Diamonds, oil trafficking and conflict financing
8 important questions on Diamonds, oil trafficking and conflict financing
Resource dependence results in economic underperfomance.
- What are the results (name 3) of economic underperformance?
- High price fluctuations, decling terms of trade.
- Natural capital depreciation.
- Crowding out of the nonresource sectors through local currency overvaluation and rent seeking.
- Resource dependence results in economic underperformance and... ?
- A weaking of governing institutions that makes a society more vulnerable to armed conflict.
Resource dependence does not assume war is (simply) greed-driven, but emphasizes contextual conditions that increase conflict vulnerability.
- Exposure to high price fluctuations, crowding out of other sectors, corruption, fiscal independence and overconsumption.
- Name 4 factors that accomodate a nation to be most vulnerable to armed conflict:
- Low income per capita.
- Declinging economic growth rate.
- Weak state coercive capacity and institutional authority.
- Political regimes in transition.
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Resource curse
Resources can make countries vulnerable.
- How?
- Resources create uneven development between areas.
- Vulnerability has a spatial dimension.
- Spatial dimension = Ruimtelijke dimensie.
Pheripheralization and uneven development shaping the political economy.
- Not only caused by resource curse, but wider sources of economic margnalization and political governance.
- For example:
- Colonial legacy.
Presence of natural resources poses a risk of conflict over who has access to them.
Such conflicts can lead to violence (for example militarization, pollution, labour issues).
- Name 4 countries with natural resources and conflict?
- Sudan.
- Angola.
- Ogoniland (Nigeria).
- The Democratic Republic of Congo.
Natural resources create economic opportunities for combatants.
Conflicts are not just about control of natural resources.
- Where are conflicts even more in control of?
- The commodity chain.
- Where does the commodity chain (supply chain) connect to the oil and diamond market?
- illegal activities.
- Arms.
- Labour
- Control of pipelines.
- The kidnapping of refinery staff.
- The commodity chain also connects the production region to other regions in the world.
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