Oil & Poverty
In 1995, two Harvard development economists, Jefferey Sachs and Andrew Warner, produced a paper that suggested that the more dependent on the export of natural resources a country was, the worse its economy would perform. They called the phenomenon, the Resource Curse. Further research indicated that the problem appeared particularly acute for countries primarily dependent on oil exports.
PLATFORM's work in this area has focused on the UK's Department for International Development (DFID) and its support for oil projects in developing countries. In 2005, PLATFORM Research produced Pumping Poverty, a report that detailed DFID's role in these projects and questioned the benefit that this support has brought to the poor in those countries. The assistance that DFID has given to these projects appears to benefit the UK's biggest oil corporations rather than the poor.
The impacts of the Oil Curse occur at the local, national, regional and global level. At all these levels it is the poor that bear the heaviest burden. These impacts include:
- At a local level, oil production damages people’s livelihoods and health – through direct pollution, by threatening food production and water supplies, and through the spread of disease.
- At a national level, there is a growing consensus among economists that the disruptive economic effects of oil investment act to drastically reduce growth and undermine the non-oil economy, as well as often leading to declining governance structures and a weakening of democracy.
- At a regional level, oil is frequently associated with greater militarization and conflict –through disputes over the control and ownership of resources, through the use of revenues to purchase arms, and through the targeting of oil infrastructure by terrorists and other armed groups.
- At a global level, fossil fuels are the primary cause of climate change, which threatens catastrophic damages including massive sea-level rise, rising incidences of flood, drought and other extreme events, major water and food supply reductions, and the spread of disease.
These impacts undermine the poverty alleviation goals of development aid.
Following the release of Pumping Poverty, our partners in Plan B launched a camapign to end UK development aid for oil.