UNTAPPED
Lee interviewed John , the author of where he talks about... what else, oil in Africa. Hat tip to My post about these book is still sitting somewhere in my draft folder. I hope this will suffice. That’s a fair point, you’re right I do kind of go on about that. The industry gets excited because we’re talking about offshore deep water and ultra-deep water oil. You’re talking about thousands of feet below sea level; oil thats a
good hundred miles offshore sometimes. The reason they like that, if you’re
familiar with Nigeria, when you drill offshore you don’t have to deal with angry
villagers and militants and so forth disrupting what you’re doing. So, the
industry likes that. However, as I try to argue, this is a little bit of a deceptive story. What does happen even in the offshore situation is you get all kinds of economic and political problems on a macro scale. You have the Dutch Disease, which economists like to talk about, where the country’s currency appreciates and it becomes impossible to diversify the economy. You also have the rentier trap, which is basically where the country becomes a sort of landlord, gets lazy and sits there collecting oil money.
If you have a poor struggling African country with very little capacity and very immature institutions, and you throw very large amounts of dollars into that country
overnight…it’s going to create problems. It’s not going to make things better.
It’s actually not rocket science. If you have a poor struggling African country with very little capacity and very immature institutions, and you throw very large amounts of dollars into that country overnight…it’s going to create
problems. It’s not going to make things better. That’s the ‘curse of oil‘ that
people talk about.
3 Comment(s):
About time someone mentionned that offshore drilling has its set of issues. The biggest one of them being that while it doesn't directly create negative disruptions on the local environment, it doesn't create any positive ones either. You don't need to devellop build roads, pipelines, you don't need to hire local construction workers to build your plants, all you need is at best a port (and usually the oil terminals are separated) and some maintenance stuff.
And offshore drilling is also the weak spot of the free-marketer/libertarian approach to ressources ownership. No private entity owns that land. Any revenue flow/transfer/payment will be based on sovereignity claims.
And sovereignity claims is central to the various conflicts within countries in the region.. Not to mention the potential for conflict between the countries (cameroon vs nigeria, gabon vs equatorial guinea, nigeria vs sao tome, congo vs angola)
(i like the new comment system)
Oooops my bad...was just testing out the comment system..Thanks anyway.
Ah ! that was a glitch and not a feature ?
Well, i like it better than the blogger thing.