Alaska News

An Alaska solution for Libya's 'resource curse'?

CNN has published a lengthy report discussing what economists think about the politically and economically liminal period Libya will enter after settling its civil war and creating a new government. The country contains great amounts of oil, and the black stuff constitutes the biggest part of its economy, but until recently, that wealth was restricted to a select few. Economists call it a textbook case of "the paradox of plenty" or "the resource curse." And it means that policy decisions made in the next few years will stay with Libyans for decades.

One option for Libya, economists say, is "the Alaskan solution," finding a way to distribute the money directly to its people, similar to the Alaska Permanent Fund. There are other options, but notably for Alaskans, much of what the economists say about decisions facing Libya applies to Alaska, or did at one time.

"Research shows the more a nation's economy is dependent on export of natural resources, the less that nation's economy is likely to grow," Ragnar Torvik, an economist at the Norwegian University of Science and Technology, told CNN. "But it's a chicken and the egg question -- is it natural resources that cause this low growth, or some bad economic and political conditions as a result of just specializing in natural resources?"

Read much, much more, here.

Craig Medred

Craig Medred is a former writer for the Anchorage Daily News, Alaska Dispatch and Alaska Dispatch News. He left the ADN in 2015.

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