The curse of natural resources

Michael L. Ross, Professor of Political Science, Director of the Center for Southeast Asian Studies (with Ph.D. in Politics from Princeton University, 1966) is the author of the book Timber Booms and Institutional Breakdown in Southeast Asia that has become a tangible contribution to the studies of problems of this region and aroused considerable interest in the US and world scholarly circles. Dr. Ross is studying problems of countries with considerable natural resources.

Dr. Ross, in your book Timber Booms and Institutional Breakdown in Southeast Asia you were the first to trace the links between natural resources and democracy. What is the impact of such resources on the development of democracy?

“Undemocratic countries that are under a dictatorship and have rich oil deposits stand a lesser chance of becoming democracies. For example, countries in the Middle East with vast oil fields have long remained undemocratic, whereas other countries (Ukraine, for example) have turned to democracy.

“We don’t know how oil deposits are influencing new democracies like Russia or Nigeria, or partial democracies like Azerbaijan. Their governments are getting big profits from oil, and this helps them bribe their opponents and retain their posts, regardless of which politicians are in power. Other natural resources, even timber, don’t seem to have the kind of effect that oil does.”

Does this mean that large natural resources suppress democracy, as a rule?

“Yes. In such countries as the Philippines, Indonesia, and Malaysia large rainforests have helped politicians to deliberately dismantle government institutions. The rainforests served as the basis on which to appropriate huge sums by ruthlessly exploiting the forest. To make this possible, the government institutions meant to counteract such abuses and excessive exploitation were liquidated. Politicians had stimuli for dismantling such institutions instead of creating new ones, and ample natural resources were the reason.

“Likewise countries with large oil deposits are becoming less democratic. In such countries democracy can only mean expenses for the politicians, because it prevents them from using big government profits they way they choose. Big profits from the natural resources serve as political stimuli for weakening democracy, just as the possibility of concealing profits from the tax authorities does not encourage these politicians to carry out democratic reforms. They can only serve as stronger stimuli for curbing democratic governance and enhancing the authority of those in power.”

In other words, in a country rich in natural resources expanding democracy can become an ill-affordable luxury for those in power and can even cause them to lose their power?

“That’s right. Few countries with oil deposits have demonstrated a successful transfer from authoritarianism to democracy. Most of them were in Latin America — countries like Venezuela and Peru, although scientists still don’t understand what makes Latin America so diversified.”

Do you have an explanation?

“I think that the links between oil and authoritarianism are largely part of the curse of national resources. There is also proof that oil wealth considerably increases the risk of a civil war; there are many oil-producing countries in which there are conflicts now, such as Algeria, Nigeria, Congo, Colombia, East Timor, Sudan, and, of course, Iraq.”

So what we have is an apparent political model in which stimuli for the conduct of politicians can be traced?

“That’s right. Political leaders with access to oil rent can pay off those who seek democratic progress.”

Natural resources can therefore impede democratic progress, can’t they?

“Precisely, because they make it possible for dictators to remain in power. Dictatorships in countries with oil deposits are traditionally headed by leaders who remain in power for a long time.”

Does your model also provide for a nonlinear dependence between the accumulation of capital using natural resources and its impact on the life of the population in countries with ample resources?

“No, I think that natural resources do not have any regular influence on an increase in the capital owned by the population, although some countries wisely put received financial resources to good use, spending this money on the improvement of education. A number of countries in the Middle East with large oil deposits have succeeded in improving their educational systems.”

Dr. Ross, is there a direct connection between the level of corruption and the presence of national resources?

“A number of people believe that there is, but I’m skeptical. Corruption exists in many countries that are not rich in natural resources. It is very hard to answer this question because it is hard to assess corruption that way.”

Is it possible to say that the interrelation between democracy and natural resources is becoming increasingly topical?

“It is. An increasing number of countries are turning into democracies, but many countries with oil deposits remain authoritarian.”