Third, the high levels of corruption, extortion, and poor governance that accompany resource wealth often generate grievances leading to rebellion. Second, wealth from resources may enable rebel groups to finance their operations. First, the prospect of resource rents may be an incentive to rebel or secede. At least three factors could explain this correlation. Econometric studies confirm that the risk of civil war greatly increases when countries depend on the export of primary commodities, particularly fossil fuels. A partial list would include Nigeria, Angola, Burma, Papua New Guinea (Bougainville), Chad, Pakistan (Balochistan), and of course Sudan. The list of civil conflicts fought at least in part for control of oil and gas resources is long. Despite having one of the world's highest growth rates from 2005 to 2010, averaging some 17 percent annually, its score on the human development index remained a miserable 0.49, and its infant mortality rate was lower than the sub-Saharan African average.įinally, the very presence of oil and gas resources within developing countries exacerbates the risk of violent conflict. And even when oil abundance produces high growth, it often benefits only a few corrupt elites rather than translating into higher living standards for most of the population. Other factors may include the volatility associated with commodity prices, which can have especially negative impacts on weak-state economies and the underdevelopment of agricultural and manufacturing sectors during boom periods in resource-based economies. One culprit may be the so-called "Dutch disease," whereby resource revenues raise a country's exchange rate, hurting competitiveness in non-resource sectors. Natural resource revenues have also been linked to slow economic growth rates, inequality, and poverty. The history of the oil-rich Arab Middle East has long been a case in point-with Saudi Arabia being exhibit A. Together, they consolidate the power of entrenched elites and regime supporters, sharpening income inequality and stifling political reform. The same revenues also generate staggering wealth that facilitates corruption and patronage networks. Most obviously, easy resource revenues eliminate a critical link of accountability between government and citizens, by reducing incentives to tax other productive activity and use the revenue to deliver social services effectively. There are numerous hypotheses to account for this correlation, as I note in my book, Weak Links: Fragile States Global Threats and International Security.
"There are twenty-three countries in the world that derive at least 60 percent of their exports from oil and gas and not a single one is a real democracy," observes Larry Diamond of Stanford University. The correlation between energy dependence and authoritarianism is clear. There are concrete steps the international community can take to help break this curseįirst, a few facts. Fortunately, as my colleague Terra Lawson-Remer points out in a new CFR memo, all is not lost. Rather than contributing to freedom, broadly shared growth, and social peace, rich deposits of oil and minerals have often brought tyranny, misery, and insecurity to these nations. MORE FROM THE COUNCIL ON FOREIGN RELATIONSĪmong the many frustrations in development, perhaps none looms larger than the "resource curse." Perversely, the worst development outcomes-measured in poverty, inequality, and deprivation-are often found in those countries with the greatest natural resource endowments.
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