Black Gold and Black Death

Everyone has got their panties up in a bunch over oil nowadays. Environmentalists like Al Gore are finally complaining about its burning on our environment (even though he never actually did anything about anything while he was still the Vice President...). OPEC nations are bitching about profits and tightening their valves (causing those of the rest of the oil-dependent world to tighten our belts). And bandwagon know-it-alls (yeah, you North American teenage boys who think you've got everything figured out) are hating on Bush for starting a Vietnam-esque war over in the Middle East for oil. Everybody loves oil.
Here's another problem to tack onto oil that's probably not nearly as obvious: the poverty and desperation of LDCs can also be linked to oil and the greedy buggers in the market. Something I learned about in Economics from Mr. P. Messere that I found extremely interesting was what are called "Petrol Dollars". What happened was, when the OPEC nations struck it big a few decades ago, there were huge profits for a very small number of fortunate individuals. Fearing economic and political instability to which those nations are generally prone to, these vast fortunes were deposited in foreign financial institutions (i.e. American banks). With such huge inflows of capital (economics babble for moolah) and nowhere for it to be spent, these banks grew promiscuous and daring in their lending to other countries. This ultimately led to a huge boom in borrowing done by LDCs that went towards paying for consumption rather than development/investment.
What happens when you spend all your money on, say, food and going to movies with friends? You're left with no money left for more... lasting pleasures (like a pair of socks or an external hard drive!). Similarly, countries like Mexico and some South American nations borrowed tons on money and spent it in ways that would not pay off much in the long run (eg: buying an ass-load of strawberries sure is tasty, but buying a tractor to farm them will yield more results in the long run). So what happens when the debt matures and it comes time to pay up? There are no more strawberries. Now we get governments forced to cut back spending (goodbye welfare and social strawberry programs) and even screwed to the point of defaulting on debts (which effectively screws over future prospects for getting new loans).
Oil seems to do a lot of cool stuff (like fry my bacon and stuff) but has really caused a lot of problems for people all over the world. If you haven't caught on already, I'm trying to get myself in the Economics exam writing mood, and I'm starting with the more interesting section of Development Economics. I've got to write this beast of an IB exam in about 2 or 3 weeks. I don't want to get raped. I also don't want to do bad on the exam. O.o