Resource-rich countries tend to experience slower economic growth and more social problems than do less-endowed countries—a phenomenon dubbed the “resource curse.” But it turns out that in many cases, economic growth begins to underperform long before the first drop of oil is produced; this we call the “presource curse.”
Resource-rich Latin American countries did experience high rates of economic growth and diminished poverty and inequality during the boom years. On the surface, this would appear to strengthen arguments that extractive industries are key to progress, especially in resource-rich areas, despite their negative environmental impact. Nevertheless, a closer look shows that things are a bit more complicated.
As the largest resource-for-infrastructure deal ever reached at the time of its signature, the Sicomines case has generated much controversy in Kinshasa, Beijing, and Western capitals alike. It is so large in scale that its value exceeded the Congolese state budget the year it was signed.
What’s next for Latin American civil society as the supercycle of high commodity prices recedes in the rear-view mirror? And what are the most interesting trends in the extractives sector in the region?
Last year’s meeting in Cape Town was overshadowed by pessimism in the wake of tumbling commodity prices and organizers tried to boost morale by encouraging participants to look “beyond the cycle.” But this year the buzz word for multilaterals was sustainability.
Despite an overall positive trajectory, Guinea's citizens have not yet fully benefited from the country’s natural resources. This is largely due to poor governance performance in the past, as well as some lingering challenges.