The slums of Luanda, Angola. (image: img131.imageshack.us)

On Friday, NPR’s Planet Money team addressed the oil paradox: why do citizens of oil-rich nations so frequently live in poverty?

To illustrate the point, the team arranged a meeting between Gregory Scheidler, an oilman living in a $20,000/month apartment in a gated Angolan community, and Ningeeto, the 18-year-old who sells Mr. Scheidler chewing gum on the corner every morning. Ningeeto has no education, and as becomes apparent through their meeting, very much dislikes his job, but has no other options.

In Angola, one of Africa’s largest oil producers, 68 percent of the population lives below the poverty line. According to Herman Cohen, a retired US diplomat formerly based in Angola, the answer is simple: the state is behaving like a private company. Instead of focusing on schools, infrastructure, and the needs of its people, the government-owned oil company has a private airline and invests in other countries in an effort to expand its wealth.

And so exists the paradox of oil, or the “oil curse” as its sometimes called. Nations rich in natural resources, making money hand over fist exploiting these resources, leave their own people behind to fend for themselves.