viernes, 26 de junio de 2009

Can the Resource Curse Hypothesis Explain Regional Disparities?

Apparently it does, at least that's Ms. Li's explanation for regional disparities within China. In a nutshell she argues that the reason why the western regions of China are poorer is because they have been resource-reliant economies.

Although this fact might explain to certain degree why these regions are poorer, perhaps one should not forget that the richest regions of the east, that are not so well natural-resource endowed, have a much better location for when it comes to international trade, i.e. they are closer to the coast.

If we consider that we are living in the "ocean age", according to Liang Qichao's historical ages, in which trade is mainly maritime, maybe this locational fact is as or even more important for determining regional development disparities within a country than resource endowments.

domingo, 14 de junio de 2009

"In 10 years time Ghana will be a very prosperous nation"

According to Ghana's finance minister, Mr. Duffuor...

This is type of enthuiasm authorities in that country give to the recent discovery of offshore oil reserves. This type of optimism is further sustained when the minister argues:

"...We've seen what others that have found oil have gone through and we've looked at their mistakes..." (BBC, 3 June 2009)

One could argue that these type of bold arguments is what fuels the general public hope for a radical and sudden quality of life increase that will precisely play against any type of policy preventing Ghana to be another example of the resource curse. Better argue that in 2020 Ghana's development level will reach that of Nigeria or Côte d'Ivoire's, countries that are richer now than Ghana in terms of GDP per capita, so people will actually know what to wait of this oil discovery in the short run, i.e. almost nothing. That was the case of Norway when it discovered its oil fields in the 1960s. The main challenge the country faces now, if it really wants to be prosperous in the medium run, is not to loose its non oil export sectors. If oil exports increase so fast that they crowd out the rest of the exporting sectors, the long term growth perspectives in Ghana will be seriously endangered.

viernes, 12 de junio de 2009

Ghanaian Policymakers Beware of the Dutch Disease!

An excellent account, done by Nana Adjoa Hackman, on how to prevent Dutch Disease problems that can arise from the recent discovery of an offshore oil reserve of more than 3bn barrels in Ghana is available here.

Probably the most important reminder of the article is that the "...government would have to come up with proactive policies to promote industrialization and diversification to ensure that the local economy can obtain maximum benefit through backward and forward linkages with the new industry..."

Do you think that Ghana will be up to the challenge and join the list of resource curse escapers? My guess is that if Ms. Hackman's pledge is followed by Ghanaian policymakers, then the country has a chance.