Advantages And Disadvantages Of Resource Curse

Every nation has a responsibility to its citizens to improve the economic, political and social well-being of its people. However, in the film Blood Diamond it is made clear that there is an exploitation of the people in Sierra Leone. This economic problem is fueled by three main concepts; poverty, production/resources and demand/supply. Through the analysis of the three main concepts it will be shown how the economic problem was the result of each sub-concept.

An inequality in society, economy, wealth distribution, and political corruption and the influence in cooperation of government led to

Society has limited or scarce economic resources, meaning all natural, and manufactured resources that go into the production of goods and services. (McConnell, BRUE, & FLYNN, 2015, p. 11)

Finally, the most internal-facing explanation for the resource curse is the propensity of government institutions to become corrupt or careless and mismanage the oil wealth. This is easily understood in Jerry Useem’s “The Devil’s Excrement.” In the text, Useem uses Venezuela as a prime example of a country that has mismanaged its own resource wealth and as a result, ended up in poor economic condition. “Showered with sudden windfalls, governments start spending like rock stars, creating programs that are hard to undo when oil prices fall.” (Useem). As I touched upon in the cognitive explanation, the fast and unprecedented generation of oil wealth often excites these resource-rich countries to the point that they establish costly programs and facilities without considering sustainability. Then, once the oil price falls due to the fluctuating global market referenced above, the country has no way of maintaining these new programs and facilities that were previously

The term traces its roots back to World War II. The concept of deindustrialization began in Nazi Germany. The Nazis described the areas that they had invaded in conquered in this way. This is because they eliminated any industry from the areas that they took over, forcing these states to become dependent upon Germany for economic and industrial development. This philosophy was also used as a punishment for those countries, showing the power of Nazi Germany. After the end of the war, the Allies began to use the term “deindustrialization”, as well. Essentially taking the definition from the Nazis, they used this term in discussions of how to punish Nazi Germany in post-war rebuilding plans. Regardless of who was using the term in World War II, there was always a negative connotation attached to it. Rather than simply saying that it meant a decline in manufacturing jobs for an area, the term was used as a punishment and a show of power. In its origins, “deindustrialization” was used by the “winners” of a conflict to describe how they would take away industry from the “losing” nation or state. For this reason, it can be seen how the term developed a negative connotation. The term grew tremendously in usage around the 1970s, when factories began to downsize what would become known as the

Because they are deprived of law, order, and justice, corruption begins to take

For instance, most of the developments in the developed countries are based on growth, that is, they are depend on natural resources like minerals, gas and oil for their economic development. Moreover, the emerging developing countries such as India, china and brazil need a lot of natural resources to develop. This means that countries which are rich in resources in Latin America have emphasized and focused on the extraction of natural resources for their development and export. Neo extractivisim has been coined to refer to policies and regulations which strengthen states role in the ownership and exploitation of natural resources, a development which has gained great momentum inmost parts of the developing nations (Burchardt, Hans-Jürgen, and Kristina, 2014). Extractivisims is a development model that has political, natural and socioeconomic influences (class structure, interaction between public and state and gender) within a country majorly in countries with abundant resources in the

“Deindustrialization is a process of social and economic change caused by the removal or reduction of industrial capacity or activity in a country or region, especially heavy industry or manufacturing industry” (Wikipedia). Deindustrialization has been a major cause for the drastic drop in job growth for the last 40 years. From 1760 to about 1830, the industrial revolution in America paved way for the development of blue collar jobs. These jobs were sent to the new bigger cities where businesses were building factories in order to create mass production. Despite the poor working

Corruption can take many forms and can be found in many countries, but mainly in the emerging ones. The main form of corruption is the bribery in the form of payments demanded by the government or ministry officials in exchange for a favor (granting a service, awarding a business).Corruption affects all the businesses that interfere with the government, but studies have shown that certain industries are more exposed to it. These industries are construction, airline manufacturing, power plants, and oil and gas production.

One of those includes overpopulation, imagine living in the same house with 20 other people. There wouldn’t be much space to do anything, countries such as China and India have such an incredibly high population density that they don’t have the necessities to look after everyone. Overpopulation has a large impact to poverty, as it gives a rise to unemployment as there are fewer jobs to support such a large amount of people. This then results in a rise in crime as people are resorted to steal to simply feed for their family and the basic needs.

Countries that do not promote accountability and state competence to benefit from resource booms are at risk of the resource curse. The resource curse is when resource-rich countries benefit from its wealthy natural resources (i.e. oil) and do not help with its people welfare. Its government officials are less likely to meet the demands of its people because they are too busy pocketing the cash. These countries are more deceptable to authoritarianism, low levels of economic growth and stability. Wealthy natural resources can promote power conflicts and corrupt governments. Countries that have a resource curse are more likely to transition to democracy when its large revenue comes from citizens ' taxes.

Oil and other natural resources are an important source of wealth. States and their leaders are eager to get access to the highly-valued resources, perhaps gain control over them. However, lack of democracy in the oil-rich countries could be explained by the European colonization in the region,

growth. Corruption reduces the efficiencies of the operations of the market economy and a loss

Corruption is a complex political, social, and economic anomaly that negatively affects developing and developed countries. It weakens democratic institutions, holds economic development, widening the rich-poor gap and certainly leads to governmental instability. The World Bank definition of corruption states that “…the abuse of public office for private gain”.

The extensive roles of energy in economic growth are well known. Kaiser, Mark .J (2007) posits that there is a solid relationship between national economy and energy development, as energy supply, demand and pricing have enormous influence on economic growth. With the fast pace of economic development over the past decades, many developing nations experienced a sharp annual growth in petroleum demand. However, those with large or potentially large petroleum deposits, very sufficient and financial resources for supply investments, especially for the development of oil and gas production and exploration.