Two countries in the modern age seem to despise their resource sector, or their elite leadership does anyway. Most, if not all, other countries are proud of theirs.
It is not hard to see why most nations cherish their natural bounty of resources. There is something elementally important about a nation having more of any given raw material than they actually need at present. Ones that lack sufficient natural resources are often skittish and paranoid, roughly speaking, because they are beholden to others for survival. Even the US felt that way for the longest time; the mightiest nation on earth had a fuel appetite that could only be sated by OPEC. We thus have been subjected to bizarre international freak shows such as the American relationship with/reverence of Saudi Arabia, the invasion of Iraq, and oh lord I can’t even begin to catalog all the madness that reliance has caused. And it all happened because the US felt exposed by having someone else control their lifeblood and subsequently in effect their destiny.
Two countries seem to have taken a different tack. One is Venezuela. Here is a nation blessed to the gills with natural resources, however their leadership has chosen to pound the whole thing right back into the ground, civilization and all. This modern miracle of de-industrialization was achieved by treating petroleum wealth as a given, and acting accordingly.
Canada has chosen a slightly different path, though bizarrely the most savage attacks against our resource base come from its own leadership. Venezuela had the dim-witted decency to at least value their oil reserves, even if they took them for granted. Canada on the other hand openly seeks to abolish the industry, with no plan for any replacement. In fact, a small but loud number of Canadians actively vilify our own oil sands because of its carbon content or made-up ailments like its toxicity, or corrosiveness, or whatever, but have no qualms at all with Venezuela’s similar deposits (Google Venezuela tar sands and you will get 477,000 results; Google Canadian tar sands and you will get ten times the results).
The Canadian opponents of Canadian resources don’t understand how resources are developed. They share this blind spot with their fellow ideologues in Venezuela. The relevant point that they miss is that in a modern market economy, capital is required for development. Because both countries are not global superpowers, foreign capital is required to help out.
What Canada’s leaders seem to be missing is the fact that capital flees under certain policies. While the motivations of Canada’s ruling elite – either plain cluelessness or emulation of our new role mode Venezuela – may not be clear, we can be certain that they are clearly ignorant of a second-order effect: that native capital will flee also. That is, Canadians have no interest in investing in their own sector either, and their money will go elsewhere.
This fact will no doubt cause jubilation in some of the halls of power, as it will for anyone – say, the average university prof – for whom the word “capital “ is a dirty one. For those people, glory days are ahead. The target is within reach. Perhaps in the not too distant future Canada and Venezuela will have jointly finished off their petroleum industries, and will spend their time hanging out together at the back of the UN theatre, cracking jokes and goofing around while some solemn speaker announces further guidance for the world to live by. The UN will cut them some slack; after all, even if the two economies cratered and need support, they will have “kept it all in the ground,” and like a martyr gone to heaven, the two miscreants will be promised endless bounty. Or booty, or whatever.
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Read more insightful analysis from Terry Etam here. E-mail Terry.