PROPERTY RIGHTS AND THE RESOURCE CURSE

Property Rights and the Resource curse

Abstract

The resource curse afflicts poor countries with priceless resources like oil. Such countries are prone to oppressive administrations civil wars, and slower growth. The article talks about the Nigeria's resource curse frequently results from a disappointment to implement property rights: the property rights of each country's people in that country's natural resources. This right is extensively affirmed in international law, but violated when dictators and civil warriors sell off a territory's possessions in situation where the people can not possibly empower those sales. Companies that buy resources from repressive regimes are consequently receiving stolen goods, and passing these stolen goods on to customers. Nigeria ranks as one of the most corrupt state in the world according to Transparency International, a Berlin-based anti-corruption group; 72% of the country's population lives on $one a day or less.

Table of contents

Abstract2

Introduction4

Explanation5

property rights5

Right to ownership6

International law13

Oil companies in Nigeria and legal responsibilities17

Trade Related Aspects of Intellectual Property Rights (TRIPS)30

Conclusion33

References36

Introduction

Nigeria, Africa's largest oil exporter, has a population of 140 million (larger than Britain and France combined). Between 1965 and 2000, Nigeria received a very substantial percentage of its GDP from oil revenues that totalled about $350 billion. However, in the 30 years after 1970, the percentage of Nigerians living in extreme poverty ($1/day) increased from 36 percent to almost 70 percent—from 19 million to 90 million people. The oil revenue contributed nothing to the average standard of living, and indeed the period of oil exploitation saw a decline in living standards. Moreover, inequality in Nigeria simultaneously skyrocketed. In 1970, the total income of those in the top 2 percent of the distribution was equal the total income of those in the bottom 17 percent. By 2000, the top 2 percent made as much as the bottom 55 percent. Meanwhile, corruption was everywhere evident in the Nigerian government, and most strikingly at the top. For instance, in just four years in power, General Sani Abacha and his family embezzled around $3 billion. (Braithwaite and Drahos, 2000, 66-78)

Explanation

property rights

Fears of violence and fraud again surround elections in Nigeria. A tanker truck attempted to destroy the Independent National Election Commission and an opposition party claimed that it captured a truckload of rigged ballots. Such unrest is symptomatic of the resource curse, wherein extreme wealth from natural resources often harms political stability, equitable prosperity, and economic growth in developing nations. As the New York Times reports: By all accounts, petroleum profits have brought huge benefits to this country's rulers, but few to its people. Oil companies typically keep 7 percent of the profits from oil sales; the government gets 93 percent. (Braithwaite and Drahos, 2000, 66-78)

In an effort to redistribute wealth, the government now gives 13 percent of the proceeds from oil sales to the producing states but there is little accountability of how these funds are spent. Much of it simply disappears, wasted by inefficient or corrupt local officials, according to a recent Human Rights ...