Dominica's "Resource Curse"

I recently posted about my disappointment of the government of Dominica to accepting to build an oil refinery for Venezuela. It is hard to get steady news streams from Dominica but there are a few people who are keeping information abreast of what is happening on the island. Check out Dominican View, Living Dominica or Dominica Oil to get some snapshots of what has been happening, but unfortunately there is no good single outlet of information. But that’s what makes if fun!

Recently I stumbled upon an article in Newsweek that talks about the "resource curse" associated with oil and other valuable commodities like diamonds or gold. This is a discussion that I have had several times with my friend Bob, who is working in the industry over in Azerbaijan and has seen the effects of this first hand. It is hard, for an outsider, to understand the bizarre and often backward thinking of countries with VAST amounts of reserves of commodities (mostly oil). For some reason, these countries seem to routinely have poorly run governments that are incapable of investing in the long-term good of the country, instead a select few line their pockets with plush funds. Nigeria is probably the best example of this, but the list seems to never end.

Unfortunately, monetary policy of countries is governed by the principal that to be 'developed' one must strive to meet certain 'standards' that are based on monetary derived figures like GDP, per capita income, etc. If you do not meet these standards (coincidently defined by western cultures and ideals) you are considered 'poor,' 'underdeveloped' or '3rd World.' This leads countries to develop shady and unsustainable economic policies (loans from bigger 'prosperous' countries) to bring their countries into the 'developed.' The most common result is the upward mobility of a select few and general population that is worse off than when they were '3rd world' and the country in complete shambles.

So how does this all link to Dominica and the proposed refinery? Dominica does not have a supply of oil, gas, diamonds, or gold in which it can tap into for funds for which to "develop" the country. But Dominica does have a HUGE resource of something that is scarce in today’s hustle and bustle...Great people and Great natural beauty. Unfortunately Dominica has been labeled a "developing" country and the government is trying desperately to provide for its people, which deserve major kudos. BUT, just like the governments of other resource rich countries, Dominica is squandering its resources, in this case its natural beauty, to provide a quick fix and inject money into the economy. The reason why people come to Dominica is because of its friendly people, towering peaks and its lush, never-ending forests. The sustainable eco-tourism business on Dominica can work, but like many other countries before it, Dominica seems to be leaning towards policies that seem good in the short run, but will cost it dearly in the end. Therefore Dominica too, is cursed by having such a wonderful and plentiful resources that will most likely (but hopefully not) be squandered away because of a few bad choices at the hands of political figureheads...i.e. Skerrit and Chavez.