Fighting the Effects of the Curse of Resources

In order to mitigate the security risks to my client in the Balkans I recommended that strenuous attempts were made to restore the company’s Social License to Operate by tackling the root causes of the problem: the negative effects of the Curse of Resources.

The first requirement was the correct identification of local stakeholders. This is not always straightforward, especially in former communist bloc countries where traditional sources of authority were often eliminated over the course of the twentieth century.

In Africa the problem is slightly different. In his book “What went Wrong with Africa” Roel van der Veen argued that the decision of various colonial powers to hand power over to urbanised elites, trained and educated in the west, rather than to traditional sources of authority with a reputation for leadership and moral excellence, rooted in the provinces rather than the capital city, and deeply integrated into the local culture, is at the heart of the current leadership crisis in Africa. It is not a coincidence that two of the most respected post colonial African leaders, Nelson Mandela and Julius Nyere, both came from traditional leadership backgrounds. Mandela was of royal ancestry, and Nyere was the son of a tribal chief. Both regarded the village as the backbone of a healthy society.

The point is attempts to build a Social License to Operate can only work if the right kind of people are identified as partners, and it is often the case that such partners come from very traditional backgrounds. The Emir of Kano and the Sultan of Sokoto in Northern Nigeria are examples of two such leaders, and it is interesting to note that the current Emir of Kano established a reputation for fighting corruption during his time at the helm of the Nigerian banking system.

Once the client had worked out who the local stakeholders were, and from that who was most likely to be an effective partner, the next step would be to invest in local business, so that the local community came to see the client as a partner.


29. Leopold Kohr was an economist and political scientist known for his opposition to the “cult of bigness” in social organisation. He said:

“..there seems to be only one cause behind all forms of social misery: bigness. Oversimplified as this may seem, we shall find the idea more easily acceptable if we consider that bigness, or oversize, is really much more than a social problem. It appears to be the one and only problem permeating all creation. Whenever something is wrong, something is too big..(and) if the body of a people becomes diseased with the fever of aggression, brutality, collectivism, or massive idiocy, it is not because it has fallen victim to bad leadership or mental derangement. It is because human beings, so charming as individuals or in small aggregations, have become welded into over-concentrated social units.”

30. Kohr argued:

31. It is worth noting here that one of Africa’s most respected post-colonial leaders, Julius Nyerere, also understood the value of small, as opposed to large structures and the need for self-reliance. Self-reliance and the value of small-scale as opposed to large scale economic structures were at the heart of his policies in support of villages.


31. EF Schumacher was a well-respected economist who worked with Keynes and Galbraith when he was Chief Economist to the NCB. He was also heavily influenced by Islamic economics which, confusingly, he called Buddhist economics. Schumacher argued for:

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