stability in the policy and contract environment. This should not give rise to naïve optimism about extractive resource development. One long-standing observer has cautioned: “The problem is not the resources themselves. For countries that can manage, the curse is a myth. But this is not the case for poor, low-capacity countries—for them the curse can be real” (Gelb 2014, 11).
NOTES
1. The online version of the Sourcebook (www.goxi.org) provides links to many more studies on these matters than can be provided in this version. 2. Initiatives undertaken to foster infrastructure development include the African Union Commission and United Nations Commission for Africa joint initiative, Exploiting Natural Resources for Financing Infrastructure Development; the Organisation for Economic Co-operation and Development’s Perspectives on Global Development; and the “Guiding Principles” issued by the World Bank, which touch on the subject of mine-related infrastructure. A contribution has also been made by the International Finance Corporation and Public-Private Infrastructure Advisory Facility: Fostering the Development of Greenfield MiningRelated Transport Infrastructure through Project Financing (IFC 2013). 3. This subject is considered at length in a Sourcebook paper, “Resources Corridors: Experiences, Economics and Engagement: A Typology of Sub-Saharan African Corridors” (Mtegha et al. 2012). It considers in depth the cases of resource corridors in Mozambique, Tanzania, and the Democratic Republic of Congo. 4. An example is the dialogue involving the World Gold Council, the World Bank, and civil society partners, the conference “Gold for Development: Investing in Mining Indaba, 2012” (World Gold Council and World Bank 2012). The focus was on the contribution of large-scale gold mining to economic and social development, with case studies from Tanzania, Peru, and Ghana. The International Council on Mining and Metals (ICMM) has produced a number of reports summarizing its activities in this respect, such as the Minerals and Metals Management 2020 Report (ICCM 2012). 5. For example, the IMF has claimed that many resourcerich developing countries have failed to realize the full development potential of their natural resources. In a number of them, “economic growth has been disappointing” (IMF 2012). “Many resource-rich countries disappoint in their performance on economic and human development indicators” (IMF 2010, 4). As a result, the IMF has increased its technical support to governments to develop an improved in-house resource management capability on fiscal matters,
making 85 missions from 2006 to 2012, and planning dozens more (Smith 2012, 3). 6. The critical country attribute for purposes of the discussion that follows is resource dependency rather than absolute levels of resource wealth. Recent research suggests that states with high absolute resource endowments do tend to grow faster than those without. However, the same research finds a significant correlation between resource dependency and underperformance (Brunnschweiler and Bulte 2006). 7. It provides a driver for civil society assistance, evident in, for example, Copper Bottomed? Bolstering the Aynak Contract: Afghanistan’s First Major Mining Deal (Global Witness 2012a); and Donor Engagement in Uganda’s Oil and Gas Sector: An Agenda for Action (Global Witness 2010). 8. For example, in the academic literature see van der Ploeg 2016; Ross 1999; Bannon and Collier 2003; McPherson and MacSearraigh 2007; and Berman et al. 2014. For NGO views, the following reports from Global Witness are not atypical of the tone: Curse or Cure? How Oil Can Boost or Break Liberia’s Post-War Recovery (2011); and Rigged? The Scramble for Africa’s Oil, Gas, and Minerals (2012b). This has provoked various ripostes, such as Luong and Weinthal (2010), Oil Is Not a Curse: Ownership Structure and Institutions in Soviet Successor States. 9. The high point in support for the negative view is probably an influential article by Sachs and Warner (2001), “Natural Resources and Economic Development: The Curse of Natural Resources.” The more recent approach (against the inevitability of the resource curse) is evident in IMF (2010, 6), “Macroeconomic Policy Frameworks for ResourceRich Developing Countries,” which notes, “A natural resource ‘curse’ is neither universal nor inevitable; growth may depend heavily on other factors, such as policies and the quality of institutions.” The latter is also represented by Lederman and Maloney (2007), Natural Resources: Neither Curse nor Destiny, which through a series of case studies argues that resource wealth, if coupled with appropriate institutional and policy choices, can be a significant advantage in achieving long-term economic growth. 10. An example of an industry initiative that has this goal is the ICMM Resource Endowment Initiative in mining. It developed an analytical framework and focused on governance processes, incorporating underlying factors and rules of the game that affected social and environmental interactions and outcomes. The result was a practical toolkit to assess local, regional, and national socioeconomic impacts of mining. It also addressed the ways in which mining operations affect governance structures, institutions, and policy changes at different levels of government. Find more on the initiative at http://www.icmm.com/page/84152 /our-work/projects/articles/resource-endowment-initiative.
CHAPTER 2: Extractives: Opportunities and Challenges for Development
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