POLICY INTERVENTION

Can Policy Intervention Beat the Resource Curse in Philippine Development Goals

Can Policy Intervention Beat the Resource Curse in Philippine Development Goals

Introduction

Any academic or policy literature examining how to transform resource wealth into genuine social and economic development is bound to encounter the buzz word: resource curse. This holds true for states with long histories of resource extraction, such as Chile, Bolivia, Peru, South Africa, and Zambia, as well as to those set to commence intensive extraction, for example in Brazil's rich offshore reserves, Tanzania's gold mining, or Sao Tome & Principe's oil. But the resource curse is also political. Natural resources exacerbate corruption, rent-seeking, and violent conflicts - stuff that convinced leading academics and global governance institutions to adopt a technocratic, depoliticized ideas of good governance (Di John, 2011). Most exemplary of this is the World Bank-led Extractive Industries Transparency Initiative (EITI).

This donor agency-led initiative calls for local accountability and transparency of state agencies. And following Chile and Norway, excess profits ought to be saved and invested in financial markets as sovereign wealth funds. The controversy surrounding the resource curse thesis is whether its key claims of political and economic effects are genuine concerns or over the question of are these arguments - which are based on the experience of Middle East autocracies in the 1970s -perceived and reified, and thereafter turned into self-fulfilling prophecy. Thus, my brief article aims to give a bird's eye view of resource extraction and a political deconstruction of the meanings and effects of the resource curse thesis.

Now that the problem has been stated and a context/background has been stablished, this discussion will proceed to present a brief but concrete analysis of the theoretical imperatives, followed by an elaboration of the Philippine position and a critique of Philippine Position. In addition, the discussion will present an international dimension of the study and a critique of the international intervention of the study. Finally, the discussion will come to a conclusion following the author's personal views on the subject of the role of policy intervention in beating the resource curse in Philippine development goals.

Discussion

The idea of resource curse did not exist until the 1990s. The apparent paradox was that countries endowed with natural resources have performed worse than those with scarce or no resources at all (Yang, 2010). As economists focussed on the relationship between resource wealth and economic growth, what became evident was that “resources have led to worse economic performance” (Tsui, 2010). As a way of affecting growth, a sudden increase in exports of minerals and hydrocarbons can shoot up exchange rates and negatively affect the competitiveness of the productive sectors - this is known as the Dutch disease effect. Political scientists, on the other hand, have been preoccupied with the ways resources - specifically oil - have influenced conflicts, patterns of decision making and democratic performance. At best, these arguments reflect rentier politics in the Middle East, which have been used to generalize the failures of achieving effective and inclusive governance in the ...