Fighting the Resource Curse
| Published date | 01 September 2013 |
| Date | 01 September 2013 |
| DOI | http://doi.org/10.1111/1758-5899.12069 |
| Author | Leif Wenar |
Fighting the Resource Curse
Leif Wenar
King’s College London
Abstract
The resource curse can strike countries that export high-value natural resources, such as oil, metals and gems.
Resource-exporting countries are more prone to authoritarian governance, they are at higher risk of civil wars and they
tend to suffer economic dysfunctions such as corruption and slower growth.
1
Associations between resources and
these pathologies are seen in the list of the ‘Big Five’African oil exporters: Algeria, Angola, Libya, Nigeria and Sudan.
The recent histories of mineral exporters support the correlations: for example, ‘blood diamonds’fuelled Sierra Leone’s
decade-long civil war, and the continuing conflict in the metal-rich Democratic Republic of the Congo has cost hun-
dreds of thousands of lives. The phenomenon is not solely African: Syria, Yemen and Turkmenistan, for example, are
also resource-cursed. Moreover, poor governance in resource-cursed countries can engender follow-on pathologies,
such as a propensity to cause environmental damage both domestically (for example, through the destruction of for-
ests) and globally (through increased greenhouse gas emissions). Most research on the resource curse has focused on
the exporting countries. Here I focus instead on major importing countries, especially those in the G8. First I survey
how the resource curse endangers the core interests of importing states, and how the laws of importing states drive
the resource curse. The second half of the article describes a new policy framework for importing states that will
improve international trade in resources for both importing and exporting countries.
The resource curse harms importing states
Importing states that engage commercially with
resource-cursed countries risk channeling funds to hos-
tile, repressive and failing regimes in ways that threaten
their national interests. For example, some of the regimes
that have been most antagonistic to the west in the past
40 years (e.g. the Soviet Union, Iran, Iraq and Libya) have
been financed by western oil and gas payments. As we
saw most recently in the Arab Spring, resentment of
repressive regimes in the Middle East has fuelled radicali-
zation and anger at the western states that have sup-
ported those regimes. Taking the US as an example,
most of the countries on the US ‘State Sponsors of
Terrorism’list have been oil exporters, and groups that
the US considers threats to peace (such as al-Qa’eda and
Hezbollah) have used conflict diamonds to escape US
asset freezes. Today terrorists continue to seek havens in
areas of resource-fuelled conflicts, such as the Great
Lakes region of Africa.
One importing-state strategy for securing resource
access has been to support friendly ‘rentier’regimes,
which sustain their rule by spending resource revenues
on patronage and security forces. The long-term results
of this strategy have been mixed. Some rentier regimes
have been overthrown by resentful populations (for
example, the Shah in Iran) or have become hostile
themselves (such as Hussein in Iraq and Gaddafiin
Libya). Political uncertainty has increased price volatility,
which has contributed to global economic instability.
(Four of the last five global recessions have been pre-
ceded by an oil price spike.) Moreover, even friendly
rentier regimes tend to lose governance capacity over
time, and regimes supported as strategic partners have
found it harder to maintain order as their people gain
greater access to information, adopt antistate and anti-
corporate ideologies, and acquire weapons (as in Nige-
ria, Yemen and Syria). The declining capacity of rentier
regimes to govern has forced importing states and their
extractive corporations to attempt remedial governance
through foreign aid and through ‘corporate social
responsibility’(for example building schools and hospi-
tals, monitoring environmental impacts). However reme-
dial governance is quite difficult and it opens states
and firms that attempt it to escalating demands and
protests from local populations.
Importing states and their resource firms face high
risks when engaging with resource-cursed countries, yet
the costs of withdrawal are also high. Unilateral
commercial withdrawal from an exporting country cedes
resource access to competitors, and is thus ineffective
in reducing the resource curse. This combination of high
risk in engagement and high cost of withdrawal creates
strong strategic counterpressures on importing states.
In this sense, importing states are themselves
resource-cursed.
©2013 University of Durham and John Wiley & Sons, Ltd. Global Policy (2013) 4:3 doi: 10.1111/1758-5899.12069
Global Policy Volume 4 . Issue 3 . September 2013
298
Special Section Article
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