Meaning of resource curse | Babel Free

Definitions

A phenomenon in which nations or regions rich in natural resources tend to become politically unstable and/or economically stagnant.

uncountable

Examples

“As [Luke] Drago and [Rudolf] Laine note, Congo [the Democratic Republic of the Congo] is rich in natural resources. The nation holds substantial oil reserves and about $24 trillion in mineral wealth. Yet Congo is among the five poorest nations on the planet, with more than 70 percent of its people living on less than $2.15 per day. This dissonant combination of commodity wealth and mass poverty is not unusual. To the contrary, large resource endowments appear to correlate with slower economic growth and higher corruption — a phenomenon that economists and political scientists have dubbed “the resource curse.” […] The “resource curse” is a common trap. But it isn’t an inevitable one. Norway is an exceptionally oil-rich country, with fossil fuels generating a quarter of government revenues. Yet it is also among the most prosperous and equal nations on the planet. The Norwegians’ immunity from the resource curse has a simple explanation. By the time Norway discovered its major oil reserves in 1969, it had already established one of the world’s most egalitarian social orders. When processed through the nation’s social democratic institutions, the emergence of a vast new source of inanimate wealth didn’t yield windfall rents for plutocrats but rather a sovereign wealth fund that bankrolls generous pensions for ordinary Norwegians. If we can get our political economy in better shape, advanced AI could deliver similarly broad benefits to future Americans.”

CEFR level