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The Resource Curse?

The Resource Curse?
A strange correlation between natural resource-rich countries and human rights abuses has emerged over the past decade.

In 2001, Michael Ross discovered that the majority of states who are high oil-exporters also employ undemocratic policies.

An oil-rich state is classified by dividing total oil exports and by the total population of the country. To be considered a long-term oil-rich state, a country must produce over $100 per citizen for two-thirds of its sovereign years.

Ross found that oil-exporting states enjoy the “rentier effect”, which allows authoritarian regimes to use the revenue collected from oil sales to levy lower taxes. Consequently, the reduced taxes enable regimes to operate without accountability to its people.

The resource curse also has other negative consequences. According to Oil Change International, oil states employ a “repression effect”, which is the violation of human rights through the appropriation of land, forced migration and brutality on its citizens.

An example in which the resource caused human rights abuses in Nigeria. During the mid-1990s Ken Saro-Wiwa and eight other Ogoni leaders were executed for their roles in a successful campaign to remove Shell from the oil-rich Niger Delta.

Burma in the late 1990s also was a victim of the resource curse. The Burmese army and Unocal corporation were caught “clearing routes for the pipelines, including forced relocation, forced labor, rape, torture, and murder”. In 2005, Unocal offered conciliatory compensations to local villagers in lieu of a lawsuit engendered by Earthright International and the Center for Constitutional Rights.

Beyond authoritarian rule and the oppression of its people, the resource curse is linked to internal conflict. The Natural Resource Governance Institute (NRGI) found that over the past 26 years, oil-rich states have been twice as likely to experience civil war compared to their non-oil-rich counterparts, using the example of oil-rich states the Democratic Republic of the Congo, the Niger Delta, Iraq, Libya and Angola.

Similarly, the NRGI coined the term “petro-aggression” to define oil-rich states’ heightened likelihood to engage in an inter-state conflict such as Iraq’s invasion of Iran and Kuwait.

The resource curse also bears a direct relationship with the restriction of gender parity. Research has demonstrated that oil-rich states have fewer women in the workforce and government. Additionally, oil-rich states often have higher rates of HIV/AIDS, a consequence of the influx of male mine workers that travel from one oil-rich country to another.

An indirect consequence of the resource curse is the Dutch disease, which is the process of eliminating all non-oil industries. Consequently, states are dependent on a volatile market, undermining the stability of their economies.

The resource curse has incontrovertible and severe consequences. It is incumbent on democratic leaders to encourage good governance and strict adherence to the Universal Declaration of Human Rights. Additionally, democratic states must continue to encourage the diversification of oil economies through foreign assistance.

– Adam George

Photo: Flickr

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Poverty in Angola: Causes, Updates and Statistics

Poverty in Angola
Despite its economic success in the booming oil industry, poverty in Angola is a serious concern. The fact that a majority of Angolans live in extreme poverty contrasts greatly with the country’s booming economy. Angola is one of Africa’s most resource-rich countries. It is the second-largest oil producer in Africa and the fourth-largest producer of diamonds. In addition, the country is rich in such resources as minerals, lumber and fish. Although the oil industry in Angola brings in a majority of the state’s revenue, two-thirds of the population live on less than $2 a day and do not see the benefits of the industry.

The government claims that poverty rates have dropped in recent years, yet corruption is still a major factor. The question remains: “Where is this money?” Government elites and employees reap the benefits of the oil industry, while many Angolans live in arduous conditions. Additionally, the country possesses high infant mortality rates, poor access to clean water and sanitation and high illiteracy rates.

The civil war from 1975 to 2002 left Angola devastated, with countless deaths and millions of internally displaced persons. Angola can now boast a revived economic situation and an up-and-coming international profile. However, the country still has a great deal of work to do in its commitment to alleviate poverty in Angola.

The 2016 Human Development Index ranks Angola 149 out of 186 on the poverty scale, as poverty permeates the entire nation. Poverty in Angola is greater in rural areas, which contains 38.5 percent of the population. In fact, 94 percent of rural households are categorized as poor.

There is a very low electrification rate in rural areas of Angola, with only 6% of rural households having access to electricity. A considerable amount of the population (38 percent) does not have access to safe water sources. Consequently, the mortality rate for children under five is around 17 percent. In addition, many children do not have access to education, making future employment difficult. In fact, 34.6 percent of people have unequal access to education. As a result, 28.9 percent of the population have an unequal income.

The capital city of Luanda, one of the largest cities in Angola, drastically contrasts its outskirts. Just outside the city limits, hundreds of thousands of people live in extreme poverty.With no running water or proper infrastructure for sanitation, disease runs rampant. Diarrheal diseases, cholera, measles and diphtheria are just a few such illnesses.

According to the World Health Organization, there were over 2,000 cholera outbreaks in 2009. Yet, there was only 1 doctor available for every 10,000 people. As a result, countless families lack access to vaccines or clinics to treat these diseases.

In recent years, there have been successful reconstruction programs, including roads, airports, bridges, hospitals and schools. Although the Angolan government is beginning to make progress towards rebuilding, the answer for widespread poverty alleviation lies within the ruling party and channeling the revenue from the oil industry into the hands of Angolan’s themselves.

– Kimber Kraus

Photo: Flickr

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Guyana Oil Discovery to Help Nation’s Poor

Guyana Oil

Exxon Mobile’s recent Guyana oil discovery has given the historically poor nation reason to cheer. With oil the most important commodity in the global market, the South American country expects to make a large profit from the discovery.

Exxon Mobil found the oil on their sprawling 6.6 million acre oilfield off the coast of Stabroek, Guyana.

In the Stabroek block, the company’s Liza-1 well was drilled to more than 17,000 feet. There, the company found more than 295 feet of high-quality oil-bearing sandstone reservoirs.

The oil company is encouraged by the discovery and plans to determine the potential of the other sites.

With Liza-1 being the company’s first site of many, there is a good chance of further discoveries. Also, the findings from the well will be sent for analysis to determine its full commercial potential.

Even if no further discoveries are made, Guyana’s former Minister of Natural Resources and the Environment believes any discovery of oil will greatly boost the nation’s economy.

With Guyana having the 157th largest economy in the world, the recent discovery of the highly valued commodity promises to have transformational effects on the nation. Large revenues and foreign investments will pour into the country from its oil sales.

To ensure that the money will be used wisely, the President of Guyana, David Granger, promises to create a sovereign wealth fund from the Guyana oil revenue.

A sovereign wealth fund (SWF) is a pool of a nation’s money that is set aside for investments that will benefit the country’s economy and citizens. In this case, the revenue from Guyana oil sales will be put into a fund that will be reinvested in the country.

To assist in the creation of the SWF, Guyana is turning to their neighbor to the north, Canada. Researchers at the University of Calgary are putting together plans for the creation of the SWF.

Speaking on this, Guyana’s Minister of Governance, Raphael Trotman, said, “So later in the month of November, a team is coming from the University of Calgary with the specific responsibility of putting together the mechanism for what we refer to as the Sovereign Wealth Fund.”

The minister went on to reveal that the SWF will be split into three separate sub-funds.

One will look to secure funds the nation’s wealth for the future generations. The second will be a rainy-day fund for the nation’s budget in fiscally lean years. The third will be for developmental projects or initiatives.

Trotman expanded on this, saying, “So there are three funds that comprise the Sovereign Wealth Fund, but each has a different rate at which it is supplied and different reasons or mechanisms from which it can draw down.”

The three sub-funds ensure that the Guyana oil wealth will be used to benefit the nation as a whole. It includes investments into development and plans to save for the future.

The SWF is such a popular idea among the people that during the previous election both the current President and the opposition party had plans to create one.

Upon inauguration, President Granger promised that any funds from natural resources would benefit the people through an SWF.

He believes an SWF will make sure that “children will not have to live in poverty; that no matter what happens to the resources of the country, there will always be wealth to look after their education.”

The large oil revenues pouring into the SWF ensures that Guyana will have a strong investment in the nation and its citizens.

– Andrew Wildes

Sources: Guyana Times 1, Guyana Times 2, Investopedia, Quandl
Photo: Guyanese Online

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Plant Power and Peace in the Middle East

Plant_Power
With the advent of solar power, wind power and water power, most people would believe that scientists have used nature and all of its wonders to its greatest capacity, but there is one key aspect we have been missing: plant power.

For many years, scientists have been searching for an alternative source of energy and have had some luck on these ventures, but researchers at Cambridge University have now been able to harness the energy generated from photosynthesis to power cell phones.

As algae blooms, it absorbs a massive amount of sunlight, thus giving it a bright green color. In order to bloom and grow successfully, algae must utilize photosynthesis, as all other plants do. By converting sunlight into energy, these plants are able to grow bigger, but this energy may be able to be utilized to charge phones and other small electric devices.

Head of the Department of Plant Sciences at Cambridge University, Professor Sir David Baulcombe, stated that “algae offer considerable potential as a source of bioenergy. By studying the fundamentals of their metabolism and molecular biology and by understanding the fantastic natural variation in the different types of algae we can harness this potential for energy production.”

The Cambridge team’s discovery shows a lot of promise. This type of energy conversion is miles ahead of the photovoltaic cells most people are used to. These cells are biologically based, self-repairing, self-replicating, thoroughly biodegradable and thoroughly sustainable, creating an amazing entry into the world of truly green energy.

Recently, researchers at Cambridge have also been investigating the strength of regular plants. They have grown these plants in a vertical garden and utilizing the same concept of harnessing spare electrons from photosynthesis, have been able to power cell phones. However, these walls may take entire days to charge phones. After testing several plants, algae still remains the strongest and most productive source of energy.

At this point in time, most of the worlds’ energy comes from oil, and most of that oil comes from the Middle East. Many powerful nations, the United States being the most notorious of them all, have been intervening in Middle Eastern politics in order to ensure the safety of their precious oil supplies. For this reason, many wars have broken out, rulers have been overthrown and lives have been lost.

The invention of a source of green energy that comes directly from nature itself will drastically reduce dependence on oil as scientists are able to learn more and more about the true capability of nature. There are already solar-powered cars in the making, so maybe plant power is the next step. This would be a world out of the Lorax’s dreams, one where plants are abundant and well maintained.

By utilizing plants and their natural cycles as sources of energy, we create an even stronger dependency on them, thus causing people to plant more and more cautious in regards to nature. Of course, all of this is very far off in the future, but it will be very interesting to see how researchers decide to utilize nature and its power in the future.

– Sumita Tellakat

Sources: University of Cambridge, BBC
Photo: Flickr

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Poverty in Russia Has Reached a Breaking Point

Poverty_in_Russia
Poverty in Russia has been a prevailing issue for years now, but a host of causes has finally brought it to its worst point yet.

According to a recent report by Rosstat, a Russian state statistics service, the amount of people living below the poverty line in Russia hit 22.9 million earlier this year. Russia’s population was roughly 144 million at the end of 2014.

Russia’s poverty crisis has worsened steadily over the past few years due primarily to embargos and resulting inflation. As a result of Russia’s involvement in the Ukraine crisis, many countries embargoed food imports to Moscow. This caused inflation in the country to rise to 16.9%, its highest point in 13 years.

“Unfortunately, predictions are coming true: According to official statistics, the number of poor people has reached 22 million,” Deputy Prime Minister Olga Golodets told a Russian television station.

Additional Western sanctions have caused a steep decline in the price of oil, Russia’s largest export, further damaging the country’s economy and job market. In 2014, the amount of social service agency employees in Russia was cut by 6.5%. Experts are predicting that far more job cuts will follow, affecting 33 different regions of the country over the next few years.

Poverty in Russia is also proving to be immensely damaging to education. According to the Accounts Chamber report, 9,500 towns with populations between 300 and 1,500 had no preschool facilities, and one-third of these towns had no public transportation.

Between this year and 2018, 5.6% of Russia’s preschools are expected to close, as well as 6% of primary and secondary schools, 14.7% of orphanages and 16.1% of vocational schools.

As conditions in Russia continue to worsen, work must continue to be done to improve the quality of life within the country.

– Alexander Jones

Sources: World Socialist Web Site, International Business Times, Moscow Times
Photo: Business Insider

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Corruption in Angola Kills Children

corruption_in_angola

Currently, there are over six million child deaths every year. However, there are few countries on earth more deadly for children than Angola, a Southwestern African province with one-fifth of its children dying before the age of five.

Despite this figure, Angola is also home to one of the most flourishing oil and mining industries, with its highest paid business people earning salaries in the billion dollar range.

Anti-corruption evaluations of Angola’s oil businesses have stated, “The Angolan procurement system is corrupt as procurement laws are inadequately enforced. Foreign investors should note that they are often encouraged to partner with Angolan companies, many of which are front organizations for government officials whose integrity and accountability are frequently questioned by observers.”

Many of these “foreign investors” are U.S. companies, which provide large sums of money to help Angola’s oil economy grow. The oil industry in Angola receives a large proportion of its funding and contributing companies from the Western world, namely Peru and the U.S.

According to the International Business Times, “U.S. oil giants ExxonMobil and Chevron Corp., as well as the UK’s BP and Angolan Sonangol operate other offshore oil projects in the country while Peru’s PlusPetrol and private Angolan-owned Somoil operate two different onshore projects. The American firm Marathon Oil (NYSE: MRO), Italy’s Eni (NYSE: ENI) and Brazilian firm Petrobras (NYSE: PBR) each own various stakes in projects there as well.”

Since the oil and mining sector is a substantial source of the country’s income, corrupt government officials often design their policies around its preservation, even to the neglect of their own people.

Op-Ed Columnist Nicholas Kristof of the New York Times has devoted much time and energy to highlight this overlooked corruption. He has published several reports and documentaries of his findings and experiences in Angola, many of which contain shocking content that is difficult to watch.

Kristof revealed that the Angolan government has reduced its healthcare funding by 30 percent, despite the fact that over 50 percent of Angolans have zero access to any type of healthcare. Highly equipped hospitals and clinic facilities do exist, but the few doctors and nurses working there are uneducated and limited in their ability to assist those in need. Not only are these doctors and nurses uneducated, but they are often forced to sell their drug shipments on the black market in order to earn a decent profit.

Kristoff states, “A generation ago, the United States supported a brutal warlord, Jonas Savimbi, in Angola’s civil war. He lost. Now, because of oil interests, we have allied ourselves with the corrupt and autocratic winner, President José Eduardo dos Santos, in a way that also will also be remembered with embarrassment.”

– Hanna Darroll

Sources: International Business Times, UNICEF, Business Anti-Corruption Portal, The New York Times,
Photo: Reuters

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Poverty in Kazakhstan

kazakhstan
While Sacha Baron Cohen may have put Kazakhstan on the map with his fictitious role as a journalist in the movie “Borat,” Kazakhstan today stands as a country that continues to face hurdles despite consistent economic growth over the past few decades.

A Central Asian country of nearly 18 million people, Kazakhstan is no stranger to economic uncertainties. Since gaining independence in the early 1990s following the collapse of the Soviet Union, Kazakhstan has experienced relatively steady economic growth, thanks in part to its expanding oil sector.

The country’s poverty rate declined by more than 50 percent between 1999 and 2004. Between 2004 and 2013, the nation’s GDP increased by more than 500 percent.

Nevertheless, nearly half of the country is considered to be in a low income class. Roughly 47 percent of the population maintains a monthly income of approximately $70.

Arguably most frustrating to many Kazakhstan citizens are the disparities in gross regional product (GRP.) Because some parts of the country are more resource-rich than others, inconsistencies in wealth have affected some Kazakhstanis more than others.

Even though the country has seen substantial economic growth in recent years, specifically in the oil, gas and minerals industries, employment levels in these industries have not matched the nation’s economic growth.

Following the turn of the century, much of the nation saw considerable gains in employment and labor productivity. Yet, the agricultural region of Kostanay and North Kazakhstan did not experience the same growth as others parts of the country. West Kazakhstan saw significant economic gains in the late 1990s following the introduction of an oil pipeline stretching from the Caspian Sea to China.Perhaps surprisingly, Kazakhstan’s oil-rich areas have also become the nation’s most impoverished.

The minimum income level below the subsistence minimum in Kazakhstan is $35 per month. Any amount below the minimum is considered as poverty. Between 1998 and 2003, the number of people living in poverty in the country fell from 5 million to 3 million.

According to a recent U.N. Development Programme report, unemployment and low income remain the primary causes of poverty in Kazakhstan.

Yet, it is hard to overlook the respectable economic gains the country has seen over the past two decades. Kazakhstan has made considerable headway in its attempts to cement its standing on the world stage. Last month, President Nursultan Nazarbayev signed a new law to lift to visa restrictions, enact tax exemptions and help stabilize tax rates to interest foreign investment, especially with the United States and other Western powers. These moves, among others, will help the country in the long-term as it continues to make strides against poverty.

– Ethan Safran

Sources: The World Bank, World Health Organization, CNBC, IRIN, USAID
Photo: Breitbart

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#BringBackOurOil: A Study of the Nigerian Economy

nigerian_economy
Two years ago, young people flooded Facebook with Kony 2012. Today, still awaiting the capture of Joseph Kony, the world has reacted to the April 14 kidnapping of hundreds of schoolgirls by the now notorious Boko Haram. Whether these trends through social media represent a genuine interest in world affairs, or simply an opportunity to self-promote, #BringBackOurGirls has indeed generated publicity for Northern Nigeria.

An understanding of the origins of the group, which calls itself Jama’atu Ahlis Sunna Lidda’awati wasl-Jihad, or “People Committed to the Propagation of the Prophet’s Teachings and Jihad,” warrants a brief examination of life in Nigeria.

The paradox of the Nigerian economy has troubled the nation for decades since gaining independence from the British. How can the largest economy in Africa belong to a country in which 70 percent of its population still lives on less than $1.25 per day? Nigeria also has the largest number of children not in school, yet young Nigerians can be found scattered throughout the most prestigious universities in Europe and the U.S.

The answer to this inequality lies in the handling of the nation’s most prosperous natural resource: oil. Petroleum accounts for over 95 percent of all Nigerian exports and generates billions of dollars in profits, yet the Nigerian people receive little benefit for the extraction of their natural resource; instead, most profits never move beyond the select elite of Nigerian society.

This economic mismanagement has hindered the development of a strong middle class in Nigeria and has especially confined the Northern region, where poverty has soared to over 70 percent. Without diversification of the economy, the majority of Nigerians living in poverty are subject to the rise and fall of the price of oil as demonstrated over the past few years.

Another factor that has directly threatened human rights and has spread terrorism in Northern Nigeria is the environment. Global climate change leads to drought and shortages of resources in the North that further burden an already impoverished population. Desperation drives unemployed and young Northerners to join the ranks of the extremists. The Maitatsine sect, widely viewed as the precursor to the Boko Haram, began in the midst of an ecological disaster that displaced thousands of former farmers and herdsmen.

Corruption and inequality in Nigeria has facilitated the emergence of the Boko Haram, which, under the leadership of Abubakar Shekau, has waged war in the region for the past five years. The Boko Haram grew after its founding in 2002, with the goal of imposing Sharia law upon all of Nigeria.

Having lost its original leader, who was publicly executed in 2009, the group rallied together and freed over 700 of its followers in a 2010 prison break.

The kidnapping of the schoolgirls in Borno is only the latest of the violent attacks the group has committed. No hashtag trend spread with the same magnitude as #BringBackOurGirls when 50 plus schoolboys died in February, nor when the group shot 40 sleeping students in dormitories at an agricultural college in 2013, nor the April 14 bombing that killed close to 100 people. More recently, at the beginning of May, the group destroyed a bridge near the Cameroonian border, killing 30. The Boko Haram attacked a second bridge on May 9 with an unknown number of casualties.

The rise of the Boko Haram generates concern within the international community, and yet that same community has allowed for the conditions conducive to such violence for years. Without addressing poverty in Nigeria, groups like the Boko Haram will continue to flourish.

– Erica Lignell

Sources: CFR, The Guardian 1, UNESCO, The Guardian 2, The Guardian 3, Al Jazeera, Time, Oxford Journals, BBC, CIA

Photo: BBC

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Crisis in Rural Sudan

Rural Sudan Drought
Conflicts over oil in Sudan, North Africa’s largest country, caused a series of price inflations that have greatly affected the population. As Sudan’s largest natural resource is oil, the country experienced years of turmoil and conflict with bordering countries over the rights to oil fields. The increase in the price of oil is further reflected in transportation, and the isolation gap between urban and more rural areas has grown. As a result of this isolation, rural areas are unable to access necessary resources and economic growth. These areas have experienced low human development and according to the World Bank Sudan ranks 171 out of 187 countries on the human development indicator. In order to better human development the country must focus more on social and economic factors, especially in these rural communities.

Sudan is mostly made up of rural areas, which are drastically affected by drought, famine and conflict. In particular, the region of Darfur has suffered considerably and is currently the poorest area of the country. In fact, the land in Sudan is unfit to farm because of unreliable rainfall and the area faces major drought. Due to these circumstances, more than half of the population of Sudan lives in poverty and isolation.

Sudan also faces inequality and underdevelopment for most people living in these areas. For instance, access to health services is scarce, leaving more than half of the population without access to health resources. Due to the lack of resources in the health sector the child mortality rate in Sudan is extremely high, with  111 child mortality deaths per 1,000 births. In addition to a high child mortality rate, more than half of the population does not have access to safe drinking water. Instead, these communities rely on rivers, wells, and lakes as their drinking source.

In addition to these factors, there is an extreme lack of education in Sudan, especially for young girls. Even if a young girl does have the option to attend school, she becomes at risk of rape and other forms of violence.

There is an obvious need for social and economic development in rural areas to increase Sudan’s overall human development. Children in rural communities must have equal opportunity for a safe education to improve these areas. Also, while there is a substantial focus on oil, the country should instead shift to agriculture so that proper farming practice can be promoted in rural communities. This would foster economic development and lessen the isolation gap that these rural areas currently face.

– Rachel Cannon 

Sources: The Guardian, Rural Poverty Portal
Photo: Energy Forecast