Reference no: EM132865959

Question 1: What role do foreign actors play, if any, in these processes (e.g., states like Russia, the US, and Britain, and oil majors like ExxonMobil, Royal Dutch Shell or China's CNOOC)?

Because of the oil vested interest that the U.S., Russia and Britain has in the Exxon Mobil's of the world, they play specific roles in driving the economies of oil rich countries. According to Patrick, S. (2012), they willingly advocate for "Dutch Disease" type outcomes in many of these Nations. By immediately establishing oil manufacturing infrastructure, they not only spearhead efforts to suppress local economic growth but also reinforce political policy that stifles competitive resources. As is the norm in most economies that lack diversification, money is a great influence when it comes to political reform. It appears the "resource curse" and the impact that foreign actors and oil majors have on ORN's is best summarized by what is referred to as a "staple trap" model. This model explains why the economies of ORN's struggle to realize true economic growth and why they are subject to three adverse consequences: 1) economic diversity only occurs initially in other commodities, 2) it retards urbanization and 3) results in surplus rural labor, Auty (2001:83).