Governments that wasted massive windfalls

[Tom Kirkman + 8,860]

Bullet point summary below, more details of each item in the link. 

Pretty amazing how often oil is the key windfall that got totally wasted by grossly incompetent and / or grossly corrupt governments.

 

Governments that wasted massive windfalls

Windfalls that fueled spending sprees and scandals

It's an all too common predicament – a government discovers massive reserves of oil or another natural resource, and proceeds to fritter away the money. Whether that’s through corruption or ill-judged government schemes, poor spending choices seem to go hand in hand with massive windfalls. Click or scroll through some cautionary tales of nations that wasted huge payouts from natural resources. All dollar values in US dollars unless otherwise stated.

⚫ Nauru's phosphate windfall: $1.2 billion

⚫ Zimbabwe's diamonds windfall: $2.2 billion

⚫ South Sudan's oil windfall: $4 billion

⚫ Chad's oil windfall: $13 billion

⚫ Equatorial Guinea's oil windfall: $45 billion

⚫ Trinidad and Tobago's oil windfall: $77 billion

⚫ Algeria's oil windfall: $99.2 billion

⚫ Azerbaijan's oil windfall: $100 billion

⚫ Canada's non-renewable resources windfall: $145 billion

⚫ Australia's mining boom windfall: $199 billion

⚫ The UK's oil windfall: $391.7 billion

⚫ Nigeria's oil windfall: $1 trillion

⚫ Venezuela's oil windfall: $1.3 trillion
The textbook example of how not to spend bewildering sums of oil money, Venezuela has gone from relative riches to rags despite having the largest proven reserves of the commodity in the world. From 1999 to 2013, the country's far-left government pulled in revenues of $1.3 trillion on the back of its prized resource.

This vast fortune was all but wasted. Grossly mismanaged, much of the cash disappeared due to corruption, while a significant proportion was funneled into ill-judged welfare programs. In spite of the eye-watering amount of money spent, poverty is rife in the country, which is in dire straits financially and socially.

 

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===================================

And so, Venezuela's Socialism and the inherent corruption which is part and parcel of Socialist governments wins the Darwin Award Prize for Wasted Massive Windfalls.

 

[Meredith Poor + 883]

In the meantime, Singapore and Hong Kong, with nothing more than slivers of land packed with people, have enormous per-capita incomes. The situation in Sweden and Switzerland is similar.

While there's no mention of Russia in this list, the combined Soviet Union/Russian Federation has wasted way more than Venezuela, although this is from the 1930's when Stalin began industrializing the country.

I'm not clear on how Canada wasted it's 'windfall'. Can someone explain this in more detail?

[Tom Kirkman + 8,860]

20 minutes ago, Meredith Poor said:

I'm not clear on how Canada wasted it's 'windfall'. Can someone explain this in more detail?

From the article:

The Canadian province of Alberta generated an estimated CA$190 billion (US$145bn) in non-renewable resource revenues from 1980 to 2013, with much of the money emanating from the province's Athabasca oil sands, which contain enormous deposits of bitumen or extremely heavy crude oil.

The Alberta Heritage Savings Trust Fund (HSTF) was set up in 1976 to save for a rainy day, bolster the province's economy and improve the life of its citizens, yet in 2013 the value of the fund was just CA$17.3 billion (US$13.2bn/£10.1bn). Instead of putting the revenue cash aside, successive Albertan governments channeled most of the money into capital projects and operational expenses. 

[Meredith Poor + 883]

6 hours ago, Tom Kirkman said:

The Alberta Heritage Savings Trust Fund (HSTF) was set up in 1976 to save for a rainy day, bolster the province's economy and improve the life of its citizens, yet in 2013 the value of the fund was just CA$17.3 billion (US$13.2bn/£10.1bn). Instead of putting the revenue cash aside, successive Albertan governments channeled most of the money into capital projects and operational expenses. 

I visited some friends in Alberta in 2015, flying into Edmonton and meeting them in St. Paul. The highways were in pretty bad shape - I don't know if that's an Albertan responsibility or a federal one. One thing I am aware of is a settlement among 'First Nations' and Metis peoples on the one part and the Canadian government on the other, which is part of a settlement for past injustices.

Alberta is an enormous province with a bit more than 4 million people. It's most likely an expensive place to maintain infrastructure.

[Jan van Eck + 7,558]

7 hours ago, Meredith Poor said:

I'm not clear on how Canada wasted it's 'windfall'. Can someone explain this in more detail?

Canada has lots of "windfalls," starting with the vast nickel mine up in Sudbury, Ontario, and then over to the aluminum smelting operation in the Saguenay, Quebec,  and over to lumber in New Brunswick and British Columbia, and electricity from just about all the Provinces.  What these windfalls do is allow the various government levels to spend to fulfill voter desires, without having to tax the voters to pay the full costs thereof.  If you have a champagne taste but a beer budget, then the way to go is to tap into the royalty revenues from these windfalls. 

Spending more than the govt takes in is a common enough failing, as Tom points out in the case of Venezuela.  Moving past the partisan hype, ultimately even governments have to balance the books, unless you are going to print the money.  For Canada, the balancing is done on the backs of the extractors of resources, be they lumber, nickel, oil, or even electricity.  And keep in mind that perhaps $40 billion of Alberta's oil wealth was siphoned off to pay for "equalization payments," basically a grandiose form of Federal welfare paid to the other provinces, mostly to Quebec, as a bribe to not leave Confederation.  Oh, well. 

[Jan van Eck + 7,558]

Interesting that I do not see the DRC  ["Congo"} on that List.  Given that the Congo previously had the Southwest province of Angola as a resource-rich area, you would have to assume that a lot of the Congo's wealth was frittered, not only the part that the Belgians flat-out stole,  but also the parts that Patrice Lumumba stole.  Many many billions were lost. 

[Enthalpic + 1,496]

9 hours ago, Tom Kirkman said:

From the article:

The Canadian province of Alberta generated an estimated CA$190 billion (US$145bn) in non-renewable resource revenues from 1980 to 2013, with much of the money emanating from the province's Athabasca oil sands, which contain enormous deposits of bitumen or extremely heavy crude oil.

The Alberta Heritage Savings Trust Fund (HSTF) was set up in 1976 to save for a rainy day, bolster the province's economy and improve the life of its citizens, yet in 2013 the value of the fund was just CA$17.3 billion (US$13.2bn/£10.1bn). Instead of putting the revenue cash aside, successive Albertan governments channeled most of the money into capital projects and operational expenses. 

Ralph Klein wasted so much money and yet people here still think of him fondly.

I spent most of my free money on beer.

https://en.wikipedia.org/wiki/Prosperity_Bonus

[Ward Smith + 6,615]

1 hour ago, Enthalpic said:

Ralph Klein wasted so much money and yet people here still think of him fondly.

I spent most of my free money on beer.

https://en.wikipedia.org/wiki/Prosperity_Bonus

Alaska has been sharing the wealth for decades, with no ill effects. No reason Alberta couldn't have done the same all along. 

[Wombat + 1,028]

17 hours ago, Tom Kirkman said:

Bullet point summary below, more details of each item in the link. 

Pretty amazing how often oil is the key windfall that got totally wasted by grossly incompetent and / or grossly corrupt governments.

 

Governments that wasted massive windfalls

Windfalls that fueled spending sprees and scandals

It's an all too common predicament – a government discovers massive reserves of oil or another natural resource, and proceeds to fritter away the money. Whether that’s through corruption or ill-judged government schemes, poor spending choices seem to go hand in hand with massive windfalls. Click or scroll through some cautionary tales of nations that wasted huge payouts from natural resources. All dollar values in US dollars unless otherwise stated.

⚫ Nauru's phosphate windfall: $1.2 billion

⚫ Zimbabwe's diamonds windfall: $2.2 billion

⚫ South Sudan's oil windfall: $4 billion

⚫ Chad's oil windfall: $13 billion

⚫ Equatorial Guinea's oil windfall: $45 billion

⚫ Trinidad and Tobago's oil windfall: $77 billion

⚫ Algeria's oil windfall: $99.2 billion

⚫ Azerbaijan's oil windfall: $100 billion

⚫ Canada's non-renewable resources windfall: $145 billion

⚫ Australia's mining boom windfall: $199 billion

⚫ The UK's oil windfall: $391.7 billion

⚫ Nigeria's oil windfall: $1 trillion

⚫ Venezuela's oil windfall: $1.3 trillion
The textbook example of how not to spend bewildering sums of oil money, Venezuela has gone from relative riches to rags despite having the largest proven reserves of the commodity in the world. From 1999 to 2013, the country's far-left government pulled in revenues of $1.3 trillion on the back of its prized resource.

This vast fortune was all but wasted. Grossly mismanaged, much of the cash disappeared due to corruption, while a significant proportion was funneled into ill-judged welfare programs. In spite of the eye-watering amount of money spent, poverty is rife in the country, which is in dire straits financially and socially.

 

===================================

===================================

And so, Venezuela's Socialism and the inherent corruption which is part and parcel of Socialist governments wins the Darwin Award Prize for Wasted Massive Windfalls.

 

Haha, Australian windfall was not wasted. It went into income tax cuts, health expenditure, and new infrastructure. What is more, we have budget surplus, minimal net govt debt, and mining boom just beginning. We have copious amounts of Uranium, Lithium, Gold, Rare Earths, not just Iron Ore, Coal, and LNG!

[Wombat + 1,028]

15 hours ago, Tom Kirkman said:

From the article:

The Canadian province of Alberta generated an estimated CA$190 billion (US$145bn) in non-renewable resource revenues from 1980 to 2013, with much of the money emanating from the province's Athabasca oil sands, which contain enormous deposits of bitumen or extremely heavy crude oil.

The Alberta Heritage Savings Trust Fund (HSTF) was set up in 1976 to save for a rainy day, bolster the province's economy and improve the life of its citizens, yet in 2013 the value of the fund was just CA$17.3 billion (US$13.2bn/£10.1bn). Instead of putting the revenue cash aside, successive Albertan governments channeled most of the money into capital projects and operational expenses. 

Australian "Future Fund" now worth $280bn, and has barely started!

[Wombat + 1,028]

17 hours ago, Tom Kirkman said:

Bullet point summary below, more details of each item in the link. 

Pretty amazing how often oil is the key windfall that got totally wasted by grossly incompetent and / or grossly corrupt governments.

 

Governments that wasted massive windfalls

Windfalls that fueled spending sprees and scandals

It's an all too common predicament – a government discovers massive reserves of oil or another natural resource, and proceeds to fritter away the money. Whether that’s through corruption or ill-judged government schemes, poor spending choices seem to go hand in hand with massive windfalls. Click or scroll through some cautionary tales of nations that wasted huge payouts from natural resources. All dollar values in US dollars unless otherwise stated.

⚫ Nauru's phosphate windfall: $1.2 billion

⚫ Zimbabwe's diamonds windfall: $2.2 billion

⚫ South Sudan's oil windfall: $4 billion

⚫ Chad's oil windfall: $13 billion

⚫ Equatorial Guinea's oil windfall: $45 billion

⚫ Trinidad and Tobago's oil windfall: $77 billion

⚫ Algeria's oil windfall: $99.2 billion

⚫ Azerbaijan's oil windfall: $100 billion

⚫ Canada's non-renewable resources windfall: $145 billion

⚫ Australia's mining boom windfall: $199 billion

⚫ The UK's oil windfall: $391.7 billion

⚫ Nigeria's oil windfall: $1 trillion

⚫ Venezuela's oil windfall: $1.3 trillion
The textbook example of how not to spend bewildering sums of oil money, Venezuela has gone from relative riches to rags despite having the largest proven reserves of the commodity in the world. From 1999 to 2013, the country's far-left government pulled in revenues of $1.3 trillion on the back of its prized resource.

This vast fortune was all but wasted. Grossly mismanaged, much of the cash disappeared due to corruption, while a significant proportion was funneled into ill-judged welfare programs. In spite of the eye-watering amount of money spent, poverty is rife in the country, which is in dire straits financially and socially.

 

===================================

===================================

And so, Venezuela's Socialism and the inherent corruption which is part and parcel of Socialist governments wins the Darwin Award Prize for Wasted Massive Windfalls.

 

I suppose u got that list from "The Economist" magazine? They are a bunch of leftie wankers that know nothing about international economics. To put Australia in the same basket as Venezuela is truly absurd.

[Douglas Buckland + 6,308]

Regardless of who wasted what, the oil industry, not inept or corrupt governments, will be blamed for it...

[Boat + 1,315]

22 hours ago, Meredith Poor said:

In the meantime, Singapore and Hong Kong, with nothing more than slivers of land packed with people, have enormous per-capita incomes. The situation in Sweden and Switzerland is similar.

While there's no mention of Russia in this list, the combined Soviet Union/Russian Federation has wasted way more than Venezuela, although this is from the 1930's when Stalin began industrializing the country.

I'm not clear on how Canada wasted it's 'windfall'. Can someone explain this in more detail?

It’s so cold they burn the money for fuel. FF’s have to much pollution.

[SERWIN + 749]

On 1/26/2020 at 11:04 AM, Tom Kirkman said:

From the article:

The Canadian province of Alberta generated an estimated CA$190 billion (US$145bn) in non-renewable resource revenues from 1980 to 2013, with much of the money emanating from the province's Athabasca oil sands, which contain enormous deposits of bitumen or extremely heavy crude oil.

The Alberta Heritage Savings Trust Fund (HSTF) was set up in 1976 to save for a rainy day, bolster the province's economy and improve the life of its citizens, yet in 2013 the value of the fund was just CA$17.3 billion (US$13.2bn/£10.1bn). Instead of putting the revenue cash aside, successive Albertan governments channeled most of the money into capital projects and operational expenses. 

And yet, if they had invested the money in something stable they would today be reaping the returns on said investments. A lot of money coming in to help with the day to day expenses of the country. It is to be expected though. The US government pissed all the monies collected for social security and has nothing to show for it. Such a shame

[Zhong Lu + 845]

But countries aren't people.  Countries literally can't waste money anymore than a house or a tree can.  What's happening instead is that individuals in these countries are taking the money for themselves.  From their perspective, they're NOT wasting the money because they're using it to guarantee the welfare of themselves and their family.  

"If others are going to steal it anyways, I may as well steal it first."  Etc. etc.

Edited February 1, 2020 by Zhong Lu

[Zhong Lu + 845]

Point is: groups of people cannot be judged like the way we judge individuals.  It would not be accurate.  For example, I could say "Bob is a loser because he blew all his money on crack cocaine and heroin, and thus he became poor."   This would be a perfectly fine and accurate statement.  But when we extend that mindset to entire groups of people (i.e. countries) the analogy breaks down.  These countries aren't WASTING money like the way Bob the individual might waste his money on crack and heroin.  Instead, what's happening is individual people in these countries are STEALING the oil money for the sake of themselves, their tribe or family at the expense of everyone else on the logic that "if I don't take the money for myself, others will steal it, so I may as well take it first."  

EDIT: Then with this money they can buy off any credible opposition (the other groups with guns and artillery).  The average slum scum don't matter.  

Edited February 2, 2020 by Zhong Lu

[Zhong Lu + 845]

Also most of the "countries" listed above aren't even countries.  Most of them are just a bunch of random tribes.  Then they got colonized by the Brits and the French, and the Brits and French were like "for administrative purposes let's lump all of these tribes that hate one another into a single country, willy nilly, 'cuz all Africans are the same."

So when the Brits and the French left and they discovered oil in these areas at about the same time guess what happened next???? 

Edited February 2, 2020 by Zhong Lu