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In the readings on public diplomacy this week, the “paradox of plenty” was brought up, in relation to the wealth of information that we now have access to, thanks to technological advances that resulted in an explosion of information. The idea is that, when people are overwhelmed with the huge volume of information confronting them, it’s hard to know what to focus on.

This prompted me to do some more research on “the paradox of plenty”, and I learned that surprisingly enough, this term is also used in relation to why countries with an abundance of natural resources, are actually faring quite poorly.

Prime examples of this are the many African countries that are rich in gold, diamonds and oil, but whose people are very poor. We initially tend to blame those country’s leaders for wasting or mismanaging the wealth, but in fact, there is also a solid explanation in economics for this phenomenon, called the ‘Oil Curse’ or the ‘Dutch Disease’, named after the adversities that fell upon the Netherlands, after it found North Sea gas. “When a country strikes hydrocarbons, a sudden inflow of dollar-denominated revenues often leads to a sharp appreciation in the domestic currency. That tends to make non-oil sectors like agriculture and manufacturing less competitive on world markets, thus leaving oil to dominate the economy.”*

Politics also offer an explanation to the curse of oil. “Because oil money often flows directly from Big Oil to the Big Man, as Africa’s dictators are known, governments have little need to raise revenues through taxes.”* These rulers are not motivated to develop non-oil sources of wealth, and so the ruled (but untaxed) consequently have little reason to hold their rulers accountable. Obvious examples of this are the Persian Gulf countries like Saudi Arabia who stopped offering democratic participation to their people, because the merchants no longer had any say or power, upon the arrival of the oil boom.

Interestingly enough, one of the solutions to the oil curse, turns out to be similar to that of the “paradox of the plenty” in public diplomacy. International initiatives are pushing for transparency in oil dealings; calling for increased disclosure of oil accounts and licenses, in order to minimize under-the-table bribes to oil-rich leaders.

Similarly, credibility is now the crucial source of soft power in international diplomacy. As governments compete with other governments and with news media, corporations, NGOs, and other networks for people’s attention, the one with the best reputation is most likely to be heard and paid attention to, and so political struggles are fought over the creation and destruction of credibility.

 

* http://www.economist.com/node/5323394 

 

-Laura H.

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