June 26, 2000
The
World Bank's
Resource Grab
Diamonds don't kill people,
People kill people
SHOCK
– SOMETHING SERIOUS FROM THE WORLD BANK
The
World Bank is not often
seen as, well, a serious player. This is compounded in certain parts
of London by an unfortunate allocation of the name in "rhyming slang",
on which I refuse to elaborate. However, they have finally come
up with something worth reading, a report "Economic
Causes of Civil Conflict and their Implications for Policy."
The basic premise is natural resources cause civil wars. There are
many other things that cause civil wars, large diasporas, dominant
ethnic groups, lack of economic aid. In the end however, natural
resources that are the real curse, and guess what the solution is;
we should control the resources for the Third World.
THE
CURSE OF RICHES
The
idea is simple. Natural resources like diamonds
and cocaine (also coffee – but I think they are including this
to make up the numbers) are easy to sell and offer fantastic profits.
Unlike manufacturers or services, they are hard or impossible to
move to a more beneficial business climate. The solution to this
curse is simple, a global regulation of these businesses, with the
responsible and government friendly big companies running the show.
WHAT'S
YOUR SHOE SIZE?
Do
you know what a big shoe size means? As you have probably guessed
by now, at least among children the size of your foot has a very
strong correlation to the neatness of your handwriting. When this
was first found out this caused a stir, as it seemed to show a weird
genetic disposition to neat handwriting. The problem with these
results is that they did not take account of age. An eight year
old is not only going to have smaller feet, but messier handwriting
than a fourteen year old. The mistake was not the collection of
this data but the interpretation. By not segregating the results
by age, a correlation was seen that did not exist. Could this be
happening again – but with deadlier consequences?
LIES,
DAMN LIES....
The
report heavily relies on statistical analysis. The author, Paul
Collier, drags out a large amount of statistics, many of which appear
compelling. For example, a country with 45% of children in school
has a 14% chance of conflict, while a country with 55% has a 10%
chance. So the answer is putting children in school? Well, not quite.
Wars do two things; firstly, they take you men out of the farms,
factories and mines. Who takes their place? Secondly particularly
in civil wars, armies recruit school age children. There seems to
be a fundamental confusion of cause and effect.
ON
CAUSE AND EFFECT
Other
statistics are popular. A large diaspora ferments war. Alternatively,
does a nasty civil war or brutal dictatorship produce a larger refugee
population? Sensible economic policies reduce unrest. However, when
recovering from a civil war with two large armed groups of young
men, the last thing you do is impose austerity and close
the chance of a civilian job in the near future. Moreover, which
countries go back to war, one's escaping from it? In this case the
proposed preventative treatment could directly lead to a relapse.
To be fair they do point out that a country that has been in a civil
war in the last five years has a 50% chance of relapsing.
This makes a far bigger difference than any discussion on schooling
and foreign aid. In fact it skews the whole picture, something the
authors seem to ignore. If the countries were segregated at all
times between those, which had suffered civil war and those that
did not then this would be a serious piece of work rather than a
confusion of input and results. If the publicity – which is
all that most policy makers will read – pointed out this central
50%, then the report would seem less like propaganda. Unfortunately,
it was not to be.
FALLACY
CENTRAL
The
biggest fallacy is that those countries dependent on natural resources
are most susceptible to civil wars. If the conclusion were that
those countries without significant manufacturing or service
sectors were more prone to civil wars, then this would suggest the
deeper cause. Natural resources cannot move. Multinationals, capital
and skilled workers can. So where there is a war they do.
You cannot choose where to mine diamonds, but you can choose where
to build a new car plant or base a fund manager. Therefore, the
reliance on natural resources is not a cause of civil wars, but
a result of them.
FALSE
REMEDY
The
remedy on this "over-reliance" is a massive increase in international
governance over the sale of natural resources, and a reduction in
national sovereignty. The report proposes the following five remedies:
- Diversify
the economy away from dependence upon primary commodities.
Read;
let us decide your economic policies.
- Secondly,
make looting rebels unpopular by transparently using the revenue
from primary commodity exports to fund effective basic services
such as primary education and rural health clinics.
Let
us decide how you spend your money.
- Third,
enlisting the international community to make it more difficult
for rebel groups to sell diamonds and other commodities which
they loot.
Let
us decide to whom you sell.
- Fourth,
generate rapid growth to counter the effects of low income and
economic decline.
I
said, let us decide your economic policies.
- Fifth,
provide credible guarantees to protect minorities in societies
where a single ethnic group dominates by entrenching their rights
into a national constitution.
Now
that you have let us play with your economy, let us decide your
political arrangements.
This
is a rationale for a new imperialism, which can be sold on the most
humanitarian grounds. While it was clear that the Gulf War was about
Western control of oil, all future wars over resources can be justified
because it is for the people. Who can be callous enough to
argue against that?
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