Shipping Policy to Fight the Resource Curse
| Author | Leif Wenar,Ioannis Kouris |
| Published date | 01 May 2018 |
| DOI | http://doi.org/10.1111/1758-5899.12544 |
| Date | 01 May 2018 |
Shipping Policy to Fight the Resource Curse
Leif Wenar and Ioannis Kouris
King’s College London
Abstract
Transnational trade rules endow authoritarians and armed groups with unaccountable power in states rich with natural
resources. This structural flaw in international trade generates the ‘resource curse’phenomena that have driven many of the
world’s most serious crises since the 1970s. Attempts to curtail this unaccountable power from outside resource-rich states
have not been successful, and crises caused by this structural flaw continue to plague the global community. The shipping
sector provides a promising location for reforms to fight the resource curse, as it is a sector where extensive, unified and
enforceable regulations have long been established.
Policy Implications
•States should incentivize shipping firms not to carry resources sold by authoritarians, armed groups, and others who sell
the resources beyond any accountability to the people of the country of export.
•States should pass domestic legislation implementing vessel blacklists, as well as banking and insurance restrictions, on
shipping firms that carry resources from authoritarian and failed states.
•Individual and institutional investors should use a Clean Hands Shipping Index to shift their portfolios away from firms that
carry more goods from authoritarian and failed states.
•States should actively pursue a convention at the International Maritime Organization that will use its global regulatory
capacity to coordinate state action against the resource curse.
The oil curse
Today’s transnational trade laws allow authoritarian regimes
and armed groups to sell off the natural assets of resource-
rich countries beyond any public accountability. Revenues
from such resource sales then translate into hard power:
authoritarians can use resource revenues for violence and
clientelism; armed groups can use resource revenues to start
or escalate a civil war.
Political scientists call the result ‘the political resource
curse’. Michael Ross of UCLA has shown that oil-rich states
outside the OECD are 50 per cent more likely to be ruled by
autocratic regimes, and 200 per cent more likely to be suf-
fering civil conflict. No country receiving high oil rents
became democratic between 1960 and 2010, and in striking
contrast to the rest of the developing world, the average
large oil state today is no richer, no freer and no more
peaceful than it was even in 1980 (Ross, 2012).
Nor are the risks of the oil curse confined within oil-
exporting states. As Jeff Colgan (2013) of Brown University
has shown, petrocrats who hold to a revolutionary ideology
(like Ayatollah Khomeini or Muammar Gaddafi) are three
times more likely to start militarized interstate disputes. Five
of the seven countries ever on the US list of State Sponsors
of Terrorism have been oil countries. When the US State
Department last drew up a list of countries whose nationals
require extra security screening before flying to the United
States, two-thirds of the countries were oil exporters (Wenar,
2016).
Indeed, since the non-democratic oil states began to
nationalize their oil in the 1970s, most of the major foreign
threats and crises confronting the West have originated in
oil states, such as Iran, Iraq, Saudi Arabia, Sudan, Libya, Syria
and Russia. Oil-enriched authoritarians have launched
aggressions against other states (e.g., Saddam Hussein’s
invasion of Kuwait) and against their own people (e.g., Omar
al-Bashir’s genocide in Darfur). Oil-enriched authoritarians
and militias have also driven states into civil conflict, as we
have seen in Iraq, Syria, Libya and Yemen.
Going farther back, an oil boom kept the Soviet Union’s
economy from collapsing in the 1970s and 1980s, and paid
for the Soviet invasion of Afghanistan (Kotkin, 2008). And
over the past four decades, the Saudi regime has spent tens
of billions of dollars of oil revenues proselytizing its intoler-
ant version of Islam worldwide in what may be the largest
ideological campaign in human history (Maass, 2009). Both
ISIS and Al-Qaeda adhere to violent mutations of the Salafist
Islam that the Saudi regime has spread.
Oil is the world’s most valuable traded commodity, so the
curse that afflicts oil-exporting states is especially intense
(WTO, 2015). Yet states heavy with other extractive
resources like metals and gems also risk dysfunctions in
their political economies such as increased risk of civil con-
flict (Besley and Persson, 2011; Sorens, 2011).
At the most basic level, the analysis of all of these
‘resource curse’phenomena is that resource exports give
coercive actors unaccountable power. Essentially, whoever
in non-democratic countries can control resources by force
©2018 University of Durham and John Wiley & Sons, Ltd. Global Policy (2018) 9:2 doi: 10.1111/1758-5899.12544
Global Policy Volume 9 . Issue 2 . May 2018
184
Research Article
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