Andy Thorpe with thick beard standing in front of blue background. Life Solved logo in corner

Why a wealth of natural resources may not mean a straight line to economic prosperity

  • 23 February 2021
  • 11 min listen

In this episode of Life Solved, we gain an insight into the complex and far-reaching world of Development Economics. The University of Portsmouth’s Professor Andy Thorpe tells us about carrying out research in remote locations or in volatile or changing situations, in order to uncover how distinct factors can build up the economic puzzle of a nation.

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Deep coal beds, rich oil fields – you’d think an abundance of one in-demand commodity would make a nation rich - but that’s not always the case.

Professor Andy Thorpe explains why a country’s wealth of natural resources may not mean a straight line to economic prosperity.

Have you ever heard of a “resource curse”?

Oil, for example, is very important to places like Kuwait. The only problem, of course, is that everybody wants to work in oil. You tend to find that oil tends to crowd out any other type of economic activity, and they refer sometimes to that being a resource curse.

Professor Andy Thorpe, Associate Dean of the Faculty of Business and Law

An economic puzzle

Andy specialises in researching how economies grow; their rate of change and development. This means that his work stretches across diverse sectors and subject areas like fishing, agriculture and climate change, in order to build up a picture of each nations economic puzzle.

He says a diverse economy is healthier than one relying upon a single or finite resource and explains how this ‘simple’ big picture of a diverse and innovative economy can be clouded by short-term election-winning policies, conflicting priorities and political pressures.

You have to look at all the factors that may influence why a country develops in certain ways – why senators to vote in certain ways – and try to disentangle the impacts of that change

Professor Andy Thorpe, Associate Dean of the Faculty of Business and Law

War, politics, climate and change

Professor Thorpe has studied the impact of civil war and environmental pressures upon economies, as well as changing and volatile situations. He says that this edge is what drives his curiosity, and it’s taken him around the world from mountains in Central Asia to Argentina and Sierra Leone:

I've always been she with a somewhat more unconventional. I mean, when I was young, for me the two weeks package holiday to Spain, I’d go off and hitchhike around Europe for two, three months. So doing different things in different places was always quite exciting

Professor Andy Thorpe, Associate Dean of the Faculty of Business and Law

From politics to war and climate change, how can governments best secure the future of their nation? The big picture can look a little different in the face of short-term tensions.

Episode transcript:

John Worsey: You're listening to Life Solved from the University of Portsmouth, where research is taking place to change our world for the better. In this series, we're meeting some very clever people and understanding how they're making a difference in your life and mine.

John Worsey: I'm John Worsey and today we meet Professor Andy Thorpe. He's a Professor of Development Economics and Associate Dean of Research in the Faculty of Business and Law at Portsmouth.

Andy Thorpe: So I sort of developed an interest in sort of fisheries policy. If you want to value inland fisheries, you need to know every single fish that's been caught and the price of those fish that were caught and if they've been used for self-consumption. Then you've got to put a value on that and that's really impossible.

John Worsey: He told me how his work allows him to make a difference in poorer parts of the world.

Andy Thorpe: But there again, should we ignore something that because it's impossible or should we try to estimate as best as we can? Because if we can put a value on that resource, then we can argue more strongly in favour of its preservation.

John Worsey: Right.

John Worsey: I met Professor Andy Thorpe.

John Worsey: Andy's specialism is development economics, which is all about researching growing economies.

Andy Thorpe: My area of research very generally has anything to do with development economics. So I work on fisheries, I worked on agriculture, I worked on climate change and then other things that purely interest me. Essentially, I mean, it's how economies grow. What do you need to ensure that economies grow much faster? We'll often look at human capital.

John Worsey: Andy gave us a few examples of countries in this kind of category.

Andy Thorpe: You look at the Asian economies. One reason why they've grown so rapidly, it suggests, is because they've been very fortunate to have an education system that's been prioritised and that's enabled human capital development and clever individuals being more productive individuals. We look at other regions, too, and you look at the Arab countries, for example, and you find that, you know, one reason why they've grown so quickly and such high incomes per capita is because of natural resources.

John Worsey: Countries whose economies are growing might be rich in natural resources that are pivotal to their economic wealth. But Andy explained how this can sometimes be a barrier to finding other sources of economic growth.

Andy Thorpe: Oil, for example, is very important to places like Kuwait. The only problem with it, of course, is that everybody wants to work in oil.

John Worsey: Right.

Andy Thorpe: So you tend to find that oil tends to crowd out any other type of economic activity. And they refer sometimes to there being a 'resource curse'.

John Worsey: Focussing on one source of economic growth and lacking a diverse economy is the problem here.

Andy Thorpe: It's referred to sometimes as Dutch disease because happened in the 1970s when the Dutch discovered natural gas and the same problem there with that Dutch guilder appreciated it meant that most of the other exports in Holland declined.

John Worsey: But in economics, Andy says it's about looking at the bigger picture. Perhaps that's easier said than done when governments are under pressure to meet short term needs and win elections.

John Worsey: So it sounds like it's -- it's always something where you have to take into account the bigger picture in terms of all the various factors that might influence how well that area of the economy is doing.

Andy Thorpe: So, yeah, it's something that we do in economics and essentially say, as a matter of course, that you look at all the factors that may entrench us and why a country develops in certain ways, why senators develop in certain ways and try to disentangle the impacts of change in, for example, in the case of education, should we be spending more on school books? Should we be spending more on teachers? Or should we be giving everyone An Ipad themselves, which will inevitably expansion?

John Worsey: Interesting stuff. It helps that Andy has a real love for economics and a personal interest in the subjects he works on like fisheries.

Andy Thorpe: Since coming back from Honduras in the mid-1990s, I sort of developed an interest in sort of fisheries policy.

John Worsey: Right.

Andy Thorpe: And that's led to a number of commissions from most recently, FAO, the Food and Agricultural Organisation asked me to put a total economic value on the world's and in fisheries, which was interesting because, as I said, nobody's ever done it. The reason they haven't done it is because if you want to value in a fishery, you need to know every single fish that's been caught and the price of those fish that were caught. And if they've been used for self consumption, then you've got to put a value on that. And that's really impossible. But there again, should we ignore something that because it's impossible, should we try to estimate as best as we can? Because if we can put a value on that resource, then we can argue more strongly in favour of its preservation.

John Worsey: Right.

Andy Thorpe: What was most notable, shall we say, is that the-- in terms of the value in fisheries as a value of recreational fishers, recreational fisheries are very, very big in the United States.

John Worsey: Right.

Andy Thorpe: And it accounts for almost half of the other total global value of our fisheries.

John Worsey: Andy observed the impact of fisheries upon the economies of developing nations. And it was this that inspired this area of his research. Since then, he's found out tons about the economic history of areas like Kyrgyzstan, a mountainous and landlocked country in Central Asia, and encountered a few contradictions.

Andy Thorpe: There's a lake there, which is, uh, 6,200 square kilometres. And it's a very, very interesting history because you go back to the early 20th century when it was essentially an ad hoc fisheries experts refer to as trash fish and small daste-type fish. The Soviets decided that they could, should we say, improve the value of the fisheries. So they introduced predators.

John Worsey: Right.

Andy Thorpe: In particular, the lake seven trout from Armenia. The unfortunate problem was a seven trout plus the other, sort of, zander that they introduced tended to eat most of the small fish.

John Worsey: Yes.

Andy Thorpe: And what they hadn't realised was that trout if they-- when they reproduce, they spawn in rivers. So they travel and swim up the rivers. And so it became very easily for locals to just put nets across the river and net them. So the fishery really collapsed and so it's really quite funny when I went out there for a 10 day visit in 2007, that was the first international fisheries expert for almost 20 years.

John Worsey: Right.

Andy Thorpe: And they said, you know, I need to work on fisher livelihoods. And so I said, ok. I arrived in country, they said we're going off to Lake Issyk-Kul. I said, great. Can I speak to fishers though? They go, no. I said, well, why not? They said, well, because there's a moratorium on fishing in the lake. Okay, so I'm here to work on fisher livelihoods, but there's no fishermen. So we got another lake. That's ok, so how big's that? Well, it's not 6,200 square kilometres, it's 250 square kilometres, Lake Song-Kul. It's right up to about 2000 metres above sea level. Oh, great. Can we go talk to fishers there? No, they went. So let me guess, you've found fish in there too?

John Worsey: Yeah.

Andy Thorpe: Oh, one had to go back to, shall we say, the basic information they got and the number of water bodies, the history of the water bodies, the stock in historically of the water bodies because they didn't stock during the Soviet times. Unfortunately, when the Soviet Union collapsed, it was uneconomic to stock the fisheries. So most of the hatcheries also crumbled and sharply reduced.

John Worsey: To Andy, fisheries present a way into examining the impact of wider issues in a culture. Outside of his work in Kyrgyzstan and Honduras, he's looked at the effect of political events on the economy in Sierra Leone. This involved a little more detective work to build up a story.

Andy Thorpe: Countries I tend to work in I think-- yeah, I've worked in Sierra Leone too, for example.

John Worsey: Right, gosh, ok.

Andy Thorpe: There historically was, you know, there was a civil war for 10 years and the Fisheries Ministry got burned down. So all the data on frame surveys and fisheries statistics disappeared. So again, you were starting from scratch and trying to cobble a story together of what happened and how you can improve the fisheries.

John Worsey: I asked Andy if he'd always been drawn to working in changing or volatile environments.

Andy Thorpe: I've always been, shall we say, somewhat more unconventional. I mean, when I was young, what for me, the two weeks package holiday to Spain, I'd go off and hitchhike around Europe for two, three months. So doing different things in different places, particularly where they didn't speak English was always quite exciting.

John Worsey: His curiosity for exploring different cultures and the impact of those cultures on their economies is what drives Andy's research. But how is this actually making a difference in the developing world? He explained how his work in Sierra Leone was able to make an impact.

Andy Thorpe: We recommended that the ministry ban plastic fishing nets because of the devastating fishing grounds. The ministry, from what I gather, took us up on that.

John Worsey: Yeah.

Andy Thorpe: I tend to be somebody I will listen carefully to everybody then go away and I over time sit down and chew -- chew the cud, as it were, and come up with what I think or how we should move and then propose ideas to see if the stakeholders like them.

John Worsey: And what about further afield? Andy told us about his observations in Latin America.

Andy Thorpe: Latin America, I mean, what we did there was a much more research-oriented paper and we looked at the impact, the new economic model on fishery developments, and we argued that it would lead into overexploitation of fishery stock because...

John Worsey: What's the new economic model...?

Andy Thorpe: The new economic model was a sort of neoliberal economic model where it was sort of Thatcherism for the developing world and it had many positives. But in, shall we say, environmental terms, one of the big problems is that they reduce import taxes. So governments like the Argentine government suddenly import a lot of new, rather large fishing vessels and as a consequence put them out to sea. They privatised the sector, so therefore they had no control really over it. And so as a consequence, you saw massive expansion in landings.

John Worsey: Right.

Andy Thorpe: Yeah, to the detriment, shall we say, of the underlying fish stocks.

John Worsey: As well as exploring the wider behaviour of an economy through fisheries, Andy hopes the huge amounts of data he's collected will make the point that fisheries are intrinsically valuable to economies. For him, being able to explore diverse areas of the developing world is an essential part of building the next generation of economic minds.

Andy Thorpe: I've had the freedom, the opportunity with very good heads. Who've allowed me to do the work I prefer to do in the developing world, and I do enjoy teaching because I teach and lot the development type units.

John Worsey: Thanks to Andy for talking to us and thanks to you for listening to Life Solved from the University of Portsmouth.

John Worsey: You can find out more about the work of Andy and his team as well as our other projects by going online to port.ac.uk/research. If you want to share your thoughts on this programme, you can follow us on social media and share using the hashtag Life Solved.

John Worsey: Next time we speak to the team whose work helping children recover from bone cancer led them to develop innovative 3D printing approaches. We'll hear how these are giving amputees knee and hip patients longer-lasting treatment.

Gordon Blunn: This is about the implant staying in place. The reason that's important, of course, is some of these patients are really very young. So we need these implants to stay in place for as long as possible.

John Worsey: Make sure you subscribe in your podcast app to get every episode of Life Solved automatically. And please do tell us what you think with the review and rating if you get a moment. From the team in Portsmouth, thanks for listening. We can't wait to share another fascinating discovery next time.

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