Poverty in the midst of Natural Wealth

Liberia - one of the largest rubber plantations in the world , the largest remaining portion of the once-great Upper Guinea Forest , virgin forest full of tropical hardwoods , gold and diamonds , a vast iron-ore mountain range in the north of the country that is currently being rehabilitated with a $1bn investment - resource-rich, dirt-poor Liberia .

Authors of the new report - called Land Grabbing and Land Reform argue that the raw materials sector has been organised almost exclusively to benefit a wealthy elite. Ordinary people saw the resources vanish - the trees being chopped down, for example - but did not see schools and hospitals coming back in return.

Liberia's modern-day economy was developed and exploited by expatriates and the small elite of "Americo-Liberian" freed slaves who colonised the country in the 19th Century and ended up dominating the indigenous Africans.
"The elites and the government structures they erected," the report says, "came to be seen as illegitimate, engendering first resentment, and in time hatred."

The war was not the cause of the poverty of Liberia but a consequence of it, and the reliance on the export of raw materials was a factor in creating that poverty.

On diamonds - the proceeds from which fuelled the wars in Liberia and neighbouring Sierra Leone - the report says there has been little effort by the government to make the gems benefit local communities or the artisanal miners themselves.
It says the ministry of lands, mines and energy "has resisted engaging with civil society".
On rubber, the report says the big plantations in Liberia have been extracting raw rubber for more than 70 years but have "so far not manufactured so much as a single rubber band in the country".

"The fighting... ceased only in 2003 with the departure of Charles Taylor and the arrival of UN forces," the report says, adding: "The peace however remains fragile, threatened... most importantly, by the unresolved issue of who will exploit and who will benefit from Liberia's natural resources." the report says, that many of the elite "see the return of peace as simply a chance to return to business as usual, an opportunity to recreate the Liberia they and their forebears knew, and exploited, for more than a century".

The report also describes what it calls the "resource curse" , which this blog earlier explained here in relation to the so-called oil bonanza in certain African countries . Endowment of natural resources in poor countries is one of the "traps" that prevents them from growing as rich as developed nations. The resource exports cause the country's currency to rise in value against other currencies. This makes the country's other export activities uncompetitive. Yet these other activities - manufacturing for export, for example - might have been the best vehicles for sustained economic growth. The volatility of prices of other raw material exports from poorer countries - especially but not exclusively in Africa - is also not conducive to long term investment and growth.

British economist Paul Collier argues that resource wealth can also be a curse because it induces autocracy by allowing elites to buy their way into power. Countries end up in a "resource trap" which does not generate the sustained income growth and security that can promote democratic accountability.

Once again Socialist Banner can only counsel for the working class to assume democratic control of raw materials and direct these resources for benefit of the working class as a whole and not in the interest of the small minority who presently own this natural wealth .