Thoughts on the Resource Curse

By Jason MacLeod on February 28, 2013 — 8 mins read

In Watt’s article Blood oil – The anatomy of a petro-insurgency in the Niger delta he argues that the myriad social interactions surrounding oil, which occur in multiple spaces and scales, operates within what he calls the “oil complex” – “a configuration of social, political, and economic forces” (Watts 2005, 9.6).  Complicating notions of environmental and commodity determinism, Watt’s asks us to rethink Collier’s “resource curse” and begin our analysis from this fundamental principle – oil is complex.  The question, “are oil-producing states restrained by the ‘resource curse’?” itself rests on the preposition that a “resource curse” exists. To put it crudely, Collier and his supporters theorized that resource rich countries (those with oil resources in particular) experience less economic growth and concomitant increase in conflict when compared to countries with less natural resources (Collier and Hoeffler 2005).  Corrupt institutions, the vagaries of markets, the dereliction of development and other economic sectors all converge within the “resource curse.”  We can look to states like Nigeria, Sudan, DRC, and Iraq as exemplary models of the “resource curse.”  The theory just seems to make sense.  As Weszkalnys notes in Cursed resources, or articulations of economic theory in the Gulf of Guinea, “the resource curse has now become the dominant narrative,” she goes on, “it is a narrative device that entices, and it speaks of money, greed, power and mysterious unknown forces. It is persuasive as a simple explanation of present-day events, and is readily adopted and adapted to what people already know” (Weszkalnys 2011, 357).  Politicians, economists, academics, and the media mobilize the “resource curse” as a way to explain the phenomenon in resource rich countries.  But, Wesckalnys states, “the resource curse was invented in response to an apparent failure of economic theory” (Weszkalnys 2011, 357).   Despite this, the curse took a life of its own while disregarding or ignoring its origination in NGOs, anecdotes, and civic activists and industrial consultants (Weszkalnys 2011, 357).  The answer to “are oil-producing states restrained by the ‘resource curse’?” is a resounding NO. To answer otherwise would be to ignore oil’s complex social-capital interactions.

In Watts’ article, Righteous Oil? Human Rights, The Oil Complex And Corporate Social Responsibility, he argues that oil interests have aligned with finance and weapons of war (Watts 2005, 9.6).  The framing of oil as a national security interest has proven the continued military attachment until the end of oil.  In the American context, it’s no secret that we invaded Iraq for oil.  Media and politicians can dress the military action in freedom and democracy, but most if not all of us know that’s not the case.  In the US the military is ingrained in us – normalized even.  Something to be proud of.  Thus, the military securing our future oil source is, well, American.  For it not only secures our current and future lifestyles, but it also secures our military presence in the Middle East.  How else can we idly stand by and watch the state spend billions if not trillions of dollars on another state known only by the abstractive media deluge?  US foreign policy clearly reveals the alignment of finance, weapons of war, and oil and its citizen’s acceptance of that relationship.  Collier argued that conflict derived from the resource curse is internal or externally economic, yet we cannot ignore external military pressures when deconstructing or critiquing the resource curse.

External threats to the oil complex also include corporate activity.  In Watts’ article, noted directly above, he argues “the oil complex is a particular manifestation of the ways in which global companies conduct business in conjunction with failed states, creating conditions in which egregious human rights violations can occur and have occurred” (Watts 2005, 929).   Host government contracts, such as we see in Turkey, clearly fail to protect human rights because the contract requires a forty year hold on developing human rights norms, among others.  We also see corruption between corporations and elites through payoffs designed to avoid legal ramifications of human rights abuses, et al.  We have also seen corporations providing military support to nation states whose citizens protest against state and corporate abuses.  We also see the blaming game – “it’s the government” or “it’s the corporation” as if shifting blame for environmental or human abuses changes anything.  In response to civic pressures we see corporations creating and enforcing self inflicted corporate social responsibility schemes.  Corporate social responsibility is “the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of its workers…as well as the local community and society at large” (Watts 2005, 9.21).   We can look to Nigeria and see the wondrous affects of corporate social responsibility – I believe we can conclude it is not an effective measure when issues go beyond the confines of oil.  The Nigerian insurgency, Watts argues, occurred because of “the political struggles over centralized oil rents, a struggle in which party politics, the electoral cycle, intergenerational politics, organized oil theft, and the history of ethnic exclusion played constitutive roles” (Watts 2008, 30) not because of what Collier and Ross frame as the resource curse.  Corporate social responsibility will not transform Nigerian social relations.  However, corporate social responsibility can provide some well-meaning support despite its contested effectiveness on the ground.

The two simplified examples noted above, external military and corporate influence, reveal two significant themes producing conflict in resource rich states, which lie outside of the sovereignty of the resource laden state.

The resource curse is based on neoclassical understanding of society, which requires a rational-choice actor a “methodological individualism” that requires “inability to conceive of society as something more than an aggregate of individual behaviour and an inability to explain what ‘the social’ is all about” (Weszkalnys 2011, 353).  In other words, the social must be stripped from existence – and not in a good way.  A person’s identity and the complicated being-ness that makes him or her unique is substituted by a maximization behavior concerned with benefitting the self all the while minimizing the costs.  Like the “resource curse” this makes sense to us.  Of course I build my life around what pleases me and avoid that which displeases me.  However, when we look at ourselves, we can readily and quickly recognize choices where we acted in contrast to this theory or made choices emerging from compassion, love, sacrifice, and service.  If we can recognize the complexity in ourselves, how can we expect that this model can be imposed, applied, and theorized upon millions of people?  We cannot begin to understand what motivates a desperate child in Nigeria.  We cannot place ourselves in her shoes.  We cannot empathize because we don’t know what it is like to be young, black, and living under the rule of vicious men.  Any thought otherwise would be a manifestation of what Richard Delgado calls “false empathy” – “the identification with someone but only in a slight or superficial way” (Delgado 1996, 70).  Delgado goes on “with [Gramsci’s notion of] false consciousness, a person of color identifies with and adopts the consciousness of the oppressor, in this case a white. With false empathy, a white pretends to understand and sympathize with a black. Each is counterfeit” (Delgado 1996, 71).  So, through the resource curse then, we can identify with the problems of these nation states and create what Collier calls “solutions.”

Neo-classical economics, still at the forefront today, would see these solutions as a way for these nation states to emerge from the resource curse.  Collier advances, “link[ing] resource revenues to some basic social service such as primary education… Resource extraction contracts could be written in such a way that more of the price risk was borne by companies and less by governments. International standard budget smoothing rules could be introduced – probably by the IMF – to guide governments as to how to save from favorable shocks…aid donors could have automatic temporary cushioning of adverse shocks” (Collier and Hoeffler 2005, 632) and i’m sure other offshoots and critiques emerge from this discourse.  I agree that rules such as these would benefit any state suffering from economic issues.  However, the simplicity to which the north would apply these reforms in nation states troubles me.  Economic reforms or cushions cannot forever battle the vagaries of capitalism and the weakness inherent within us.

Society’s relationship with oil and the global community must change for any long lasting benefit.  The violent and vicious elites in Nigeria must learn compassion.  Nation states and corporations must learn flexibility and kindness.  Power politics, academic theories, and governance cannot influence the world as much as transforming our relationships and understandings of others and ourselves.  How many centuries must go by to stop looking for answers outside of ourselves?  The question, “are oil-producing states restrained by the ‘resource curse’?” asks us to frame our understanding of the world in a binary – you either support the resource curse or you don’t.  In the end, I would rather reframe my response and argue that the resource curse does not restrain oil-producing states; it is our understandings of our relationships and ourselves that restrain us and states.  In the simple words of the Dalai Lama “love and compassion are necessities, not luxuries. Without them humanity cannot survive.”  No new technology or theory will generate this lesson.  How many centuries must go by before we realize and embody this simple lesson?  Before we realize we are altogether in the same boat?

 

Collier, Paul, and Anke Hoeffler. 2005. “Resource Rents, Governance, and Conflict.” The journal of conflict resolution : a quarterly for research related to war and peace Journal of Conflict Resolution no. 49 (4):625.

Delgado, Richard. 1996. “Rodrigo’s Eleventh Chronicle: Empathy and False Empathy.” California Law Review no. 84 (1):61-100.

Watts, M. 2008. “Blood oil: The anatomy of a petro-insurgency in the Niger Delta.” FOCAAL -UTRECHT- (52):18-38.

Watts, Michael J. 2005. “Righteous oil? : human rights, the oil complex, and corporate social responsibility.” Annual review of environment and resources. no. 30:373-407.

Weszkalnys, Gisa. 2011. “Cursed resources, or articulations of economic theory in the Gulf of Guinea.” Economy and Society no. 40 (3):345-372.