Diamonds, oil trafficking and conflict financing

8 important questions on Diamonds, oil trafficking and conflict financing

Resource dependence results in economic underperfomance.

  • What are the results (name 3) of economic underperformance?

  1. High price fluctuations, decling terms of trade.

  2. Natural capital depreciation.

  3. Crowding out of the nonresource sectors through local currency overvaluation and rent seeking.

  • Resource dependence results in economic underperformance and... ?

  • A weaking of governing institutions that makes a society more vulnerable to armed conflict.

Resource dependence does not assume war is (simply) greed-driven, but emphasizes contextual conditions that increase conflict vulnerability.

- Exposure to high price fluctuations, crowding out of other sectors, corruption, fiscal independence and overconsumption.

  • Name 4 factors that accomodate a nation to be most vulnerable to armed conflict:

  • Low income per capita.

  • Declinging economic growth rate.
  • Weak state coercive capacity and institutional authority.

  • Political regimes in transition.
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Resource curse

Resources can make countries vulnerable. 

  • How?

  • Resources create uneven development between areas.


- Vulnerability has a spatial dimension.

- Spatial dimension = Ruimtelijke dimensie.

Pheripheralization and uneven development shaping the political economy.

- Not only caused by resource curse, but wider sources of economic margnalization and political governance.

  • For example:   

  • Colonial legacy.

Presence of natural resources poses a risk of conflict over who has access to them.

Such conflicts can lead to violence (for example militarization, pollution, labour issues).

  • Name 4 countries with natural resources and conflict?

  • Sudan.
  • Angola.
  • Ogoniland (Nigeria).
  • The Democratic Republic of Congo.

Natural resources create economic opportunities for combatants.

Conflicts are not just about control of natural resources.

  • Where are conflicts even more in control of?

  • The commodity chain.

  • Where does the commodity chain (supply chain) connect to the oil and diamond market?


- illegal activities.

  • Arms.
  • Labour
  • Control of pipelines.
  • The kidnapping of refinery staff.


- The commodity chain also connects the production region to other regions in the world.

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