Commodity money that is easily earned can be more of a curse than a blessing, allowing autocratic regimes to stay in power while leading to more frequent wars. Countries like Iran and Russia illustrate this trend, with both using their wealth from natural resources to support destructive actions like firing rockets and launching invasions. Despite international sanctions and economic underdevelopment, the elite in these countries remain firmly in power, benefiting from the resource curse at the expense of the general population.
The resource curse, which affects many countries in Central Asia, the Middle East, and Africa, leads to a concentration of wealth among a small elite while the rest of the population suffers. This phenomenon is characterized by low economic growth, high income inequality, and a lack of investment in other sectors of the economy. Countries heavily dependent on natural resources often end up with repressive governments and increased military spending, as seen in Russia, Iran, and other resource-rich nations.
However, there are exceptions to the resource curse, as countries like Norway, Australia, Canada, Chile, and Botswana have managed to use their resource wealth for the benefit of the entire population. These countries have functioning democracies, strong institutions, and responsible investment practices that have allowed them to escape the pitfalls of the resource curse. By prioritizing economic development, transparency, and good governance, these nations have turned their resource wealth into a blessing rather than a curse.
The key to overcoming the resource curse lies in political reforms, strong institutions, and a commitment to inclusive growth. Countries like Russia, Iran, and others can learn from the success stories of nations that have effectively managed their resource wealth for the benefit of all citizens. By investing in education, healthcare, infrastructure, and other critical sectors, these countries can avoid the pitfalls of the resource curse and build a more prosperous and stable future for their people.