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The Devil’s Excrement: can oil-rich countries avoid the resource curse?
By: Moises Naim
The Devil’s Excrement
by Moises Naim dives into the phenomenon of how countries rich in natural resources are doomed to be poor. It was Venezuela’s oil minister who coined the statement that oil was not black gold but rather it was the devil’s excrement. What he meant was that when a country is rich in resources they tend to be underdeveloped because of their resource wealth. Resource-based economics is known for enhancing their economy through imports due to profitable exchange rates but deteriorating anything they export that is not their main article of trade. Right away the biggest problem with this is that there is not a big demand for jobs when it comes to selling their biggest commodity. Oil based countries rely on 80 percent of their revenue from exporting its resource but it only employ 10 percent of the economies workforce. This causes high income inequality. Not only can oil be bad for the people who call the country their home but more importantly it causes the leaders of that country to grow corrupt and become power hungry. The colossal wealth oil generates allows for the government to not have to tax their own people which should be another positive. Unfortunately though, when governments aren’t collecting on taxes from their people they feel less responsible for their well-being and therefore move around their financial resources in a way that is beneficial to them and thus a corrupt leadership is born.
This article ties into our topic of energy imperialism because it illustrates the control oil gives to whoever is in charge of it. The rise and fall of oil prices can have devastating effects on those who rely on it. When prices are growing it can lead to over investment, reckless risk taking, as well as too much debt. When prices drop there are bank crises followed by severe budget cuts that affect people who rely on various government programs. Their corrupt government systems are hard to dismantle. They practice imperialism on their political opponents by spending two to ten times more of their revenue on their military than those who are not in possession of oil. This means they are more likely to retaliate or go to war. One way energy imperialism is being force to slow down is by having multinational corporations adhere to being more transparent about their business dealings. Norway and the US have taught us that oil and prosperity can go together. Then there are undeveloped countries such as Chile and Botswana that give us hope for the future.
For Oil and Empire? Rethinking the War with Iraq
By: Michael T. Klare
For Oil and Empire explores the great debate of whether or not the United States should have entered into war with Iraq leaving many to question the real motives behind this infiltration. The author looks at both sides of the argument giving both an optimistic approach but ultimately siding with his less optimistic hypothesis that would ultimately end in unnecessary blood loss. The US claims that their reasons for entering into war is to ultimately retrieve Iraq’s weapons of mass destruction (WMD) before they can be used against them. Iraq is however not one of the countries that should be of concerned according to Klare. Both Pakistan and North Korea possess the largest arsenals and Korea has even gone as far as to threaten the US if it gets involved claiming it will turn their country into a “sea of fire.” From these facts the pursuit of retrieving WMD that put the lives of people living in the US in trouble doesn’t seem justifiable. They don’t have the resources to invade and occupy every single country that could be a hypothetical threat to them. The real reason in the eyes of the author is the pursuit of oil and maintaining America’s status as supreme world power. There is much concern over their oil dependency as they now rely on foreign oil for 55 percent of its energy requirements and is expected to rise another 10 percent by the year 2020. The need for oil has become America’s Achilles heel. Securing control over the Persian Gulf’s oil supply would ensure the US remains a global super power.
This article relates to the topic of energy imperialism perfectly as it shows how far one side will go to secure its control of a valuable energy supply. As the US becomes more and more dependent on Saudi Arabia’s oil supply they are keen on taking out anyone who stands as a threat to their main import. Since the Second World War the United States created a policy known as the “Carter Doctrine” which goes on to say that in order to protect the Persian Gulf they will employ “any means necessary” including military force. Whoever controls the Gulf also controls the rest of the world economies, a powerful position sought after by the Americans. Saddam Hussein is viewed as being a major threat to the supply and must be taken out of power. With Saddam out they can access Iraq’s oil supply if the Gulf ever begins to diminish. If The American’s can occupy Iraq and install a new US friendly government they will solve their oil problem for at least another decade.
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