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Resource curse is a misnomer: achieving resource blessing is the future

- By: John P Sykes
Posted in: Blog, Media, Mineral Economics, Mineral Policy, Mining, Publications


Catching up on May’s Strictly Boardroom articles on by myself and Allan Trench (The University of Western Australia) the first article of the month tackles the ‘resource curse’. The article entitled “Resource curse is a misnomer: achieving resource blessing is the future” looks at contradictory data on the subject produced by the World Bank.

When looking at the four regions of the world as classified by the World Bank – high income (e.g. Australia), upper-middle income (e.g. China), lower-middle income (e.g. Indonesia), and low income (e.g. D.R. Congo) we find that the majority of the world’s mineral rents are generated in upper-middle income and high income countries, rather than lower-middle income and low income countries as is sometimes supposed – the idea that many poor countries are ‘resource rich’ but cursed by these resources. Looking at the mineral rents on a per capita or per unit land basis only confirms the findings with high income countries on average generating the most mineral rents per head of population or unit area of land. The rich world does more mining than the poor world.

What is clear however, is that low income countries are much more dependent on mineral rents as a total share of their economies. As such, these countries are ‘resource dependent’ rather than ‘resource rich’, with a weak mining sector, in effect, the better part of an overall weak economy. The focus therefore should be both on improving the mining sector – to rich world standards over the long term, and in using mining to help stimulate the broader economy by increasing stability, skills, tax revenues and investment.

The article is available to subscribers on Or contact me for a copy.

For keen followers of the Strictly Boardroom column, our book “Strictly (Mining) Boardroom Volume II: A Practitioners Guide for Next Generation Directors” was published last year and is available as a paperback or e-book from Major Street Publishing or Amazon. We’re pleased to say that the book received a very positive review in the AusIMM Bulletin.