Innovate or die: How Canada is courting long-term failure [with resource development] – by Richard Poplak (Globe and Mail – April 14, 2012)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Richard Poplak is a Canadian writer currently based in Africa.

For policy wonks, this season’s equivalent of tween thriller The Hunger Games is a book called Why Nations Fail: The Origins of Power, Prosperity and Poverty. The pundits are giddy about its mixture of deep historical context and forehead-slapping common sense. Authors Daron Acemoglu and James A. Robinson, economists by day, insist that functional political institutions lead to successful economic institutions, and not the other way around.

Antagonizing libertarians, geographical determinists and the Ottawa chapter of Atlas Shrugs Rulz! alike, the authors claim that any smart economic policy will necessarily arise from an inclusive political system, where all is governed by rule of law, property rights are protected and hard work is rewarded by a paycheque subsequently taxed.

So far, a gold star for Canada (and a dunce cap for China) – until we slam into the following statement: “Sustained economic growth requires innovation, and innovation cannot be decoupled from creative destruction, which replaces the old with the new in the economic realm and also destabilizes established power relations in politics.”

Uh-oh. Welcome to the truth north strong and free, gentlemen: That would be the country where the Conservative government has bet the farm – and the factory, and the next-gen Internet start-up – on the fact that the resource-extraction sector, by which I mean Alberta, will power growth for the foreseeable future.

How foreseeable is this future? No two wonks can agree whether this gamble is smart, stupid or just meh. But take a random poll in one of Canada’s proliferating casinos: If you don’t want the house to fleece you before your first drink, it’s best to spread around your bets.

We’re in splendid company. Several weeks ago, I conducted an interview at the State House in Kinshasa, Democratic Republic of the Congo (the only accurate word in the country’s name being, of course, “Congo”). The special adviser to the President emphasized how vital the resource-extraction sector is to the country’s future. Twenty-four trillion bucks of awesomeness – the richest country on the planet – and everybody wants a piece: Dig, scrape, chop and watch the gross domestic product growth rate hit the stratosphere.

At present, the DRC boasts 3,000 kilometres of tarred roads. Its major cities have no road or rail links. Its coffers are empty. Its political institutions could generously be called nascent. Rule of law is a joke. Patronage is the presiding political ideology. There is, however, a desire to put half a century of banana republicanism and conflict in the rear-view mirror and join, say, Cambodia as a country on the rise.

To that end, one of the most desperate, least advanced countries in the world has come up with a plan that looks exactly like Canada’s.

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