SOC367: Write an essay on the question of whether abundant energy and mineral resources are a blessing or a curse in the context of South-East Asia: Southeast Asian Societies ECA Essay, SUSS, Singapore

Question 1

Answer the following question in 3,000 words. (Do not exceed or fall below the word limit by more than 10 percent.)

While the citizens of countries that are rich in energy and mineral resources may believe these to be a blessing, some scholars of development have described them as a “resource curse”. They argue that over-reliance on exports of oil, gas and mineral resources results in distorted and stunted economic growth, slow and uneven social development, and bad governance.

Economically, extractive energy and mineral industries are not labour intensive and therefore do not create ample employment opportunities for citizens. Instead of contributing to the development of a diversified industrial sector, a large section of the workforce is absorbed into an expanding public sector leading to overblown, inefficient, and corrupt state bureaucracies.

Politically, in societies which rely on energy and mineral exports the state often becomes a distributor of wealth through patronage networks in which material rewards (public sector jobs, government contracts, universal social welfare policies, etc.) are distributed in return for compliance and loyalty.

Socially, the dominance that oil and gas revenues give the state over the society create a culture of dependence and complaisance in the society and a deep-rooted sense of entitlement that militate against innovation and competitiveness.

Some development scholars have therefore argued that being resource-poor can actually be a blessing in disguise because it provides better conditions for the development of competitive and efficient economies.

This argument has been put forward by former PM Lee Kuan Yew in an interview with The New York Times (29th August 2007):

Paradoxically, [Lee Kuan Yew] said, if Singapore had not been so poor it might never have transformed itself and prospered as it has. His warnings about vulnerability and collapse are a constant theme to persuade his people to accept limits on their freedoms.

“Supposing we had oil and gas, do you think I could get the people to do this? No,” he said. “If I had oil and gas I’d have a different people, with different motivations and expectations. It’s because we don’t have oil and gas and they know that we don’t have, and they know that this progress comes from their efforts,” he said.

Singapore is one of the least ‘resource-rich’ countries not just in South-East Asia but globally, whereas Brunei derives 90% of state revenue from oil and gas exports, more than any other country globally. Other South-East Asian countries, such as Malaysia, Indonesia and Myanmar are also major exporters of energy and mineral resources, and these industries are growing in importance due to high demand from China in recent years.

Write an essay on the question of whether abundant energy and mineral resources are a blessing or a curse in the context of South-East Asia. Compare the economic, political and social development in resource-rich and resource-poor societies, to specifically discuss the following two issues:

(a) Explain and evaluate the “resource curse thesis” as a theory of distorted development by examining the economic, political and social consequences of resource dependency.

(b) Taking Singapore as one example, and one of the resource-rich countries in SouthEast Asia (Brunei, Malaysia, Indonesia, or Myanmar) as another example, appraise the specific validity of the “resource curse thesis” in these two cases.