There are many ways of making money. One of them is rigging the system in your own favor. The son of Equatorial Guinea’s ruler has perfected the approach in his own back yard.
…the president’s son and agriculture minister has transferred at least $73m (£44m)into America to pay for a $35m Malibu mansion and private jet. Teodoro Obiang Nguema junior is said to have imposed a tax on timber payable not to the national treasury but directly to him.
Oil has certainly fueled economic growth in the country and in GDP per capita terms the country is one of the richest in the world (more than $30,000 according to the World Bank which is higher than Spain, Italy, Greece, South Korea and others.)
But, how do you contrast this income with extreme poverty on the ground – where 60% of the population is estimated to be living on less than $1 per day and half don’t even have access to clean drinking water? Where does all the money go?
Countries like Equatorial Guinea may want to replicate the Norwegian model. But they lack one thing that is key to Norway’s effective management of natural resources for the benefit of all segments of the population. That thing is democratic governance. Without it – resource curse is not an abstract concept, its a somber reality for too many of the average citizens.
Published Date: December 04, 2009