Blog #1 - comparative advantage? or is it?

Nigeria’s main export is petroleum and petroleum related products, which makes up 90% of the countries main export. Its main trading partners are the United States (49.7%), Brazil (10.4), and Spain 7.6%). With Nigeria’s economic relationship with the United States, Nigeria has comparative advantage. This is because it’s main export, crude oil, is a raw material and needs to be refined in order for it to be acceptable for use. Nigeria doesn’t have the money and high-powered technological resources needed to process the oil.
Nonetheless, oil is a hot commodity so this country, as would any, believe it to be a blessing and the sure way to a quick buck. In later blogs, I hope to show that this blessing can also be a curse, in more ways then one. As much as one would like to believe, as highly praised and needed oil is, it does not necessarily mean wealth and riches. What should bring a developing country fortune and prosperity is clouded by corruption, greed, poverty, and violence. Getting back on track through, everything comes down to opportunity costs. Nigeria has a lower opportunity cost for oil because it takes less time for them to produce one unit of oil, then it would to take the United States. As for nigeria’s trading partners, the United States has a comparative advantage in the production of refined petroleum because she forgoes little or nothing in refining oil while the opportunity cost of refining oil locally is a brand new refinery which would cost billions of dollars. So Nigeria is ridiculously better off importing refined petroleum.
The country’s main import is machinery (in order to refine its crude oil), along w/ agriculture, which it has seemed to abandon b/c oil is highly valuable and profitable. In regard to Nigeria’s import, the country in which it imports from has a comparative advantage, because they are able to sell their products (machinery) to Nigeria, but they must produce it there, which is more expensive on their part, because labor costs are considerably cheaper in Nigeria. For Nigeria in terms of imports, Nigeria has neither a comparative or absolute advantage because, because they cannot produce usable oil alone since they do not have the technological resources to do so. Also, by importing machinery, (mainly from great Britain), they are not obtaining any gains.
It is clear that Nigeria has the ability to easily and readily obtain and supply oil, but they lack the high-technological equipment needed to refine it. Even though they are not necessarily winning from importing goods in order to sell their oil, oil is money, especially to Americans who love to drive their SUV’s to “cruise the strip” and what-not. As I have said earlier, Nigeria seems to win either way, but at what price will they pay and for how long will their luck run? With they take the gamble to jeopardize the swamps of the Nigerian Delta, which is one of the world’s largest wetlands? Will they keep the 60% of Nigerians living in poverty to continue living in poverty? Will they ignore their agricultural exports completely and leave their farmers to shake their head? Who will decide when enough is enough? I suppose we will see, when we drive past a gas station, and see the price of gasoline sky-rocketed. Oil is the source of money, but is also the source of hardship and corruption.