My article is about oil production
in Angola. Angola is an incredibly resource rich country that has seen huge GDP
growth in the last decade. This is largely due to oil reserves, which account
for 90% of Angola’s revenue. Luanda, Angola’s capital has developed beautiful
buildings and skyscrapers and offers expensive luxuries. However, right next to
the capital city there are miles of slums that are home to citizens who make
less than $2 a day. Most of Angola is impoverished and ordinary citizens do not
share any of the benefits of oil production. This raises the question of where
the oil money goes. Sonangol, Angola’s state oil company has many of its oil
deals confidentially, making it difficult to know where the profit goes.
Sonangol’s executive manager stated that the company produces billions of
dollars worth of oil a year and a large amount of the profits are used to
develop Angola. However, Human Rights Watch has noted that tens of billions of
dollars had never made it to Angola’s central bank. This oil money has disappeared
and Angola’s elite are getting richer. Still, Angola’s government claims that
there is no corruption in their oil industry.
I chose this article because I
believe it is a strong example of a country experiencing the resource curse. As
more oil is discovered in Angola, greater instability and corruption is present.
Different rebel groups will fight over resources, which brings conflict and
violence. With billions of dollars disappearing, corruption will only grow
stronger as the elite get richer. This also makes it difficult for countries to
give foreign aid to Angola because the aid funding is likely to end up in
corrupt hands and never reach the citizens. I think that policymakers should
demand that Angola’s oil companies and government be more transparent. If the
government claims there is no corruption, there should not be a problem with
letting the international community see Angola’s affairs. If the government
refuses, sanctions should be put on Angola until they become more transparent
or until oil profits benefit the citizens directly.
Article: http://www.cnn.com/2012/11/28/business/angola-oil-revenues/index.html?hpt=iaf_t4
Clearly you lay out the fundamentals of the resource curse however, I believe that you state the opposing argument best when you state, "As more oil is discovered in Angola, greater instability and corruption is present." While this may seem like a causal relationship with oil leading to corruption, it very well could have a different trajectory. Corruption could have been present in Angola before the oil was discovered, and then exacerbated by the increase in funds. While I'm not positive that this is the case, I believe that it deserves a stronger look before we simply declare this an example of the resource curse.
ReplyDeleteAs in many other oil rich African nations, the general public of Angola sees little of the wealth created by the industry. I recently wrote a paper on the oil industry in Nigeria and it seems that the two nations have many similarities. I agree with David, that already existing state corruption could have simply been exasperated by the discovery of oil in Angola. I know this was the case for Nigeria and many other resource rich nations. Unfortunately, in many of these nations, the trend seems to be that the rich get richer and the poor get poorer.
ReplyDeleteI think there is a level of corruption in every government with or without resources. I think Angola is an example of the resource curse. Whether or not there was corruption in the government before oil there certainly is now after the discovery of oil. Although, I agree that Angola's oil companies and government should and needs to be more transparent I worry about the international community putting such demands on the country. Shouldn't the international community respect Angola's sovereignty? On the other hand, if the international community doesn't do it who else will? It is definitely a complex issue.
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