To be the poor people of the rich land…

In the natural resource-rich lands of the earth, for centuries numerous tyrannies have been experienced from exploitation to wars.

In many of these territories, from Africa to the Middle East, from Latin America to the Far East, humanity has suffered, is suffering and will suffer from poverty in wealth.

Suffering from the remains of the past or the chaos still going on, could not able them to take their rights from their own lands full of various richness from fine gold to black gold.

It must bea kind ofresource curse!

Aside from the historical, political, and international dimension of this issue, there is also an aspect related with economy. The term “Resource curse" comes from that already. However according to the paradox known as “resource curse", the countries which became rich with natural resources, show a slower economic development –in general- compared with the poorer ones. (Exception as Norway doesn't break the rule. There are reasons for that, that's a different matter.)

When an upside-down slowing down news came from Nigeria last week, necessarily the term “cursed" came to my mind. On the other hand, while saying a part of Latin America was on the rocks, the sharp decline of the Brazilian economy was registered in the 2nd quarter.

When the commodity prices are high, the curse circle for the relevant countries charming natural resources came round at last

The curse circle of the charming natural resources when the commodity prices were high seems like it came round at last for the relevant countries.

In that case, when the effect of China is felt around, it will be reasonable to look at the data. The first letter of the rising BRICS is almost falling; there are some answers to this issue.

In my previous article, I had remarked that world exportation started the free fall in 2015. Brazil is also among those that are caught in this current… The exportation that is regressed 13.7 % in the 1st quarter, in the 2nd quarter had a 15.4 % decrease in the US dollar.

We are tired of hearing that China's slowing down caused trouble for the countries of commodities. As for Brazil, because of its close trade with China, such negativity comes into prominence.

That's why it is going to be useful to analyze the downtrend of Brazil in this context.

It is obvious that Brazil is a condensed commodity exporter…Let me animate: In the first 3 groups with the highest exportation there are soya, petroleum products and iron ore. Only these 3 items are going between ¼ and 1/3 of the total exportation. Meat takes the fourth place. Then come the machines and the motor vehicle groups, but the rest is again iron-steel, residue, sugar, coffee and so on.

Let's come to the effects of these goods. Exportation of the number 1, soya is on the decline in 2015, but let me point out that, it had a fluctuating situation before. If we look at what's going on this year, we understand that on a large scale the decline is because of soya going to China. But the reason of the decline in the 2nd quarter is the loss in the unit price, rather than the decrease in demand. However, in terms of the amount, China's soya demand from Brazil increased. Since there is a decrease in the prices, the result is on the downside. On the other hand, another common thing remarks that the Netherlands' soya demand decreased in amount.

Mineral fuel and oil take the second place: we could also say petroleum products. There is a sharp decline in this item, but not in the amount. Even the demand of China in the first rank increased. Therefore, almost halved prices are responsible for this as well. China has no (direct) guilt.

Iron ore as number 3 is a little different: It is affected by both the decline in demand and price. However, we see that China and especially Japan have been exporting ore in fewer amounts. And the strong price effect is dominant here as well.

These 3 groups explain just 10.4 points of the 15.4% of exportation reduction in the 2nd quarter. That's why, having drawn the general picture on a big scale, I will not go into the rest of the products.

If you ask “What is the effect of the countries on Brazil's exportation?" As China leads with -3.3 points, Netherlands has -2.4 points, the USA -1.3 and Japan has -1.2 points, Argentina, Venezuela, Korea and Italy follow them.

Well, what's the result then? Brazil, once as it used to increase its speed with the high commodity price and growing China, is now losing blood with the declining prices. Here, there is also the effect of China's “partial" demand decline, but global price reductions are more dominant.

Though China has a finger in the pie somehow, but we can say the result we reach is showing the resource curse.

However, one of the bases of the paradox is that; posing a risk, unsteady prices could hit the revenue… Another base is that; the resource-rich countries, relying on this power, enjoy themselves without working in many sectors, being unable to produce and compete.

From the Gulf countries to Russia, there are lots of examples for this one-winged vulnerability. Here, when we look at what Brazil is experiencing right now, we see the signs of this.

Moreover, as the exportation of Brazil increased in the second quarter, the Gross Domestic Product (GDP) data displayed that the economy showed the worst performance since the global crisis and declined 2.6% annually.

In the decline in question, the reduction in domestic demand plays a major role. However the investments in the country continue to lose blood. The economy revived, because the private consumption recently has lost that support as well.

As you see, the hopes are being lost on where Brazil is going to get power from in the short term. It will be quite difficult for the rapidly reducing economy to recover, and has to cope with the melting real and climbing inflation, increasing interest rates. Meanwhile, the people are in rebellion; Rousseff is living the nightmare.

While finishing, let's learn a lesson from this experience: It is known that the natural resources of our Turkey are limited and we have been suffering from this for a long time. Of course, we say we wish the situation hadn't been so. However, if we see the glass as being half full, this poverty also taught us how to produce.

This kept us away from the curse of the resources; if we had this, we would have been stuck into.

This pushed us to work, diversify, and grow by producing.

In order to be able to progress afterwards, there are two essential issues in front of us: Production/ closing our technologic and energy deficit.

And also, there is another issue in the depths; perhaps we should fix this before anything else.

You ask, “What is that?" Let me say: Our image deficit.