The Natural Resource Curse

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The natural resource curse is when a highly prized natural resource is found in a poor or weak country and instead of lifting the standard of living it drops it to a lower level than before perhaps even invoking civil war. One factor that contributes to this is a weak government that can not control the trade of the resource, either through physical or legislative means. Second is corporations taking out all the money that the resource provides. If all the profits go to the company and not the local economy, the standard of living will never rise. This is espcially true if foriegn workers are brought in, such as oil workers, because locals to not have the skills to harvest this resource.

How Botswana avoided this is inspiring and brilliant. First it developed a long term plan which has led to free health care and public schooling for the country. Second the country has an actual stake in the company mining the diamonds. The government owns half of the section of De Beers that is doing the work. Meaning it is not just exporting rough diamonds but finished product. Leading to the resource not being a curse but a blessing.

What led to the conflict in Cote D'Ivoire is that one part of the country had and the other had not. The rebels in the north have diamonds to smuggle and in the south the government uses the cocoa trade to fuel its military needs. in order for them to stop this from happening again in the future they need to diversify the economy and spread resources around.

What Botswana has done is make laws the prevent coruption and make the companies show what they are doing with the money and the diamonds. Seocondly they own half the diamond company assuring the wealth stays in the country.

The international community can help stop this by actually going after the companies funding the conflict zones that is what will actually put a stop to the blood shed.

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