Resource Curse in Peru and Nauru: A Comparative Analysis

Relevant Commonalities and Differences

Commonalities

In both Countries, we found that they have been endowed with natural resources especially minerals. For instance, Nauru, was rich in minerals especially phosphate which enabled them to offer free education and healthcare programs to its members. It was also considered one of the countries which had the highest growth rate in Australia. On the other hand, Peru was rich in gold and was producing 1.9 million ounce of gold per year. However, the minerals did not benefit the locals due to the mismanagement of the resources and corruption which was evident among Nauru and Peru leaders.

In Nauru for example, the situation turned from good to worse. In the initial time, the country was healthy, happy and wealthy. Everything seemed to be in order and the island beauty was likened to a paradise. When the country got independence in 1960, the president put the phosphate processing into the hands of the private firms; a process which led to it's over exploitation. Due to the fact that the revenue from the phosphate industry was being embezzled and there was no money left for investments, the country's performance declined drastically. For example, Nauru used a lot of money to bail the spiderbait hotel which did collapsed; it also lost millions in the development of Queen Victoria hospital site and the country is a victim of bad advice from the foreign experts like Italian John Walsh and Aldrin Paush who was found guilty of attempting to defraud Nauru of 100 million dollars. Most projects found both within and without Nauru such as Fiji grant pacific hotel collapsed due to mismanagement and bad leadership.

Just like Nauru, Peru's good performance was swept under the carpet due to bribery, corruption and lack of leadership. It all began in 1994 during the presidency of Alberto Fujimori where the multinational companies did engage in the corrupt practices in Peru. Due to the take-over wars which occurred between the Newmont and Buenaventura companies, billions of dollars were put in stake. A lot of funds were spent on the bribery of the court officials and other leaders, a process which led to wasting a lot of money to individual's pockets. Besides, Peru mineral sector is also under the control of the foreign mines that also had a greater influence on major decision making process. These led to overexploitation hence leading to the loss of flora and fauna when the country has embarked in extraction of cyanide to recover the microscopic bit of gold. These exposed the environment into a dire state of deterioration.

Differences

In the two countries, there are various differences which can be manifest. In Nauru, it was the president and other leaders' actions which caused a lot of problem to the loss of billons of funds. For instance, the president was fighting the court case for misappropriating $230,000 dollars. He had also spent the corporate funds worth $18000 to fly him and his wife from London to New York, $24000 as a deposit on his house and provided lots of cash to his wife and daughter based on the company's accounts. They also use the corporations' money to buy clothes food and jewelry. Besides, the embezzlement of funds was also evident in Phosphate Corporation where millions of dollars was missing. The chairman also decided to erect a building worth $231000 against the norms of the company. These coupled by other factors have led to the prediction that the economy will be prone to collapse when the president has not change tact. However, in Peru, the embezzlement was in form of bribery among the president of France and Peru as well as other leaders. These put the people to lose trust in the government and the court system hence emergence of peaceful demonstration and road blockage.

In Peru, the citizens had some freedom of expression as oppose to Nauru people. The Peruvian citizen had the freedom to oppose the expansion of the gold mine to the Cerro Quillish Hills through demonstrations. These enabled them to stop expansion plan and save the massive destruction and degradation of the environment. In this case, it can be evident that the society is indulges in activities which defines their destinies. However, the case of Nauru people lies on the hands of their leaders. The living standards have gone high and the consumers could not get the necessary utilities. For instance, people were only entitled for 3 hours of power in 24 hours, a process which made life to be very miserable and unpredicted. The schools are being shut down because there is no water and power. They have to stay for home due to lack of few due to the payment delay of about 2 months. The effort made by Visionary group to change the situation was thwarted by threats from the government as their lives were put into a pure risk.

The lesson Learnt

From the analysis, it can be learnt that greed and bad leadership is the hallmark for a country's failure. Besides, without strong regulatory measures, the private sector can engage in the public services hence cause disequilibrium in both the goods and money markets. Therefore, it can thus be evident that Nauru and Peru should improve their leadership and form legislations which can assist in the control, allocation and management of the country's resources. They should fight corruption, plan investments and bring to an end any form of embezzlements of the public funds. The Peru government should advocate for the preservation of the flora and fauna while the Nauru government should allow the public to access loans from the bank, the revenue from the phosphate sector must be restored and the health and education standards must be improved to ensure that the living standards of the people is optimized.

Bibliography

ABC Australia. 2001. Paradise lost – Nauru. https://www.youtube.com/watch?v=pRl5ctx-S1M, site last visited August 21, 2017.

WGBH Educational Foundation. 2005. Peru: The curse of the Inca gold. http://www.pbs.org/frontlineworld/stories/peru404/, site last visited August 21, 2017.