Understanding oil and mineral resources in a political economy context: the case of the Middle East and North Africa (MENA)

摘要

This study revisits a topic that was widely debated in the 1980s and 1990s—the resource curse. The study not only explores why oil and mineral revenues do not lead to economic growth, but attempts to explain why this phenomenon continues by proffering a political economy framework. There is empirical evidence presented on both the importance of oil and mineral exports/revenues for the Middle East and North African (MENA) region as well as trends in merchandise exports. The study demonstrates that after much emphasis on diversification through channeling oil and mineral revenues into other activities during the past decade the region remains dependent on these resources. The paper proffers four reasons of why this "resource curse" persists. These are corruption, lack of democracy, military spending, and foreign funds outflow which are common in oil- and mineral-dependent states and tend to lead to a negative growth in the MENA region. The timing of this study is important in the wake of the Arab Spring. The Gulf Cooperation Council policy makers spent $150 billion on salary raises, infrastructure, and social amenities in order to accommodate social pressures due to the internal unrest that many MENA countries are now experiencing and will continue to experience. This is in part because 65 % of their populations under the age of 30 continue to search for meaningful employment in socioeconomic systems that do not generate growth or jobs. The findings of this study also show that diversification without good governance does not lead to better growth in spite of resource abundance.