Why do some countries stay poor despite having abundant natural resources?

[Fragrance1122]

Abundant natural resources is enough to liberate a country out of poverty if the money gotten for the natural resources are channel into developing the country. But if a country stay poor despite having abundant resources that means the country has corrupt, wicked, and selfish leaders who are using what is meant for the country for their personal gain.

Exactly! The underdeveloped nations are facing such problems. Our respectable chief minister recently bought a private jet of about 40 million dollars. While an ordinary man is still worried about how to survive till next meal. That's totally ashame.

[EFS]

Hasn't this already been discussed in plenty of other threads? There's really no way around it. Throughout history people have come together to form communities, as those communities grew they needed people to lead them. That's how a ruling class emerged. Apply the same idea to the modern state. Once those communities became states, the people in charge ended up holding enormous power. They get to decide how a country's natural resources are used and there's a lot of money tied to those decisions. That's why corruption will never disappear. One group leaves, another takes its place, but the system stays the same. If a country remains poor despite its rich natural resources, the reason lies with its ruling class.

[AmoreJaz]

Hasn't this already been discussed in plenty of other threads? There's really no way around it. Throughout history people have come together to form communities, as those communities grew they needed people to lead them. That's how a ruling class emerged. Apply the same idea to the modern state. Once those communities became states, the people in charge ended up holding enormous power. They get to decide how a country's natural resources are used and there's a lot of money tied to those decisions. That's why corruption will never disappear. One group leaves, another takes its place, but the system stays the same. If a country remains poor despite its rich natural resources, the reason lies with its ruling class.

I believe the bottomline here is that how the country will improve its economical aspect is owed to the leaders governing it. A perfect example is Singapore. Their resources are very limited and yet they are progressive country. It means, a country with abundant resources can be advanced depending on their government leaders. But mostly, the reason of slow progress is owed to rampant corruption. And that I believe, a lot of officials are guilty of.

[sunsilk]

Exactly! The underdeveloped nations are facing such problems. Our respectable chief minister recently bought a private jet of about 40 million dollars. While an ordinary man is still worried about how to survive till next meal. That's totally ashame.

That's a shame, isn't there a body of the government there that monitors the unexplainable wealth acquired by the high officials?

Because having that jet when there are a lot of hungry stomachs is such a very sensitive matter and keeps ignoring the masses.

We know how much these officials earn and yet, they're amassing wealth from the government as they sit.

[Bitcoin.com97]

Having a bad governance is the worst thing to ever happen to a country, because the country suffers alot from it ,and it will be hard for such country to prosper,that is why some countries only a set of people are rich and the riches continue in their families while the poor masses keep on suffering, corruption has also taken the order of the day ,with such how do you want people to grow ,when wealth is only accumulated by some set of people,even after having abundance of natural resources,they will definitely encounter poverty in such countries.

[Fragrance1122]

Exactly! The underdeveloped nations are facing such problems. Our respectable chief minister recently bought a private jet of about 40 million dollars. While an ordinary man is still worried about how to survive till next meal. That's totally ashame.

That's a shame, isn't there a body of the government there that monitors the unexplainable wealth acquired by the high officials?

Because having that jet when there are a lot of hungry stomachs is such a very sensitive matter and keeps ignoring the masses.

We know how much these officials earn and yet, they're amassing wealth from the government as they sit.

I literally mean that. Search it and you will know which chief minister bought a private jet. Two years ago people sent charities in here for flood affected people which were also in millions but none of them got any of that because of snakes setting over there heads. That's reality brother. They just announces good news for the people of our country on social media but the output is still zero. Everyone knows that action speaks louder than words.

[fruktik]

If only good leaders who have love and vision for the country would be elected, I believe that the country will have a stable government. Also, any person that steals public funds without carrying out the project assigned to him should be put to jail as a warning to the others in order for them not to embrace corruption.

Down here in my country, it's worse because only some few set of people are stealing and taking loans from other countries for their own benefit. Corruption destroys gradually.

Every nation deserves its leader. They are a reflection of society as a whole. If the president is corrupt and a thief, then the people themselves are guilty of the same. Therefore, it turns out that conclusions must be drawn based on the "most important" factors in the country.

Furthermore, if a president remains in office for many years, they begin to control all budget funds and use them as they see fit.

[suzanne5223]

Abundant natural resources is enough to liberate a country out of poverty if the money gotten for the natural resources are channel into developing the country. But if a country stay poor despite having abundant resources that means the country has corrupt, wicked, and selfish leaders who are using what is meant for the country for their personal gain.

If you're talking about African countries. Yes nd no, because it means the country is never governed using the constitution that will make the citizens benefit from their country's natural resources, or the country is still colonized using the modern strategetic way, which result into the slave master mining and taking most of the country's resources.
The mjor problem is not the leder but the god father that the power to control the president.

[LastKiss]

Corruption:
Resource money goes to politicians and elites, not to schools, hospitals, or roads. Secret deals with contractors are common.

~snip~

My country has lots of natural resources but some factors have caused its development to far behind compare other countries with fewer resources. One of the biggest factors as you mentioned is corruption, it's significantly slows the country progress to develop because the budget that should be used to improve society lives are often misused. In many cases, some officials just thinking how to recovering the money they spent to gain their position instead of serving the public.

When I compare my country with other countries that have limited natural resources the first thing I notice is the difference in corruption rating. Another issue is that many capable individuals in my country are not given the recognition or opportunities they deserve as a result, many of them choose to pursue better opportunities abroad. It's why having a responsible government is so important even a country with abundant natural resources cannot reach its full potential if those resources are poorly managed.

[Mpamaegbu]

Corruption and poor economic management of natural and human resources are the three major reasons why well endowed countries with natural resources still remain poor. This situation is common in the Africa and Asia continents where political leadership is bereft of ideas. Nothing else explains it better. My country is an example of this. With her numerous natural resources in crude oil, bitumen, coal, gas, limestone, lead and zinc, just to mention a few, Nigeria is still categorized as a poor country. In the actual sense, the country isn't poor; it's just that it's poorly managed by her political leadership. So, it's with many other countries.

[viljy]

Every nation deserves its leader. They are a reflection of society as a whole. If the president is corrupt and a thief, then the people themselves are guilty of the same. Therefore, it turns out that conclusions must be drawn based on the "most important" factors in the country.

Furthermore, if a president remains in office for many years, they begin to control all budget funds and use them as they see fit.

It's not that simple. Your "the people deserve it" formula only applies to countries with democratic elections. If the elections in a country are only superficially democratic but actually fake, how can the people influence the ruler at all? It's essentially a monarchy, not a democracy.

[goldkingcoiner]

From your topic. It's simple. Neocolonialism. colonisers never left. They just wore a different gown. Other factors might contribute. But the first and foremost of them all is Neocolonialism. Quote me if I am wrong.

You're wrong.

Obviously other countries will exploit weaker countries but this has always been the case. That is no reason as to why a country stays poor. The reason why a country stays poor is bad leadership that does not care about providing education, healthcare or infrastructure for their people. If leadership wanted to, they could disassamble any colonial structures which act as parasitic organisms.

Where do these leaders come from?

If you have ignorant, irresponsible and low intellect people, you will get ignorant, irresponsible and low intellect leaders.

[Outhue]

From your topic. It's simple. Neocolonialism. colonisers never left. They just wore a different gown. Other factors might contribute. But the first and foremost of them all is Neocolonialism. Quote me if I am wrong.

These colonisers are the same people in the country, not some foreigners coming into the country to colonize them, it's always their own people selling themselves out, this is what my fellow country people failed to understand, they put blame on the British for the slavery trade and when I went deep into research I found out that those British people are buying from black leaders.

Even in the United states, white people are selling themselves in slave trades too, it was everywhere but today they are still pointing hands because they have no clue and also they are looking for who to blame as to why they are doing bad things today to make money, ok, slave trades are over then why is slave in another form still a thing in a country where foreigners are no more leading? That's the answer right there, it was never the foreign colonizers, it was the people who betrayed and keep selling themselves.

[bakasabo]

That is how some European countries are doing. For example farmers export "raw" milk to country that has factory that processes milk to European standards. Later they get this milk imported for a much higher price. Why cant that country create clean "standard" milk themselves? Because 1) they dont have funds for that 2) they are not allowed to do that because their hands are tightened by contracts, obligations and loans with other countries. Whole situation is a huge absurd when you sell your milk for 20 euro cents per liter and in few days buy your own milk back for +1 euro.

I don't agree with (Because 1) - No country is poor not to be able to afford at least 2-3 major refineries in their states, what are purpose of taking loans, loans are supposed to go into economic sectors and development, how to know a good government is one who isn't afraid of leading the country to stand on her own, take for example, Burkina Faso under the new government are beginning to cut ties with the French government.

In years to come with the same government, Burkina Faso are going to be developed than other African countries.

You may not agree but that is situation in Europe. Countries have different resources, territory, laws. I cant explain why, but for some reason and for some goods Poland is sort of a hub. Resources get to Poland, its factories turn products match EU standards, then Poland import those goods back. Why cant each country build their own refineries? I dont know. And why should they if there is Poland already?   

As you have mentioned Burkina Faso - I you sure that all infrastructure that is being built there belongs to them? Or they belong to other countries who invested? Or Burkina Faso took loans to build?

[DrBeer]

This problem has been known for a long time.
Simply having resources doesn’t guarantee you anything. You could just end up as a raw materials appendage.
Having critically important, expensive, and easily extractable resources is already better. But what happens next depends on how wisely the government invests that money in the country… or in itself, if the government is corrupt.
The ideal scenario is to have resources and produce finished products with high added value. To put it simply: how much does a metric ton of "raw" silicon cost? And how much does a single processor,which contains just a couple of grams of silicon, cost? How much does a railcarload of lumber cost? And how much does a 500-kilogram furniture set made from that wood cost? But in order to build an economy with high added value, you have to invest money in the economy and its development...

[Porfirii]

This problem has been known for a long time.
Simply having resources doesn’t guarantee you anything. You could just end up as a raw materials appendage.
Having critically important, expensive, and easily extractable resources is already better. But what happens next depends on how wisely the government invests that money in the country… or in itself, if the government is corrupt.
The ideal scenario is to have resources and produce finished products with high added value. To put it simply: how much does a metric ton of "raw" silicon cost? And how much does a single processor,which contains just a couple of grams of silicon, cost? How much does a railcarload of lumber cost? And how much does a 500-kilogram furniture set made from that wood cost? But in order to build an economy with high added value, you have to invest money in the economy and its development...

It is the clear example that we have been seeing throughout much of the last century with the United States, which imported cheap raw materials to transform them and sell them with high added value throughout the world, including the countries from which it had imported these materials.

I think that in the case of crude oil the case is more complicated, and geopolitics enters so fully that the location of the refineries is not such a key factor, although it must undoubtedly have its importance. It is a sector that I do not know very well, and if someone can share some more knowledge on the subject beyond what is heard in the news I would appreciate it, so we all learn.

[CryptopreneurBrainboss]

WHAT THINGS ARE NEEDED TO TURN NATURAL RESOURCES INTO PROSPERITY IN YOUR POINT OF VIEW ?

It all boils down to corrupt government, without corruption the resources would have been managed properly and then development would have become the sole purpose of the government in the country. But this is unlikely to happen because there are few elites profiting from the corruption so it becomes difficult to fight corruption in such a country and then the natural resources goes to waste. A popular example is Nigeria and also you can see that in most country in Africa, the leaders divert the money gotten from resources being sold and then they use it for their personal use instead of the interest of the country. There isn't any development in the country as no industry have been created so as to employ the youth or education being given priority so as to make everyone vibrant instead they prefer to keep them in an uneducated (poverty) state so as to avoid rebelling.

[sunsilk]

That's a shame, isn't there a body of the government there that monitors the unexplainable wealth acquired by the high officials?

Because having that jet when there are a lot of hungry stomachs is such a very sensitive matter and keeps ignoring the masses.

We know how much these officials earn and yet, they're amassing wealth from the government as they sit.

I literally mean that. Search it and you will know which chief minister bought a private jet. Two years ago people sent charities in here for flood affected people which were also in millions but none of them got any of that because of snakes setting over there heads. That's reality brother. They just announces good news for the people of our country on social media but the output is still zero. Everyone knows that action speaks louder than words.

A very sad reality that these officials found way of living through the help and aide of other people and maybe other countries as well for the rescue with the natural disaster that has come to you.

I think people these days are no longer fools with what these officials does to the fund that's given to them as help to the people.

What belongs to the people must be given to the people and not to the officials, they shouldn't put it into their pockets.

[slapper]

I cannot agree with the idea at all. Japan practically has nothing. There was no oil, no copper, no diamonds! South Korea, same. Singapore is a small, moist island with no natural resources, and within one generation, has become one of the richest countries in the world. Taiwan, similar. And meanwhile the countries absolutely drowning in extractable wealth (Venezuela, DRC, Nigeria, etc) are the ones we are asking this question about. If you do not have anything in the ground you need to invest in what is walking around on top of it.

Your list of problems is accurate. Corruption, reliance on a single resource, poor investment climate. All real. However, these symptoms are merely superficial. Go upstream and you find the actual current: concentrated wealth calcifies into concentrated power. And power, once it calcifies, has no reason to spread capability around. Self-sufficiency is what makes a people ungovernable by permission. Power has no incentive to create the distributed capability that could threaten it. That is the one thing the whole structure exists to prevent. Recognize the difference: Theft can be caught red-handed. A broad daylight defence of inheritance requires no alibis. The men at the top did not have to violate a single law. Each clause of the law was drafted by them in their own hand.

So what is needed? A society has to choose. Bet on the complexity of its own people, or settle for the simplicity of whatever's buried underground. One choice takes something close to irrational faith. The other just takes a shovel. Education beyond the job market, education as identity formation. Institutions as shared ownership, not as control.

[DrBeer]

This problem has been known for a long time.
Simply having resources doesn’t guarantee you anything. You could just end up as a raw materials appendage.
Having critically important, expensive, and easily extractable resources is already better. But what happens next depends on how wisely the government invests that money in the country… or in itself, if the government is corrupt.
The ideal scenario is to have resources and produce finished products with high added value. To put it simply: how much does a metric ton of "raw" silicon cost? And how much does a single processor,which contains just a couple of grams of silicon, cost? How much does a railcarload of lumber cost? And how much does a 500-kilogram furniture set made from that wood cost? But in order to build an economy with high added value, you have to invest money in the economy and its development...

It is the clear example that we have been seeing throughout much of the last century with the United States, which imported cheap raw materials to transform them and sell them with high added value throughout the world, including the countries from which it had imported these materials.

I think that in the case of crude oil the case is more complicated, and geopolitics enters so fully that the location of the refineries is not such a key factor, although it must undoubtedly have its importance. It is a sector that I do not know very well, and if someone can share some more knowledge on the subject beyond what is heard in the news I would appreciate it, so we all learn.

That’s what ALL developed countries do. But simply importing cheap raw materials isn’t the solution to the problem; you need the technology and production capacity to turn cheap raw materials into high-value products. And high-value products made from cheap raw materials mean taxes, investments, and higher wages.

Crude oil is, in a sense, a “unique product in high demand,” so it’s profitable to sell it as a raw material. Moreover, most countries have built their own oil refineries to produce gasoline, diesel fuel, lubricants, and other products, which are then sold on the domestic market or partially exported.