Saturday, December 16, 2017

Instability in resource-dependent countries

It is important for Trinidad and Tobago to take a silent walk down memory lane. There is a widespread consensus that natural resources, endowment or lack thereof, have negatively impacted on the development of several countries.

Two critical bits—the rentier state theory and the resource curse thesis—argue the dependence of national economies on the export of natural resources causes massive political, economic and social distortions, provoking, among other things, an over-proportionally high rate of various kinds of internal vio­lence.

Oil is considered to particularly increase the likelihood of violence, as compared to other resource endowments.

Mahler (2009) posits the linkage between oil rents and authoritarianism is attributed to oil rents fostering the formation of stabilising patronage networks, widespread clientelism, and “assistentialist” distribution policies as opposed to existentialism, which in turn dam­pens the democratic pressure from the population and which may also result in the de-politicisation of the society. Secondly, the abundance of revenues generated from the oil sector relieves policymakers of the need to tax the population. This, again, may liberate the political elite of demands from the population for political participation and accountability on the part of the elites.

Ross (2001) illustrates resource wealth may make it easier for authoritarian rulers to use violence in the form of political domination because it helps in financing an extensive, oppressive State apparatus.

Within the last decade or so, the resource curse thesis has progressively gained importance within the theoretical debate on natural resources. Some argue resource wealth is linked to poor economic growth and other economic problems.

The central hypothesis is resource-dependent countries are more likely to undergo internal instability and violent conflicts than countries which are not depending on the export of resources.

The mechanisms assumed to be responsible for this linkage include the fact that natural resources can be the motive for violent conflicts. This means parts of the population might feel deprived of the financial benefits of the resource revenues, while possibly suffering from the ecological and social impacts of production. Furthermore, resource revenues can serve as a catalyst for violent conflicts by financing the hidden economy and other actors involved and can thus have a prolonging effect on conflicts.

Finally, resources, especially oil, can also indirectly increase the likeli­hood of violent conflicts by weake­ning political institutions and/or by triggering socioeconomic decline. Authors such as Fearon and Latin argue “oil producers tend to have weaker State apparatuses than one would expect given their level of income because the rulers have less need for a socially intrusive and elaborate bureaucratic system to raise revenues”.

So then, where would you consider a hotspot?

Omardath Maharaj

via e-mail