Global Diary

Africa’s V — Valuable Resources

Are natural resources a curse or a blessing to African nations?

Are natural resources a curse or a blessing to African nations?

Takeaways


Mostly natural resources have the same effect on a national economy as a drug. They are "easy" sources of income to capture, especially compared to other economic activities, such as the agricultural or manufacturing sectors.

Such easy money more often than not breeds corruption. Why? Because the cash flow is usually wholly, or partially, controlled by government officials.

The world's most successful development stories of the past century are found in countries which are actually lacking in "valuable" natural resources: Japan, Korea, Hong Kong, Taiwan, Singapore.

There, the lack of natural resources — as well as external military threats — had a powerful impact on advancing the national economic effort.

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About Guy Pfeffermann

Guy Pfeffermann is the Founder and CEO of the Global Business School Network. He was formerly the chief economist of the IFC. Follow him @GPfeffermann

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