When addressing the problem of extreme poverty in developing countries, economist Paul Collier emphasized the importance of harnessing the natural resources of the modern world for the benefit of the poor, focusing on four integral links in the chain of the ethical custody of resources.
Invited to serve as a special advisor to the Ford Family Program in Human Development Studies and Solidarity, Collier presented the lecture “The Plundered Planet and Restoring Natural Order in the Bottom Billion” Thursday at the Hesburgh Center for International Studies.
In the lecture, Collier identified the necessary steps to employ the world’s natural resources in order to bring developing countries out of poverty and into positions of strength and utility.
“Paul’s research and service are motivated by deep respect for the inherent dignity of the human person and, because this a core value at Notre Dame, we are extremely happy that Paul has joined us as special advisor,” director of the Ford Program Fr. Robert Dowd said.
Professor of Economics and director of the Centre for the Study of African Economies at the University of Oxford, Collier has devoted his career to researching the many causes of poverty and developing innovative ways of creating tangible solutions to the many economic and social problems facing developing areas of the world.
When addressing the need to maximize natural resources to bring them to development, Collier continually focused on an analogy of links that make up a decision-making chain.
“There is a whole chain of decisions that have to go right,” Collier said. “If any of the links in that chain break the whole chain is broken.”
Central to any discussion of poverty is an important ethical component that addresses not only the people involved but also the natural resources being used to bring about a solution to poverty in developing countries, Collier said.
“The right message for the ethics of the natural world is that nature is there for us to use, but to use responsibly, not just for ourselves, but for the future, not just for the few but for the many,” Collier explained. “This is the ethics of custody or stewardship.”
Finding the natural resources and determining their utility are the first links in Collier’s chain of ethical stewardship, and forms of plunder are pivotal to the failure of this chain. For Collier, the two main forms of plundering occur when the few steal from the many and when the present steals from the future.
“Use [the resources], we can,” Collier said. “But if we use them we should use them productively and bequeath to the future something of equal or greater value.”
While the known natural assets of the developed world value $125,000 per square kilometer, the known subsoil assets of Africa value approximately $23,000 per square kilometer. The disparity in values highlights the important concern that there have not been enough discoveries and harnessing of natural resources in places like Africa, Collier said.
The second link in the chain is how to sell and tax the resources for the benefit of the individual countries.
Citing specific developing countries’ failed experiences with revenues and taxation, Collier emphasized the need for greater transparency in the transactions of natural resources.
“The resource extraction process shouldn’t be sold by secret negotiations between a company and a minister but by transparent auctions,” Collier said. “The true value is revealed in an auction, but this is very seldom done.”
The question of consumption versus investment of revenues is the third link in the chain of responsible custody of resources.
When examining the best solution for developing countries, Collier studied the comprehensive wealth of a nation, derived from natural resources in addition to manmade revenues.
“Over the past 30 years, the comprehensive wealth in Africa has been cut in half,” Collier said. “Natural resources depleted and accumulation of other assets have been built up, yet living standards have been very low.”
Collier suggested saving and investing in the nation itself as the best model for developing countries to economically and socially advance themselves.
“They need to invest the money in the country, using the savings for domestic investment,” Collier said.
The fourth and final link is learning how to invest revenues properly and efficiently to yield the greatest outcome, which necessitates the development of international standards that teach nations how to use the opportunities created by natural resources effectively, Collier said.
Collier said it just takes one generation, adhering to the ethical custody chain of decisions, for change and prosperity in the developing world.
“This is a long chain, and all the links have to hold, and not just hold for the moment but have to hold again and again,” Collier said. “There are no quick fixes to bring a poor society to prosperity, but it only takes a generation.”