Nov 16, 2010

Equatorial Guinea

Equatorial Guinea's GDP per capita (PPP) in 2009 was of $37,500.That is right between Canada and Belgium, according to the CIA. This is thanks to booming oil exports since the 1990s. Yet half the population live with less than a dollar a day,  life expectancy is of only 60 years and education expenditure is at 0.6% of GDP, the lowest level in the world. How is this possible when oil exports amount to about a barrel per person per day, or $80?

As Gylfason and Wijkman write on Vox, only one man gets all the cash: "President Obiang has governed Equatorial Guinea since 1979, having been re-elected a few times with 98% of the vote... State-operated radio declared President Obiang to be a god who is in permanent contact with the Almighty and can decide to kill without anyone calling him to account and without going to hell".

In 2004, a crazy British aristocrat built an army of mercenaries and tried to take control of the country and its oil. The coup d'├ętat was an utter failure (a movie based on "The Wonga Coup" is due to come out next year). But imagine if a benevolent dictator overthrowed the government and distributed the wealth equally. Half a million people would suddenly earn $30,000 a year. That would be quite a natural experiment!

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