peak oil - inequality, poverty & development
It is often thought that the presence of oil in a developing country automatically allows for a fast track to development. It has been assumed that the presence of ‘black gold' within a country is a source of wealth for the people of that country. However, the reality is not so simple. It has been argued that this assumption is based on over simplified ‘trickle-down' theories, which falsely believe that economic growth automatically leads to development. Therefore, it appears that the presence of oil, or other natural resources of high value, can cause major development challenges. This situation is known as a ‘resource curse' or ‘the paradox of plenty'. Petroleum-producing countries are often plagued by corrupt and authoritarian governments, lopsided and unsustainable economic development and violent conflict. Foreign powers and their huge multinational oil companies often manoeuvre for control of the oil fields through clandestine operations or outright military intervention. In addition, disaffected rebels challenge governments in hope of winning a share of the lucrative oil revenues. Environmental damage by oil extraction can spark protest movements, which are frequently met by violent repression. Boundary disputes between states over oil reserves represent yet another link between oil and violence. As worldwide oil and gas production peaks and consumer demand continues to rises, prices soar, making conflicts for this increasingly scarce resource even more likely in the future. And yet there is a new threat for the weak economies of the southern part of the world becoming apparent. Rapidly rising oil prices, as oil gets scarce, have driven up agricultural prices, since industrial agriculture depends heavily on petroleum every step of the way. The rise in oil prices will precede the price rise in food because of increased costs of production and transportation.