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

Clemens Breisinger and James Thurlow

No 42351, IFPRI Discussion Papers from CGIAR, International Food Policy Research Institute (IFPRI)

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: International Relations/Trade; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 36
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iffpr5:42351

DOI: 10.22004/ag.econ.42351

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