Wakanda-nomics, or the "Resource Curse"

"If you say one more word, I will feed you to my children.... I'm just kidding, we're vegetarians."

So I saw Black Panther back in April, and I took the time to watch it again on cable -- it really was that good.  Especially for a Marvel flick, BP easily surpassed the Avengers: Infinity War -- which I expected to be bad, but it exceeded my expectations.  What was really the point of IW, other than to make way for future sequels?

It was a stupid movie, with zero plot development whatsoever.

Anyways, back to Black Panther, the premise is quite intriguing: in the fictitious African country of Wakanda, an ample supply of super-rare metal "vibranium" (which fell to earth in an ancient meteor strike) blesses the nation with enormous wealth and the most advanced technology in the world. Having never succumbed to hostile outside forces, Wakanda has been free to develop its economy in complete isolation from the outside world.

The "Resource Curse"

So that's Hollywood. 

Now look at the real world: history is littered with economies that never escaped the Resource Curse (aka "Dutch disease"), where mineral riches keep a country poor by crowding out value-additive sectors or ushering in corrupt/predatory/totalitarian regimes.  Of course some have fared okay -- typically if they made their natural discoveries later in their economic development: Norway, which started developing its massive natural gas reserves in the 1970s, comes to mind; also Botswana, one of the largest producers of diamonds.  Angola, with its game-changing crude oil discovery in the 1960s, still struggles to diversify away from petroleum, but it has thriving young population and democratic political stability.  Angola's fate is a stark contrast to its neighboring Democratic Republic of Congo, which is:

• most famous for its longtime president Mobutu Sese Seko (dubbed "the archetypal African dictator"), with his lavish palace in the jungle, and the great war that beset most of sub-saharan Africa between 1997-2003, killing over five million and displacing many more.
• remains not very democratic to this day (despite its name change from previously Zaire), earning the "semi-presidential authoritarian dictatorship" status from Freedom House, under current president Joseph Kabila, who stirs ethnic violence for political gains. 
• endowed with world-leading natural resources, including cobalt, an important material for batteries powering future electric vehicles
• Despite the mineral wealth, the Congolese are among the world's poorest people, consistently having the lowest nominal GDP per capita in the world. The DRC is also one of the twenty lowest-ranked countries on the Corruption Perception Index.

 Ouch.

General Mobutu's palace in DRC, ransacked and reclaimed by the jungle

Other examples abound, as the Economist writes, "centuries of copper mining have only raised Chile [with its largest copper reserves on earth] to the level of Kazakhstan and Croatia in purchasing-power terms.  Indonesia's world-beating endowments of gold, coal, nickel, tin and copper have resulted in an income per capita somewhere between Albania and Tunisia."  Notably, resource-rich countries with large populations (e.g. Congo, Chile, Brazil, Indonesia) tend to do worse than those with smaller, more manageable population (Norway).

So how can countries escape the resource curse?  Again, it's worth taking lessons from renowned political scientist Stan Lee:

Upstream and downstream investment around natural resources

It is very tempting for resource-rich countries to be satisfied exporting raw ores, fattening their elites while citizens remain hungry.  Wakanda, on the other hand:

[...] not only mines vibranium but designs and builds a dazzling variety of downstream applications. They include a nano-tech panthersuit that absorbs blows and bullets, then echoes the energy back against its source. [...] The applications extend to weaponry and transport, such as the royal talon fighter that zips from Wakanda to Oakland, California, and the vibranium rail above which high-tech chariots levitate.

“Wakanda’s upstream, midstream and downstream mineral sector are entirely controlled by Wakanda itself,” points out Nicola Woodroffe of the Natural Resource Governance Institute, a think-tank in London. It is as if Botswana not only mined, cut and polished diamonds, but also designed and produced the world’s diamond necklaces, drills and bearings. It is as if Norway had a monopoly on oil, petrochemicals and plastics.
This is actually harder in real life: Countries blessed with natural resources are not always blessed with labor, capital, skills and infrastructure required to succeed further down the production chain. The best place to cut and polish diamonds is not Botswana, with its [small] population of 2.3m, but coastal India, which can bring many more hands to bear.

Economic diversification

For example, diversifying away from oil is a major tenet of Saudi Arabia's Vision 2030 program (lord only knows what's gonna be left of this one).  While many leaders talk about broadening their economies, it's very hard to adopt new skills, and build up industries, instead of just keep taking things from the ground. Writing about Africa for Brookings, Mariama Sow and Amadou Siy explains:

[...] mineral exports made up more than 90% of exports in Equatorial Guinea, Nigeria, and Angola. In addition, the high dependence on oil exports in certain African countries has led to misaligned exchange rates, the decline of non-resource sectors, political authoritarianism, conflict, and economic inequality.

While none of the countries cited above mirror Wakanda’s isolationism, the fictional country shares many similarities with Norway and Botswana. Indeed, in the real world, such a fate is not inevitable in every resource-rich African country. For instance, Botswana [...] has not fell victim to the resource curse and has done so by implementing a three-pronged method, as highlighted in a 2012 African Development Bank brief. First, Botswana pursued economic diversification—although with mixed success. Second, the country established a fiscal rule that separates expenditures from revenues and thus shields expenditures from fluctuations in diamond prices. Third, it invested diamond revenues for the use of future generations—using a sovereign wealth fund called the Pula Fund.  Outside of Africa, Norway has been praised for its management of natural resources, largely based on the investment in its sovereign wealth fund. In addition, Norway spends 4% of the fund on public projects. In the comics, [Wakanda] sets aside a generous portion of vibranium revenue to create a social safety net.

In addition, while oil and diamonds are not as versatile as vibranium and cannot be used individually to promote the technological advancement of resource-rich African countries, there exists a space for the revenues they generate to be reinvested in technology and manufacturing, among other sectors.

Leadership matters

Some nations have the great luck to be lead by FDR, or Lee Kwan Yew.  Others are stuck for decades with Robert Mugabe, Gaddafi, Chavez/Nicolás Maduro, or Saddam Hussein.  So the lesson to draw from Black Panther is that while mineral deposits can bring in wealth, on their own they're not enough. The real wealth of Wakanda wasn't vibranium, but its good governance.

Recently colonialism is back in style -- not the Vasco de Gama/Chris Columbus western imperialism -kind, but the "soft power" debt trap -kind.  China's Belt and Road Initiatives aim to massively build up global infrastructure to secure raw materials and logistics to ensure the country's manufacturing supremacy. The Communist Party especially likes to prey on nations ruled by authoritarian leaders or one-party rules, with lackluster checks and balances, or distressed economies with no other viable alternatives: so far there's several parts of Africa (Zambia, Djibouti), South Asia (Sri Lanka, Pakistan), Europe (Greece) and South America (Venezuela), who else wants to be a Chinese (economic and military) colony?

So we shall see during the next US election cycle, where in lieu of a boring debate, Joe Biden challenges Trump to a deathmatch next to a waterfall.