Comment by logicx24 | Hacker News Reader

Comment by logicx24 | Hacker News Reader

This is a problem of poor infrastructure and corruption. Many of these resource-rich countries are politically unstable and lack the infrastructure to attract legitimate foreign investment. The regulatory framework is also broken, making it nearly impossible for new entrants to legally participate in the industry.

A dysfunctional legal market leads black markets to flourish, as miners need some way to sell their goods, and traders want to profit exporting the gold to foreign countries. This leads to extralegal organizations, like criminal syndicates and mafias, forming to protect illegal producers and connect them to external markets.

And so, to fix this, African countries need to not only crack down on illegal exports but also make it easier for legal entities to enter the industry. The government needs to provide a safe business environment for legal producers. That will cause illegal producers to naturally decline, as efficient legal production will lower costs.

Of course, this is easier said than done. Structural reform of corrupt kleptocracies is incredibly difficult. But without top-down reform, restricting illegal exports will accomplish very little beyond worsening poverty.

>> Many of these resource-rich countries are politically unstable and lack the infrastructure to attract legitimate foreign investment

This is by design.

This reads as a 'ahistorical' interpretation of events. Is is possible to engage in informed discussion without context?

How many centuries did it take for the transition from feudalism in Europe yet there is this kind of 'magical thinking' when it comes to Africa emerging from centuries of rapacious colonialism and are often independent states for just 50 years to somehow be the mirror image of western states rightaway. How does this work? Without explaining this no discussion on Africa can be serious and sincere.

And ignorance of the incentives for corruption and the history of plunder in these regions by supporting 'strongmen' and opposing forces of empowerment that continues unabated. And this can be easily confirmed by historical record. How come people like Lula and Chavez are demonized with very little to no dissent in the west and their governments destabilized openly when its them who empowered large number of their populations with social policies rather than just supporting a funnel of extraction by western capitalism. How do institutions and democracy emerge in this environment?

Perhaps its best not to have these discussion where simplistic 'explanations' perpetuate a culture of misinformation and prejudice and where the depth to understand the forces at work and historical events is completely absent.

>This is a problem of poor infrastructure and corruption. Many of these resource-rich countries are politically unstable and lack the infrastructure to attract legitimate foreign investment. The regulatory framework is also broken, making it nearly impossible for new entrants to legally participate in the industry.

I often see this sentiment about African nations but I almost never see thought beyond this into the root causes. If the speaker is being charitable to the subject, it's simply accepted as the way things are. If they aren't, it veers into a justification of Western superiority or African inferiority (two sides of the same coin).

Here is a simplified overview. https://m.youtube.com/watch?v=rStL7niR7gs

Basically, if the foundations for a nations weath is agriculture or industry it needs widespread infrastructure. However, for centralized resources like oil, very little infrastructure is required and improving the national standard of living is both expensive and dangerous for the ruling party.

PS: South America faces many of the same issues with corruption and political instability.

>it's simply accepted as the way things are

This is also the type of comment I was talking about.

>very little infrastructure is required

And where did that infrastructure come from? Western colonialism. Where does most of the oil go? Western nations.

Even today infrastructure can be dirt roads and people extracting gold etc via hand tools.

You can find examples of the resource curse going back to the spice trade. It’s an issue of trade more than anything else. After all, a tiny kingdom only has so much use for copper or whatnot on it’s own.

> I often see this sentiment about African nations but I almost never see thought beyond this into the root causes.

There's a large literature on this in political science and development economics. The subject is known as the "resource curse".[0]

[0] https://en.wikipedia.org/wiki/Resource_curse

>it's simply accepted as the way things are

This is the type of comment I was talking about, putting the blame on fate. The United States has lots of natural resources, as does China, and many other developed and industrialized nations. These nations got developed and industrialized by exploiting the resources of poorer nations, colonizing them, ruining the existing local governments and economies in order to optimize them for resource extraction, and then leaving abruptly in the middle of the 20th century.

The percentage of US and China’s GDP based on concentrated natural resources is rather low. Historically the US’s eastern coal resources where hard to export but boosted local industries. Kind of the opposite example.

Oh, honey, no, Appalachia absolutely suffers from the resource curse as well, to the point you often see scholars describe the region as an "internal colony." Big Coal came in, forced people off their land, extracted all the wealth, sure as hell didn't pay its fair share of taxes on it, bought the local governments all the way down to school boards and sherrifs to squash any opposition, and then left behind nothing in its wake except horrific environmental atrocities and poverty on par with inner city black neighborhoods, Native reservations, and the rural Deep South black belt. The negative stereotypes of Appalachians still perpetuated to this day were largely invented by industry to justify their exploitation and disenfranchisement. Negative stereotypes about blacks couldn't apply to a mainly white region so they just became "white trash" instead. The explosive growth of the American economy in the 20th century was fueled by the blood of over 100,000 coal miners who never saw a dime of that sweet sweet American dream money. And this shit is still going on to this day.

The poorest state in the US is Mississippi. That is the legacy of slavery. The second poorest state is West Virginia, which ironically shares a border with Maryland, the richest in the country. That's not an accident nor a testament to the allegedly poor character of Appalachians as a distinct cultural group separate from the rest of America. That was completely by design, because you can more easily manipulate a group of people if you force them to fight for scraps. That is the legacy of extractive industry in Appalachia. And so the cycle of rural poverty continues. Don't let them fool you with the "Trump Country" narrative or "Hillbilly Elegy".

West Virginia is worse off than most of the US. But, it’s not on it’s own the way a country would be.

So, it’s doing well compared to most of the world. The median household income is still $43,469 which is better than say Japan at least in nominal terms.

Reply on news.ycombinator.com