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HAVING RESOURCES: A CURSE OR A BLESSING?
“The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”— Sir Winston Churchill.
These words could apply to Venezuela, which is a socialist country that is today sharing its miseries. Venezuela is one of the most blessed countries. It is endowed with more oil deposits than most countries in the world and the quality of its crude is very good, requiring less refining. Venezuela has eight times the oil reserves of Nigeria, which is beset with problems such as a bloated bureaucracy, oil theft, kidnapping and terrorism. Yet Nigeria produces more oil than Venezuela today.
It is estimated that Venezuela has about US$14.3 trillion in natural resources. But its abundance seems to be a curse? As a resource-rich country, Venezuela is in the throes of a political and economic crisis with shortages of basic goods and soaring inflation. Many are starving because there is no food and no money to buy any more.
Venezuelans are dying because most medications are no longer available and many doctors have migrated. Its currency is worthless. It cost 3,000 bolivars to buy US$1. Inflation is at 1,500 percent, and creditors are not being paid. And the death toll from anti-government protests since April has reached 100.
While Venezuela has an abundance of resources curse, unfortunately, Japan, South Korea and Singapore are not blessed with any resources. Japan is a crowded country that is mostly of volcanic rock. It has no natural resources and its soil is very poor. As if that was not enough, in August 1945 the US dropped two atomic bombs on Hiroshima and Nagasaki. Tens of thousands died, buildings were destroyed and the environment suffered greatly.
Today, Japan is one of the great industrial miracles. Apart from being the world’s largest auto manufacturer, it produces electronic devices, computers, petrochemicals, pharmaceuticals aerospace equipment and is a leading ship-builder.
Like Japan, South Korea is also an industrial miracle. In the 1970s, it was described by the World Bank as being of “African Standard” which is the code for “broke.” Unfortunately for South Korea, the mineral resources on the Korean peninsula are all in North Korea whose leader is busy trying to build nuclear weapons to destroy everybody else, rather than develop the country.
Today, South Korea is one of the world’s leading industrial giants producing semi-conductors, automobiles, wireless telecommunications and ship-building. It exports US$552 billion of goods annually, and unlike North Korea, it is engaged in a massive economic expansion programme.
Venezuela is 1,300 times the size of Singapore, which is about the size of Berbice. Singapore is not endowed with natural resources. It imports water from neighbouring Malaysia. But it has one of the most prosperous and advanced economies in the world. In 2016, it exported goods totaling US$415 billion, while Venezuela cannot even find US$5 billion to pay its debts.
While the resource-rich countries are not benefitting from their natural endowments, those without are prospering. Why are the countries in Africa and Latin America not benefitting from their natural resources which is estimated to be in the hundreds of trillions of dollars compared to US$45 trillion for the US? Would the recent discovery of oil be a blessing or a curse for Guyana? Time will tell.
One of the reasons for the spectacular achievements of the Asian countries is due to their importing and manufacturing of raw materials. A second reason is the Asian countries realized that they were poor and had no choice but to work with what they had. Not only is it easier to find a needle in a haystack than to find illiterate persons in these countries, but their citizens are also highly trained. However, many underdeveloped countries have flirted with socialism which subsequently failed. And even though they are still struggling, their leaders have become instant millionaires and billionaires. Having resources seems to be a curse for these countries.
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