Economy, Posts

The curse of riches.

March 9, 2018
Africa is a deposit for 15% of petroleum, 40% of gold, 80% of platinum. It is the richest continent in diamonds and it owns uranium, copper, iron ore, bauxite, cobalt, manganese. More than 25% of its export depends on these natural resources and the economies of 20 countries live on their extraction – 97% of Angola’s and Nigeria’s GDPs is created thanks to petroleum.
Being totally dependent on only one activity can result in a lethal curse for these counties: the famous curse of the riches.
Moreover, we must consider that the incomes created by the selling of crude oil are stuck in few people’s hands, they are not reinvested in development programmes and slightly affect quality of life of local communities. In countries with intense export of raw materials, corruption and everlasting robbery of resources are making poverty’s level increase: ridiculous and tragic at the same time, but unfortunately true.
Wangari Maathari, in her book “The Challenge of Africa”, reports a situation which could seem strange if compared with the African one, but that fits: Norway. Norway is an example of a country, which in 1930 was poor and forced 15% of its inhabitants to migrate for economic reasons. When they found petroleum, the country recovered and gained first places in world rankings – it ranked third for the highest per capita incomes.
Its strategy was responsible: from the selling of petroleum it earned enough money to create a sovereign fund of billions of dollars, and thanks to it, it now invests regularly in other kinds of economies and in other growth sectors, diversifying and decreasing risks.
The demonstration that even petroleum has a silver lining.

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