Thursday, March 02, 2006

Fundamental Misunderstanding of Economics

Check out this item from BBC:

The military chief of Nigeria's Movement for the Emancipation of the Niger Delta declared "total war" Feb. 17 against all foreign oil interests in southern Nigeria. In an interview with The British Broadcasting Corp., Maj. Gen. Godswill Tamuno issued an ultimatum to all oil companies to leave the area by midnight Feb. 17. The group's "Dark February" campaign is aimed at stopping foreign exploitation of the region's resources, he said.

If I had been interviewing MG Tamuno, I think the follow up question I would have asked would have gone something like this:

"Well, if foreign oil interests don't exploit these resources, who will?"

What I think the General fails to grasp is that leaving all that oil in the ground doesn't benefit anyone. The Nigerians can derive economic benefit by allowing foreign oil companies to export the Niger Delta's oil reserves. The fact that the revenues from such exporting hasn't benefited the people of southern Nigeria is something MG Tamuno should take up with Abuja, not the oil companies.

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