Curse of Natural Resources - Yüksel Yasemin Altıntaş


Energy resources have always been strategic importance for states. States set their priorities during the wars to preserve or gain resource-rich locations. There was a direct connection between the amount, and the type of resources states owns and its power in the international arena. For instance, during WWI, Wilson Churchill’s decision to shift from coal to oil in the British navy has increased the power of the British navy, and it affected the direction of the war. Over time due to its yield and storage advantages, nations, particularly the Western countries, became more dependent on hydrocarbon resources. Controlling the oil-producing countries and oil checkpoints become vital, priority for the nations. Thus Western states tried kept oil-rich states, mostly in the Middle East, under control to expand their power during after and before the World Wars. Chokepoints like Strait Hormuz and Suez Canal can be given as an example to these points. This situation created and expand the gap between the colonialist state and colonized state, which affected the destiny of the World. Even though we live in a different political era right now, energy security, both in terms of militarily, democratically and economically, still maintains its importance.


Historically we can analyze the importance of energy in three main categories. Stage one: the shift from coal to oil. Oil had the upper hand in terms of productivity, and it was widely-used in compare to oil. However, due to the political instabilities of oil-producing nations, with the energy sanctions and oil crises, states started to look at alternative energy recourses to oil. As a result of these replacement search, we entered stage two: expansion on the usage of natural gas and liquefied natural gas (LNG). In compare to oil due to its ease of handling and storage, natural gas emerged as an alternative to oil. Nonetheless, in particular regions such as Europe, due to transmitter country and oil provider country’s quarrel gas buyer countries started to face up with the risk of not being able to purchase the gas that they need to. This instability forces them to rely more on their energy sources, which means investing more in renewable energy sources, which generates the third stage, the rise of renewables.


Environmentalists can support the expansion of renewable resources due to climate change concerns. On the contrary to the popular myth, renewable energy also possess certain dangers to the environment. To begin with, to produce solar panels, windmills and nuclear power plant producers needs rare-earth elements. The majority of these oxide mines are located in the developing world where the mining rules and regulations are not fully established, or states lack the power to implement these regulations. As a result, during the extractions process, both labor’s health conditions and the environment gets negatively affected.


Democratizations wise, as might be expected to gain the upper hand in renewable energy production, states have to either invest more in their IT or purchase this equipment (solar panels, windmills, a nuclear plant) from other nations. In that case, developing countries become, again, dependent on the Western World. Since nuclear power plants seem dangerous under the control of unstable regimes, the international community may demand specific political changes in the developing World. They may try to democratize these nations or make sure to keep these nations under their watch, which will create a forward-backward linkage between developing states and developed states. Under these circumstances, installing an atomic power station does not seem the best alternative for the majority of the developing countries, especially for the ones in Africa.


Many scholars such as S. Haber and V. Menaldo claim that a negative relationship exists between the number of natural resources states have and their democracy level. When we look at the world map, recourse rich geographies, and states democratization index, this claim may sound accurate. However, to not fall in omitted variable bias culture and historical backgrounds of these countries should also be taken in to account. Developed states like the US and Canada also owns mineral mines and oil fields. Also, in Latin America, mineral mines and oil fields contribute to state development by furnishing their economy. One can say that, as I mentioned in my previous article last week, in the Middle East and Africa, people work under anti-democratic, inhumane conditions. States regularly experiences interstate and intrastate conflicts over the control of natural resources.


My response to such claims is many African and Middle Eastern states got their independence later than American states. USA, Canada, and other states in Latin America earn their independency more than 100 years in advanced in compare to Middle Eastern states. Artificial borders drawn by the colonial states without taking into account cultural, religious, ethnic differences and socially divining these people into groups to control the territory create deep-rooted problems among the citizens in a majority of the states within Africa and Middle Eastern regions.


In compare to mineral mining, oil and gas extraction requires specific education. In that sense, oil and natural resource-rich states have to either educate their workers or import workers to work in these fields. When a state educates its citizen’s percentage of skilled labor increases, after a certain point, these states may become skilled labor importer states. In the other scenario, when a country receives foreign workers, its domestic market revivals with the spendings of the guest workers. In some cases, the host state may end up opening new markets that sell cultural items and entertainment places for these workers.


To sum up, with the rise of renewable energy consumptions, energy transitions are slowly emerging. However, at least at this point, due to infrastructure and IT limitations, it would be unrealistic to expect a full transition from hydrocarbon resources to renewable energy sources. Developing countries would face up with many problems during the extraction of valuable minerals, which will affect their development and democratization level negatively. Nonetheless, these states would experience similar problems if there would be less demand for noble metals due to their structural problems. If these countries managed to solve their intranational issues, then they can rapidly improve their state structures. Purchasing and or using renewable energy equipment may also make underdeveloped states more dependent on developed nations and expand the economic gap between third world nations and developed countries. Also, one should keep that in mind that with the Western World’s increasing demand for minerals, the likelihood of intrastate conflicts can also increase.


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