Rents, lootability and resource curse
Peak Oil and Security Rents, lootability and resource curse
Lecture 6, Anna Sundell 2011-02-04
Today’s lecture Resource abundance and conflict Resource curse or rentier peace? Peak oil and conflict Natural gas and conflict
Triggers of ‘Ecoviolence’ - two arguments
Honey pot
gr ee
d,
oil diamonds
loo
tin
g
Civil war cy n de
e c r u
Shrinking pie forests freshwater
o s e ,r
e c n
g
a v rie
n e p e d
A
D
ENVIRONMENTAL PEACE BUILDING
COOPERATION
ABUNDANCE
SCARCITY
B RESOURCE SCARCITY AND PROPERTY RIGHTS
IDEAL GOVERNANCE REGIMES
CONFLICT
C ALI (2009)
A
D
ENVIRONMENTAL PEACE BUILDING FEAR OF DEPLETION
AWARENESS
LACK OF TRUST BETWEEN USERS
RESOURCE SCARCITY AND PROPERTY RIGHTS
DIFFERENTIATED OPPORTUNITIES
GOVERNANCE
DISTRIBUTION OF BENEFITS
TECHNOLOGICAL CHANGE
SCARCITY
B
IDEAL GOVERNANCE REGIMES
COOPERATION
HEGEMONIC MOTIVES HIGH UNCERTAINTY OF FUTURE BENEFITS
ABUNDANCE
LOOTABILITY
SHADOW MARKET FOR LOOT
CONFLICT
C ALI (2009)
The resource curse theory
Real GDP Growth Per-capita
Growth and natural resource abundance 1970-1989 Countries 10,0 Singapore
7,5
Taiwan Hong Kong Mauritius
5,0
Botswana
Iceland
2,5 Algeria Nigeria
0 -2,5 -5,0
Iran Chad Niger
Nicaragua
Malaysia Fiji Mauritania Bahrain
Cote D’Ivoire
Saudi Arabia
Guyana Liberia Zambia
-7,5 -10,0
UAE
Kuwait
0
17,5
35,0 Exports of Natural Resources/GDP
52,5
70,0 Sachs and Warner, 2001
The resource curse theory Easy money from natural resources... Countries heavily dependent on incomes from natural resources...
Prone to slow economic growth High rates of powerty Authoritarian rule Corruption Violent conflict
The resource curse theory Easy money from natural resources...
help finance civil wars weaken state institutions
The resource curse theory Sachs and Warner: “Almost all resource abundant countries have stagnated in economic growth since the early 1970s” Influx of foreign capital appreciation of exchange rate decline in competitiveness in manufacturing sector - reduces export-led growth Also: Volatility of revenues from resource sector
Critique - resource curse Resource dependency more problematic than resource wealth Large revenues from resources can be used to maintain stability External security interests work for stability Reverse causality: Conflicts and bad politics create heavy dependence on natural resources Basedau/Lay: No evidence that oil rents lead to weak/ corrupt states. (Oil wealthy states tend to have better state institutions than their oil-poor counterparts.)
Rentier peace? Positive effect of resource abundance on political stability under authoritarian regimes The state distribute rents and get vital resources to spend on security/oppression Strong external support for resource-fuelled regimes Revenues buy off demands and opposition Clientelism keeps elite loyal
Critique - rentier state
Ross: The type and characteristics of the resource matters (e.g. onshore vs offshore oil, lootability) Ethnic and other cleavages have an influence
Causal Mechanisms Connecting Resources to Civil War Onset Working primarily through
Motive
Effect on peace-mechanism Fuelling war
Avoiding war
Greedy rebels
Large-scale distribution
Greedy outsiders Grievances Weak state
Selective co-optation
Sparse networks
Opportunity
Feasibility (rebel finance)
Repression (security app.)
Weak state
Outside protectors
Source: Basedau &Lay, 2009
Projections of energy dependency
But: World-wide demand of primary energy expected to rise by 57% 2004-2030 (Asia: 128%) (Klare 2008)
Projections of energy dependency
But: World-wide demand of primary energy expected to rise by 57% 2004-2030 (Asia: 128%) (Klare 2008)
Peak-oil Peak oil = maximum rate for global oil extraction is reached and production start to decline ‘Peak-discovery’ in the 60’s Only “tough oil” left (expensive and hazardous deposits) But resources are a fluid concept. Technology can create new resources (e.g. oil sands, oil shale)
Peak oil and conflict Interruption in global oil flows a security threat Many of the world’s leading sources of oil are located in contested border zones or in areas of recurring crisis and violence Petroleum must often travel (by ship or by pipeline) through other areas of instability Increased risk of both interstate and internal conflict
OPEC and the politics of oil
Political asset (producers) and vulnerability (importers) OPEC established 1960 as a response of price reductions made by oil companies (the seven sisters) Today: 40% of world’s oil
OPEC members
Algeria, Angola, Equador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Venecuela, UAE, Saudi Arabia
OPEC and the politics of oil 4 shocks on international oil market: 1974 Arab embargo on states supporting Israel 1979 Revolution in Iran + Iran-Iraq war 1991 Gulf war 2000 - Rapid acceleration of demand Economic growth in China (and India)
OPEC and the politics of oil Oil shocks point at changing economic and political interdependencies. Oil-dependent states modify their political allegiances to secure oil supply (e.g. Saudi Arabia, Sudan) Petrostates can continue repressive domestic politics without sanctions Oil as a weapon Oil as a target (e.g. Nigeria, Iraq)
Russia as an energy superpower Russia holds the world’s largest proven natural gas reserves, the 2nd-largest coal reserves and the 7thlargest oil reserves. Provides Western Europe with 25% of its needs (96% for Grece, 70% for Austria, 47% for Poland and 43% for Germany Dependency on natural gas expected to increase (due to cut-backs on coal and petroleum.
Russia as an energy superpower 1st of January 2006. Gazprom cuts off natural gas supply to Ukraine Ukraine cuts off pipelines continuing to Europe 1st of January 2007. Gazprom threat to cut off Georgia and Belarus from gas supply Proposed pipelines in Baltic Sea and East Siberia
Discuss! How do you think the energy issue will affect security in the future? Is there a solution to the energy crisis?
Seminar-instructions Read the articles in the reading list Choose another text (not necessarily academic) that relates to the topic oil and security and conflict Prepare a short presentation of your text (and why you find it interesting) to a small group Reflect upon the relation between oil and the different dimensions/levels of security in all the texts/articles and write personal notes to bring with you to the seminar.
Lecture 6, Anna Sundell 2011-02-04
Today’s lecture Resource abundance and conflict Resource curse or rentier peace? Peak oil and conflict Natural gas and conflict
Triggers of ‘Ecoviolence’ - two arguments
Honey pot
gr ee
d,
oil diamonds
loo
tin
g
Civil war cy n de
e c r u
Shrinking pie forests freshwater
o s e ,r
e c n
g
a v rie
n e p e d
A
D
ENVIRONMENTAL PEACE BUILDING
COOPERATION
ABUNDANCE
SCARCITY
B RESOURCE SCARCITY AND PROPERTY RIGHTS
IDEAL GOVERNANCE REGIMES
CONFLICT
C ALI (2009)
A
D
ENVIRONMENTAL PEACE BUILDING FEAR OF DEPLETION
AWARENESS
LACK OF TRUST BETWEEN USERS
RESOURCE SCARCITY AND PROPERTY RIGHTS
DIFFERENTIATED OPPORTUNITIES
GOVERNANCE
DISTRIBUTION OF BENEFITS
TECHNOLOGICAL CHANGE
SCARCITY
B
IDEAL GOVERNANCE REGIMES
COOPERATION
HEGEMONIC MOTIVES HIGH UNCERTAINTY OF FUTURE BENEFITS
ABUNDANCE
LOOTABILITY
SHADOW MARKET FOR LOOT
CONFLICT
C ALI (2009)
The resource curse theory
Real GDP Growth Per-capita
Growth and natural resource abundance 1970-1989 Countries 10,0 Singapore
7,5
Taiwan Hong Kong Mauritius
5,0
Botswana
Iceland
2,5 Algeria Nigeria
0 -2,5 -5,0
Iran Chad Niger
Nicaragua
Malaysia Fiji Mauritania Bahrain
Cote D’Ivoire
Saudi Arabia
Guyana Liberia Zambia
-7,5 -10,0
UAE
Kuwait
0
17,5
35,0 Exports of Natural Resources/GDP
52,5
70,0 Sachs and Warner, 2001
The resource curse theory Easy money from natural resources... Countries heavily dependent on incomes from natural resources...
Prone to slow economic growth High rates of powerty Authoritarian rule Corruption Violent conflict
The resource curse theory Easy money from natural resources...
help finance civil wars weaken state institutions
The resource curse theory Sachs and Warner: “Almost all resource abundant countries have stagnated in economic growth since the early 1970s” Influx of foreign capital appreciation of exchange rate decline in competitiveness in manufacturing sector - reduces export-led growth Also: Volatility of revenues from resource sector
Critique - resource curse Resource dependency more problematic than resource wealth Large revenues from resources can be used to maintain stability External security interests work for stability Reverse causality: Conflicts and bad politics create heavy dependence on natural resources Basedau/Lay: No evidence that oil rents lead to weak/ corrupt states. (Oil wealthy states tend to have better state institutions than their oil-poor counterparts.)
Rentier peace? Positive effect of resource abundance on political stability under authoritarian regimes The state distribute rents and get vital resources to spend on security/oppression Strong external support for resource-fuelled regimes Revenues buy off demands and opposition Clientelism keeps elite loyal
Critique - rentier state
Ross: The type and characteristics of the resource matters (e.g. onshore vs offshore oil, lootability) Ethnic and other cleavages have an influence
Causal Mechanisms Connecting Resources to Civil War Onset Working primarily through
Motive
Effect on peace-mechanism Fuelling war
Avoiding war
Greedy rebels
Large-scale distribution
Greedy outsiders Grievances Weak state
Selective co-optation
Sparse networks
Opportunity
Feasibility (rebel finance)
Repression (security app.)
Weak state
Outside protectors
Source: Basedau &Lay, 2009
Projections of energy dependency
But: World-wide demand of primary energy expected to rise by 57% 2004-2030 (Asia: 128%) (Klare 2008)
Projections of energy dependency
But: World-wide demand of primary energy expected to rise by 57% 2004-2030 (Asia: 128%) (Klare 2008)
Peak-oil Peak oil = maximum rate for global oil extraction is reached and production start to decline ‘Peak-discovery’ in the 60’s Only “tough oil” left (expensive and hazardous deposits) But resources are a fluid concept. Technology can create new resources (e.g. oil sands, oil shale)
Peak oil and conflict Interruption in global oil flows a security threat Many of the world’s leading sources of oil are located in contested border zones or in areas of recurring crisis and violence Petroleum must often travel (by ship or by pipeline) through other areas of instability Increased risk of both interstate and internal conflict
OPEC and the politics of oil
Political asset (producers) and vulnerability (importers) OPEC established 1960 as a response of price reductions made by oil companies (the seven sisters) Today: 40% of world’s oil
OPEC members
Algeria, Angola, Equador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Venecuela, UAE, Saudi Arabia
OPEC and the politics of oil 4 shocks on international oil market: 1974 Arab embargo on states supporting Israel 1979 Revolution in Iran + Iran-Iraq war 1991 Gulf war 2000 - Rapid acceleration of demand Economic growth in China (and India)
OPEC and the politics of oil Oil shocks point at changing economic and political interdependencies. Oil-dependent states modify their political allegiances to secure oil supply (e.g. Saudi Arabia, Sudan) Petrostates can continue repressive domestic politics without sanctions Oil as a weapon Oil as a target (e.g. Nigeria, Iraq)
Russia as an energy superpower Russia holds the world’s largest proven natural gas reserves, the 2nd-largest coal reserves and the 7thlargest oil reserves. Provides Western Europe with 25% of its needs (96% for Grece, 70% for Austria, 47% for Poland and 43% for Germany Dependency on natural gas expected to increase (due to cut-backs on coal and petroleum.
Russia as an energy superpower 1st of January 2006. Gazprom cuts off natural gas supply to Ukraine Ukraine cuts off pipelines continuing to Europe 1st of January 2007. Gazprom threat to cut off Georgia and Belarus from gas supply Proposed pipelines in Baltic Sea and East Siberia
Discuss! How do you think the energy issue will affect security in the future? Is there a solution to the energy crisis?
Seminar-instructions Read the articles in the reading list Choose another text (not necessarily academic) that relates to the topic oil and security and conflict Prepare a short presentation of your text (and why you find it interesting) to a small group Reflect upon the relation between oil and the different dimensions/levels of security in all the texts/articles and write personal notes to bring with you to the seminar.
