Why are nations that are rich in natural resources often the poorest? Since the 18th century, economists have observed this cruel paradox: the well-being of a country’s inhabitants is often negatively correlated with the amount of natural resources it possesses. With exceptions such as the Nordic countries, nations rich in oil, gold, diamonds or other minerals generally exhibit high rates of poverty, inequality and corruption, in addition to suffering from political instability, violence, dictatorships and human rights abuses. Examples of this phenomenon are easy to find in Africa, the Middle East and right here in Latin America.

This perplexing paradox, however, has an explanation. In fact, the reason behind this phenomenon is that the abundance of natural resources often causes all the attention and energy of a country’s political and economic actors to focus on trying to control that resource and squeeze the most profit from it. this one. The wealth that this natural resource brings therefore has the disastrous side effect of causing other economic sectors to remain neglected and underdeveloped. Worse, the wealth that comes from extracting these minerals ends up fueling corruption, especially among the country’s elites, since it is much easier to become a millionaire thanks to these royalties than through honest work. Everyone is fighting to have a piece of the same cake, instead of baking other cakes. Like drug addicts, the political and economic apparatus becomes completely dependent on this resource to the detriment of the well-being of the general public.

This phenomenon is noticeable in Ecuador. Indeed, since oil was discovered on our territory, the economy of our country is disproportionately dependent on the exploitation and export of crude oil, which is under state control.

The consequences of this addiction were terrible. Our overdependence on the hydrocarbon sector has reduced the incentives of both the public and private sectors to innovate and open new markets. Worse, since oil wealth is essentially a state monopoly, this has caused corruption to become the easiest and fastest way to get rich in Ecuador: either through handwritten contracts, price gouging, or simply outright theft of funds.

(…) which made corruption the easiest and fastest way to get rich in Ecuador…

Oil is a limited resource, whose reserves will disappear sooner or later. In this generational change in Ecuadorian politics, it is necessary for our new generations to be aware of the need to change our economic model. Why not dream of an Ecuador where technology and next-generation industries replace the old extractive economy? It is up to us whether we escape the paradox of abundance. Will we have the vision and will to do it? (OR)