“Although large deposits of key resources such as oil would beconsidered a blessing for the development prospects of a country, it oftenturns out to be a ‘resource cure” (Collier, 2008). It is clearly characterizedand explore that impoverished countries may fail to progress if they neglectother sectors which is also play a large number impact on economy of theresource rich countries.Stewart M. Patrick is a senior fellow at the Council on ForeignRelations and Director of the Program on International Institutions and Global Governance,argued about the natural resources curse on developing countries where the mainaspect of his title is to developing countries a fighting chance to ward offthe resource curse.
There are some relevant and irrelevant argument that matchwith Paul Collier of his study “the Natural Resource Trap”According to theCollier by “the effect of aid, natural resources are become source of foreignexchange in those societies where a low income country with abundant naturalresources is unlikely to be able to break into these market because the foreignexchange they generate is not sufficient valuable within the society” (Collier,2008). In the point of view it’s stated that aid can be a source which mighteffect on natural resource fall into curse in the resource rich country due to foreignexchange is generated by the aid donors. For example, since 2008, the Ugandangovernment has thrown a colossal amount of money at the oil and gas sector inthe hope that doing so might bring a greater measure of development to thepredominantly low-income nation.
However, the danger of relying onoften-volatile and finite resource have become clear that falling oil pricehave turned Uganda into of the most heavily indebted countries on the planet.The easy resourcerevenue generates staggering wealth that facilitates corruption and patronagenetworks (Stewart, 2012). I would not go to agree due to easy revenue may helpto increase economic development and patronage networks may depend on weakgovernorate within these state. They consolidate the power of entrenched elitesand regime supporters, sharping income inequality and stifling political reform(Stewart). Of course power makes change everything and it can impact everysector that may turn into inequality of income.
Collier and Stewartargued about the curse of natural resource and there are some common thingsthat found, it is like this kind of natural resource makes result of the worstdevelopment outcomes where poverty, inequality and deprivation are often foundin those countries with the greatest natural resources endowment. There is acommon example deliberate of both writers are which is delivered from Stewartlike “One culprit may be theso-called “Dutch disease,” whereby resource revenues raise acountry’s exchange rate, hurting competitiveness in non-resource sectors”(Stewart, 2012)They both are also agreedanother thing like about the volatility that associated with commodity prices,which can have especially negative impacts on weak-state economic, and the underdevelopmentof agricultural and manufacturing sectors during boom periods in resource-basedeconomic.I would like to add aview from novel laureate “It might seem odd that having more money wouldnot help a poor country. Yet economists have long observed that countries thathave an abundance of wealth from natural resources, like oil or diamonds, tendto be more unequal, less developed and more impoverished.
Economists postulatethat this “natural resource curse” happens for a variety of reasons, but one isthat such wealth can strengthen and corrupt a government” (Deaton, 2013).