The Plundered Planet Podcast Series: Day 2
Michelle Rafferty, Publicity Assistant
Which is more important: saving the environment or fixing global poverty? Economist Paul Collier argues that we can find a middle ground and do both in his new book The Plundered Planet: Why We Must—and How We Can—Manage Nature for Global Prosperity. A former director of Development Research at the World Bank and author of the widely acclaimed and award winning The Bottom Billion, Collier’s The Plundered Planet continues his life mission of advocating for the world’s poorest billion people.
Collier made a quick stop in NYC recently and I was able to ask him a few questions about his new book. In Segment 2 he discusses why countries rich in natural assets are still in poverty—and what needs to be done about it. You can check out the rest of the series here.
Michelle Rafferty: So, why have the world’s poorest countries failed to develop, despite being so rich in natural resources?
Paul Collier: The big resource of the poorest countries is indeed their natural assests, and it’s going to become even bigger over the next decade or so. They’re the last frontier for discovery, and with high global commodity prices all those resources will be discovered.
Rafferty: Can you talk about some countries and what their resources are that are untapped?
Collier: Let me give you an example from one of the really bottom billion countries Afghanistan. I just saw an estimate last week that there are now believed to be two trillion dollars worth of natural assets underneath the soil of Afghanistan, and the Chinese have just done a deal with the government of Afghanistan for the exploitation of copper-several hundred billion dollars worth of copper exploitation. So that’s one example. Around West Africa there have been discoveries of oil, of iron, so these resources are now being discovered. There’s been, until recently, very little search and dicovery in the countries of the bottom billion. So, they’ve got to be found. The challenge is then to stop them from being plundered and why they’ve been plundered in the past? Because it’s been so easy to plunder. In order to extract the resources in the first place, most of these societies need foreign technologies, so foreign companies come in. The temptation for the foreign company is then to get permission to extract by doing a deal with a couple of powerful politicians, and they strike a deal which is good for the politicians, good for the company, and lousy for the country.
On top of that there is a huge imbalance in information. The company has a much clearer idea of what resources under the ground are really worth in a society, than the government. And that huge imbalance of information of course advantages the company. Even when the money flows into the government coffers then there’s another set of problems that if you’ve got a lot of corruption in the civil service, the money leaks out instead of reaching ordinary people. And then sometimes, the society is victim to populism. There are pressures to spend it on consumption now, rather than build the assets which can be handed on to the nation’s children. And so all the way along the line there have been pressures to plunder, and a major part of the book is going through that chain of decisions and seeing: how can plunder be avoided?