Most of the people don’t realize that the abundance of natural resources can pose as an impediment rather than a blessing for a political economy.
Wikipedia.org defines one of the main adverse effects of the resource curse as provoking social conflicts: (bold highlights added)
Natural resources can, and often do, provoke conflicts within societies (Collier 2007), as different groups and factions fight for their share. Sometimes these emerge openly as separatist conflicts in regions where the resources are produced (such as in Angola's oil-rich Cabinda province) but often the conflicts occur in more hidden forms, such as fights between different government ministries or departments for access to budgetary allocations. This tends to erode governments' abilities to function effectively. There are several main types of relationships between natural resources and armed conflicts. First, resource curse effects can undermine the quality of governance and economic performances, thereby increasing the vulnerability of countries to conflicts (the 'resource curse' argument). Second, conflicts can occur over the control and exploitation of resources and the allocation of their revenues (the 'resource war' argument). Third, access to resource revenues by belligerents can prolong conflicts (the 'conflict resource' argument).
The continuing insurgency and violence in Mindanao has been a manifestation of such political pathology, although this can be argued as piggybacking on the religious schism brought upon by again the earlier political persecution of Muslims during the Marcos regime.
Today’s Bloomberg article has an apropos observation,
Mindanao is no stranger to murder, with a four-decade insurgency in which as many as 200,000 people have died, frustrating efforts by companies including Xstrata and Sumitomo Metal Mining Co. (5713) to tap an estimated $312 billion in mineral deposits. Death squads that human-rights groups have linked to police and the military, contract killings over land disputes, and al-Qaeda-affiliated terrorists add to the mix of violence.
While Philippine economic growth is accelerating, stocks are close to a record high and the country pursues its first investment-grade credit rating, failure to resolve the unrest and murders in Mindanao damages President Benigno Aquino’s efforts to further boost foreign investment, surveys show.
“There is no evidence of a strategic solution to the security problems in Mindanao,” said Steve Vickers, chief executive officer of Hong Kong-based Steve Vickers & Associates, a corporate-intelligence and security-consulting company. “Some of the activities are truly well-organized terrorism, but much of it is feudalism or out-and-out criminality, which needs to be stamped on hard.”
Business Cost
The Philippines ranked 130th of 142 countries in the World Economic Forum’s latest survey on the cost to business of terrorism; and 112th in terms of crime and violence -- the worst in Southeast Asia. Fifty-four percent of mining companies said issues such as attacks by terrorists, criminals and guerrilla groups are a strong deterrent for investors in the Philippines, the second highest among 93 jurisdictions in a Fraser Institute poll released in February.
The violence also exacerbates poverty, a Jan. 26 report by the foreign chambers of commerce in the country said. Sixty-five percent of respondents in Mindanao, home to about a quarter of the Philippines’ 100 million people, described themselves as poor, according to a May survey by Manila-based polling company Social Weather Stations. That was the highest among the three main regions in the country, and up from 39 percent in March 2010, before Aquino was elected.
I think that the causal link has been reversed; instead of violence exacerbating poverty, it is poverty through political distribution of resources (compounded by politically fueled religion based conflict) that has been exacerbating violence.
This represents another example of the failure of political solutions whose stealth objective has been to advance the interests of the political class and their favorite businesspeople through claims on these resources.
Yet violence, in truth, represents an attack against property, as the great professor Ludwig von Mises warned, (Socialism p.44-45)
All violence is aimed at the property of others. The person – life and health -is the object of attack only In so far as it hinders the acquisition of property. (Sadistic excesses, bloody deeds which are committed for the sake of cruelty and nothing else, are exceptional occurrences. To prevent them one does not require a whole legal system. To-day the doctor, not the judge, is regarded as their appropriate antagonist.) Thus it is no accident that it is precisely in the defence of property that Law reveals most clearly its character of peacemaker. In the two-fold system of protection accorded to having, in the distinction between ownership and possession, is seen most vividly the essence of the law as peacemaker - yes, peacemaker at any price. Possession is protected even though it is, as the jurists say, no title. Not only honest but dishonest possessors, even robbers and thieves, may cIaim protection for their possession.
This brings us to the most viable solution: protection of private property and the promotion of the division of labor, again Professor Mises, (Socialism page 374)
The desire for an increase of wealth can be satisfied through exchange, which is the only method possible in a capitalist economy, or by violence and petition as in a militarist society, where the strong acquire by force, the weak by petitioning. In the feudal society ownership of the strong endures only so long as they have the power to hold it; that of the weak is always precarious, for having been acquired by grace of the strong it is always dependent on them. The weak hold their property without legal protection. In a militarist society, therefore, there is nothing but power to hinder the strong from extending their wealth. They can go on enriching themselves as long as no stronger men oppose them.
Media, experts and politicians can fantasize about political solutions, when the market approach has barely been given a chance to succeed.
