but it's not a complete rebuttal.IMO,the paradox of plenty explains in part why some fail to advance.But,at least for the post-war period the continuation of the old world system is,IMO,the cause for both the development and the impoverishment.The Asian nations that prospered after the war did so by embracing the old world order.About the entrance of the new players,it does change the game,without doubt.I don't know,however if it changes the rules.Immanuel Wallerstein,the creator of the world system theory seems to think it will even change the rules.

Where I find the PoP theory to be particularly useful is in anthropology.Particularly in observing how resource rich African societies evolved compared with less fortunate European ones(I'm talking about pre-history).

Ironduke
05 Feb 11,, 02:07
Where I find the PoP theory to be particularly useful is in anthropology.Particularly in observing how resource rich African societies evolved compared with less fortunate European ones(I'm talking about pre-history).
Well, there's the saying: "necessity is the mother of invention".

I'd encourage you to read Jared Diamond's book, "Guns, Germs, and Steel". Very original thought into the rise and fall of civilizations.
Amazon.com: Guns, Germs, and Steel: The Fates of Human Societies (9780393061314): Jared Diamond: Books (http://www.amazon.com/Guns-Germs-Steel-Fates-Societies/dp/0393061310/ref=sr_1_1?ie=UTF8&qid=1296871188&sr=8-1)

Europe has alot of things in favor of a highly developed civilization developing there. It's a highly divided landscape - mountains, peninsulas, forests, gulfs, channels. This encourages the formation of smaller political units over empires. As we know, medieval Europe was divided into thousands of small political entities that were only under the nominal rule of kings and the Pope to begin with. Chaos - encourages conflict and competition.

Broad, open landscapes encourage the formation of empires - China, India, SW Asia - there are much fewer obstacles geographically to conquest. When large political units are established, they most often grow through the spoils of conquest, then stagnate and decline (Romans, Arab Empire, Ottomans, Mughal, Chinese).

Europe is naturally a highly competitive environment. The practice of war took its highest form there, and though the Europeans were relatively less socially and culturally advanced in medieval times, they were an unstoppable force when they were able to organize a common front and put aside their divisions (for example, the Crusades).

This geographic environment also allowed a greater degree of freedom to develop, as political division and chaos makes rulers unable to enforce their will to the degree seen elsewhere (ancient Egypt, China, etc.)

Europe is also highly conducive to agriculture and is relatively free of infectious diseases such as malaria and other diseases that are found in the tropics. One can grow wheat, potatoes, rye, a large variety of livestock.

The European continent was mostly an untamed wilderness until the time of the late medieval period/Renaissance - one of the last areas of the Old World (with the exception of northern Eurasia) to be touched by high civilization. But once it arrived, through the Greeks and Romans, then cycled back by the Arabs, Turks, and Chinese, the momentum was unstoppable.

Europeans are not superior in any way, I believe that they were highly favored by geography.

Bigfella
05 Feb 11,, 22:58
Well, there's the saying: "necessity is the mother of invention".

I'd encourage you to read Jared Diamond's book, "Guns, Germs, and Steel". Very original thought into the rise and fall of civilizations.
Amazon.com: Guns, Germs, and Steel: The Fates of Human Societies (9780393061314): Jared Diamond: Books (http://www.amazon.com/Guns-Germs-Steel-Fates-Societies/dp/0393061310/ref=sr_1_1?ie=UTF8&qid=1296871188&sr=8-1)

Europe has alot of things in favor of a highly developed civilization developing there. It's a highly divided landscape - mountains, peninsulas, forests, gulfs, channels. This encourages the formation of smaller political units over empires. As we know, medieval Europe was divided into thousands of small political entities that were only under the nominal rule of kings and the Pope to begin with. Chaos - encourages conflict and competition.

Broad, open landscapes encourage the formation of empires - China, India, SW Asia - there are much fewer obstacles geographically to conquest. When large political units are established, they most often grow through the spoils of conquest, then stagnate and decline (Romans, Arab Empire, Ottomans, Mughal, Chinese).

Europe is naturally a highly competitive environment. The practice of war took its highest form there, and though the Europeans were relatively less socially and culturally advanced in medieval times, they were an unstoppable force when they were able to organize a common front and put aside their divisions (for example, the Crusades).

This geographic environment also allowed a greater degree of freedom to develop, as political division and chaos makes rulers unable to enforce their will to the degree seen elsewhere (ancient Egypt, China, etc.)

Europe is also highly conducive to agriculture and is relatively free of infectious diseases such as malaria and other diseases that are found in the tropics. One can grow wheat, potatoes, rye, a large variety of livestock.

The European continent was mostly an untamed wilderness until the time of the late medieval period/Renaissance - one of the last areas of the Old World (with the exception of northern Eurasia) to be touched by high civilization. But once it arrived, through the Greeks and Romans, then cycled back by the Arabs, Turks, and Chinese, the momentum was unstoppable.

Europeans are not superior in any way, I believe that they were highly favored by geography.

Certainly Europe didn't have to deal with chronic animal-borne diseases like malaria & dengue, but it did have its share of lethal (often human to human transmissible) diseases. Indeed, this proved to be of great benefit in colonizing New World societies such as the Americas & Australia. Those societies were far more free of disease & paid a terrible price.