The Resource Curse: A Catalysit for Bad Governance

In order for Chad’s economy to succeed in the future, major reforms on oil revenue transparency are necessary. As a result of social and political conflicts, Chad has historically been characterized by division and warfare. Since the discovery of oil during the 1960s, these conflicts have only been exacerbated. The oil pipeline that began construction in 1999 as a result of this discovery inadvertently fueled the tension that had been created. The revenues that were generated from the pipeline were not allocated with transparency, which caused dissent on a global scale. This project was supposed to be an example for all oil-dependent developing countries that agreement and control of revenues could help grow a country’s economy. Ultimately, the methods used to control the revenues in Chad have been inefficient, and are in need of further reforms such as improved national dialogue and access to information.

Throughout history positions of power and wealth have been plagued by corruption, does this power cause people to be corrupt? Or is the power and wealth earned through immoral and corrupt practices? In order to find these answers, one must define what they feel is corrupt, for most corruption is the act of being dishonest or immoral with the motive of personal gains of money or power. There are numerous accounts of politicians, military leaders, business owners, entrepreneurs, and millionaires, all earning or using their power and wealth in an immoral and corrupt manner. Whether money is used for personal gain, used to corrupt others, or the wealth was earned by corrupt ways, it seems that the accumulation of wealth is constantly accompanied by corruption.

Unfortunately, most African countries that are so rich in natural resources are countries that are forced into deep poverty, diseases and quarrels. The roots of these actions are actually grows from corruption. What African people need to start doing is changing the mentality of Africans and this can only be attempted through education and training within the home. Firstly, Africans need to focus on the younger generations and show them a good example of political behaviour. And they, in turn should be aware that wealth comes through hard work and being responsible, not by stealing public funds. Africans should start implementing courses about corruption and society in schools to educate people on the negative outside corruption that makes an impact on society. According to Pollock (2010), it is strongly needed to teach law legislators, who easily participate in corruption (para. 3). Secondly, the poor and miserable conditions in which most Africans are, is the next cause of the appearance of corruption. And most important action that should be taken in consideration is to fight with poverty. What is needed is a force to change mentality. Moreover, the belief that one can buy anything with money has enlarged corruption in all levels of life. The only way to destroy corruption is to do a massive campaign like they are doing in Kenya and that would take some time to produce results. There, in South Africa, exists such culture of an

Addressing the most important factor – lack of literacy – it can be noted that the education expenditures in Sierra Leone is 2.9% of GDP (2012)1. An increase in investment in the education system, and enforcement is the most effective way to increase literacy rates. In an interview with the International Monetary Fund, the question is posed: “Oil wealth is not always a blessing. In actual fact, countries like Nigeria have struggled in managing the resource effectively. How can the CEMAC countries avoid the pitfalls that other countries have fallen into? ” The simple answer given by Sharmini Coorey, Director of the IMF's Institute for Capacity Development replies; “Another important thing is investing in people. In the book, we focus on how to achieve inclusive growth and one of the most obvious and relatively easy ways of making inclusive growth is to spend your oil money on better health and education.17” In investing in the people, a country is investing in their future. Censorship isn’t generally accepted in Sierra Leone and so with the creation of privately owned newspaper, radio, and television companies, it allows the private owners to give people the unbiased, truthful and accurate news16. In the research done, my conclusion is that Sierra Leone has a good basis for media, however it is the literacy and monetary issues which hold

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,

First off is how resources fuel corruption an example of this is money. Money is gotten from resources and money can be used to buy thing for one owns gain and if someone of power has lots of money they can use that money for their own gain or there countries gain or whatever it is they are in control of.

Isn’t the invention of the cotton gin beautiful, almost a miracle that it could produce more cotton without as much work there was to be executed? This was true, until slave owners in the 1800’s decided to buy even more slaves to increase their profits more than ever before, much like how the industry of blood diamonds worked. Blood diamonds have erupted to the scene as a major problem in the African nation known as Sierra Leone, causing the major issue of government corruption. Ever science Siaka Stevens inflicted the type of government that would allow for such a resource to become a weapon, diamonds became the most sought out product in all of North-western Africa. The reason why blood diamonds have stuck around and isn’t just a quick boost in the economic flow of money is because it forms an evident and vicious cycle, along with the concept of blood diamonds spreading. Things such as law enforcement, poor leaders, and poor overall structure of government has made this the weak nation it is today. The way this country has resided in diamonds to quickly fix poverty has proven its unhealthy reliance on a resource, eventually causing a civil war. As blood diamonds become more prominent and vital to the African government, the diamonds have increased the spread and level of political corruptions, much like how the cotton gin had caused a vicious cycle of the need for slavery.

Imagine if you, living in the United States, lacked basic healthcare, and a basic education. Though this may sound absurd to many, it is a reality for most of Angolan citizens. Angola is an African nation located on the South-west coast of Africa. Angola is North of Namibia, West of Zambia, and South of the Democratic Republic of Congo. Angola’s government type is a unitary state. In a unitary government, the power is held by one central authority, but in a federal government, such as: the United States, Canada and Australia, the power is divided between national (federal) and local (state) governments. The president of Angola, Jose Dos Santos, has not focused on the healthcare or education of his country’s citizens throughout his 36 years in power. Dos Santos has lead Angola through a brutal civil war that ended in 2002. It does not take much work to make sure that money is going to where it is truly needed. Many say “It doesn’t take new discoveries to cure easily preventable illnesses such as malaria and malnutrition.”

Moreover, regarding corruption as an innate quality of human culture undermines the hope for any improvement and is inherently fatalistic, serving as an excuse for creating cultures of corruption” (source: iDebate.org)

The negative economic impacts of corruption have grown rapidly, and major international organizations have claimed that corruption hinders economic growth (world bank 2006). Although there are claims that corruption is harmful to economic growth, economists have not really agreed with the argument from a theoretical point of view. Theoretical studies suggest that corruption may counteract government failure and promote economic growth in the short run, given externally determined suboptimal bureaucratic rules and regulations. As government failure is itself a function of corruption, however, corruption should have

In 1994, Equatorial Guinea was one of the most impoverished countries in Africa. During that time, the country had an incredibly low life expectancy of just 46 years, and the inhabitants were forced to survive on only $1 a day. Then, in 1995, they discovered a natural resource that would have the potential to change their economic well-being and quality of life forever. In this year, Equatorial Guinea discovered an immense amount of oil right off the coast of the country. Just nine years after this finding, all major US oil companies, notably Exxon-Mobile, Marathon Oil, and Amerada Hess, were drilling for oil in this once poverty-stricken country. After this notable discovery, Equatorial Guinea was generating $4 billion in revenue per year solely from the oil drilling industry. However, the inexperienced leaders that governed the country entered into a contract where they agreed to give 80%

Today, China attempts to lawfully purloin African resources with an extremely self-promotional strategy. The country aims to maintain access to Africa’s sought after natural resources, regardless of the detrimental consequences for Africa. Some argue that the increase in exporting that China creates will help Africa’s economy develop, however these specific resources can hurt the economy long term. This is seen in examples such as Nigeria and Angola, Sub-Saharan Africa’s two largest oil exporters. Oil and mining are not labor intensive industries, therefore while these natural deposits may create impressive growth figures, they do not translate into widespread job creation. In fact, an economy solely based upon large oil and mineral reserves distorts the local currency. The prices of other exports then increase and it makes them hard to sell overseas, a phenomenon labeled the “Dutch disease.” Without careful management, something China has not provided, the oil and mineral revenue will

Most children in the Niger delta have little or no education, due to lack of funds from their parents who have lost their lands and have no jobs because of limited opportunities. The Niger delta government and the oil companies have refused to look into the situation; instead they favor their close relations neglecting the masses. Corruption in the Niger delta has led some youths in taking drastic measure in order to put food on their table. For example, Ikechukwu Efe an indigene of the Niger delta said that some of his friends created their own “oil refinery”, which is made up of crude oil in metal barrels with controlled heat from fire woods. This is a dangerous process in refining crude oil but the degree of poverty in the state left his friends with no choice. If only the government of the Niger delta have created jobs with the wealth of the state Ikechukwu’s friend would not have to put their lives in danger. Until corruption is put to an abrupt the people of the Niger delta will continue to live in poverty.

Despite Chad’s affluence from oil, its population remains impoverished. Notwithstanding these evident issues, the World Bank did not act to remedy the situation (Wysham, 2013). The United Nations and the European Union had planned many missions of intervention to improve the humanitarian crisis and to placate the war in Chad. However, these institutions have never truly focused on plans to increase the level of transparency of oil revenues in the country. The only move in Chad that can be construed as an improvement in transparency was the joining of the Extractive Transparency Initiative. While in 2010 Chad failed 12 out of 20 requirements and in 2013 was nominated “not compliant”, Chad re-joined the initiative again in 2014 and was finally declared compliant to their standard of transparency of oil revenues in 2015 (Transparency International, 2014). Though results from 2016 are still missing, this initiative has proved in numerous countries, including the United States, that their requirements for compliance are not sufficient for true oil revenue transparency (Vandeveer, 2016).

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”.