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Resource Wealth: Curse or Gift?

By Brandon Miliate

Often central to any analysis of resource-rich nations and their struggle for autonomy, is the reality of a congenital over-reliance on extraction industries, to the detriment of other sectors. If that wealth is not properly invested, the country will be back at square one when non-renewable resources run out—dependant on the good-will of immediate neighbors or distant trading partners.

But, there is a positive potential of natural resources to play a role in a people’s struggle for independence. Resource wealth in the homelands of local populations that are under the control of another state have the potential to either help or hinder the struggle for significant regional or local autonomy. Iraq’s Kurdish Regional Government, China’s Xinjiang Uighur Autonomous Region, and Russia’s Republic of Tatarstan are three examples of how resource wealth can influence indigenous struggles for self-rule. When central governments are weak, resource wealth has the potential to give indigenous regions independent resources to achieve their goals. Strong central governments, in contrast, will exert more pressure on these regions when they feel they might lose access to these same natural resources.

Iraqi Kurdistan has been able to achieve remarkable autonomy, first as a protectorate of an American-sponsored no fly zone over Iraqi airspace following the Gulf War, and secondly as one of the few stable regions in post-Saddam Iraq. Kurdish leaders have pursued de facto independence from Arab Iraq by seeking strong regional autonomy and independent financial resources. In pre-invasion Iraq, Kurdistan was able to fund its own security forces, while limiting development projects through informal oil sales. After 2003, Kurdish resources were subject to taxation and redistribution by Baghdad. However, in April 2013, the Kurdish Regional Government (KRG) officially sold crude oil without even the nominal involvement of the Iraqi central government. These official sales are simply the most recent development in the long history of Iraqi Kurds benefiting from their resource wealth.

Since 1993, Baghdad has had limited control over the Kurdish north, a situation that has allowed the indigenous population to profit and keep their distance from the central government. In this case, Iraqi Kurdistan’s resource wealth is allowing the Kurds to avoid having to rely on Baghdad, thus strengthening regional autonomy- a resource gift.

China’s Xinjiang Uighur Autonomous Region is one of the least stable provinces of the People’s Republic. Many Uighurs continue to seek real regional autonomy to protect their linguistic and cultural identity in the face of a recent influx of Han Chinese immigrants and Beijing’s continued oppression of the Uighur population. Chinese state identity is certainly complex with overlapping historic and strategic concerns. But it is hard to ignore the reality that China could loose access to Xinjiang’s petroleum wealth if it lost control over the province. In energy-starved China, access to resources is a matter of natural security. With multiple pipelines coming into the province (including the Kazakhstan-China pipeline and the West-East pipeline) in addition to the mineral and petroleum deposits in the territory itself, Beijing fears instability in the region and is unlikely to lessen its control in Uighur territory.

In contrast to the KRG, Uighur activists calling for increased autonomy or independence operate in a strong state with an overbearing central government while security forces monitor their every step. There is no opportunity for Uighurs to profit from their resources without Beijing. Uighurs seem to suffer from a resource curse—their wealth making the Chinese government reluctant to allow real autonomy in the area.

The Republic of Tatarstan in the Russian Federation presents an interesting middle ground between Xinjiang and Iraqi Kurdistan. Tatarstan is among the wealthiest of Russia’s ethnic republics due to huge petroleum reserves. This has allowed Tatarstan to develop a thriving economy. More importantly, perhaps, it has also given the republic the resources to preserve Tatar culture. The Republic has the financial resources to support Tatar language study, music, and other traditions. While some republics in the federation are dependent on Moscow for limited funds, Tatarstan is not. However, this also means that Russia has become keenly aware that Tatarstan’s stability is vitally important to its broader national security. This has caused Moscow to tighten control over Tatarstan, and other ethnic republics.

Post-Soviet Tatarstan developed under a weakened Russian central government, but the resurgence of Moscow’s direct control over regional affairs is shifting that relationship. With recent episodes of unrest in Kazan, including assassinations of Muslim religious leaders, it seems likely that Tatarstan’s unique level of autonomy within the Russian Federation will continue to fade slowly. For Tatarstan, oil may be at once a curse and gift. Petroleum sales boosted autonomy in the 1990s, but in Putin’s Russia, resource wealth has led Moscow to reestablish a firm grip on the Republic’s affairs. It remains unclear whether Tatar elites will be able to maintain the balance necessary to preserve their unique political situation.

Indigenous autonomy and even independence ultimately depend on a number of factors. But as calls for regional autonomy continue, resource wealth may play a central role for many populations. Whether that role is a curse or a gift will ultimately depend on how strong the central governments of their respective states are and what value they place on regional resource wealth.

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Brandon Miliate recently completed his M.A. in Asia-Pacific Policy Studies at The University of British Columbia, and will be starting a PhD in Political Science at Indiana University- Bloomington this August.

[Photo Courtesy of Shutterstock]

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