Is OIL a Resource Curse - Essay Example

Is OIL a Resource Curse? By 26 November Is OIL a Resource Curse? There are a lot one learns from “Is Oil a Resource Curse”. First, it is the aim of every nation in the world to have vast deposits of oil. This is because such countries think this will provide a solution to most of the problems and challenges that the economies face. However, finding oil in most of the nations happens to be the source of many problems. One of the challenges is heavy reliance on oil. Moreover, the resource creates only limited jobs and inflates exchange rates of the source country.

On the other hand, the resource gives the state more power at the expense of the population. This is because the citizens are unable to account on the spending of the money derived from exporting oil. Additionally, the resource leads to unprecedented rate of conflict. In fact, the wealth of resources in any country appears to correlate with conflict. This is because government relies on resources and delinks itself from people. This arises due to lack of accountability that could have been achieved by taxing.

However, such governments do not need to tax its people as oil generates enough resources to run the government. This makes the government unaccountable to its people. However, there are ways in which some of the government are solving the resource curse. This involves use of some of the resources generated to offer incentives to the citizens. Moreover, the money is also channelled to social welfare to cater for the aged and less privileged in the society. In addition, some governments have focused on ensuring there is accountability in the sector.

This takes place through offering information about the nation revenue and expenditure (Stapleton n.d). Additionally, other governments are in the process of developing legislation to address transparency in the oil sector. All these initiatives are believed to offer solutions to resource curse nations. ReferenceStapleton, L n.d, ‘Is OIL a Resource Curse?’