Wednesday, 25 April 2012

'Paradox of Plenty' - Myth or Reality???

Ever since watching the film Blood Diamond, reading some of Tim Butcher's books on various African countries and revising the impacts of colonialism on sub-Saharan African development; I have been thinking about this idea of the 'Resource Curse', also known as the 'Paradox of Plenty'. The general idea is that, in some cases, on balance, natural resource abundance is more of a hindrance than driver of development...... BUT the question is, is this a myth or can an abundance of natural resources significantly hamper development?

Attraction of colonial powers to Africa is perhaps testament to the existence of the ‘Paradox of Plenty’, whereby the abundant raw material reserves easily exploitable and profitable offered by Africa, provoked detrimental European attention, consequential impacts clearly visible in Sierra Leone and along the Gold Coast. This is not only seen in Africa but in other parts of the world too and neo-colonialism in Africa and South America is arguably a continuation of this trend. This is the idea on its very basic level and there are many complexities to it, with economic repercussions, such as economic vulnerability as perhaps countries with one abundant raw material are more likely to rely on that for trading and industry, generating a lack of economic diversity that leaves the nation vulnerable to market fluctuations.

However, as a continent, South America through preferential trading has illustrated the benefits that possessing resources can have and how, if exploited, they can help accelerate the process of development. Therefore, this indicates that if utilised appropriately it can help rather than hinder development so why is it then that having resources has so far failed to aid African development?
The re-occuring development hindrance seems to be the lack of peace and political stability throughout the continent and once peace can be achieved then perhaps development will occur. However cultural differences are so inherent in society, to a degree not previously seen that, when combined with political instability formulates a strong barrier against trade and ensuring environmentally sustainable resource exploitation can be utilised to generated economic sustainablility that can support development.

As with much of this Development and Globalisation stuff, there is no right or wrong answer, but forming opinions on it is crucial so let me know what you think! Does the Paradox of Plenty exist in reality??? And, if so, what can be done to dilute its influence?

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