Asian-driven Resource Booms in Africa: Rethinking the Impacts on Development

Clemens Breisinger and James Thurlow

No 331703, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: Today’s resource boom in Africa, driven by Asian economic growth, offers new opportunities for resource-rich African countries. Contrary to the experience of previous booms, however, most mining profits now accrue to foreign companies, leaving little room for governments to use revenues for pro-poor investments or to mitigate adverse distributional impacts. Taking Zambia as a case study, this paper shows that despite privatization, Dutch disease remains a valid concern and may hamper economic diversification, worsen income distribution, and undermine poverty reduction strategies. Mining royalties must, therefore, be increased and used to finance growth-inducing investments that encourage pro-poor economic diversification, else many African countries will remain caught in a resource trap.

Keywords: Resource/Energy Economics and Policy; Food Security and Poverty (search for similar items in EconPapers)
Pages: 25
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:331703

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