BREAKING THE CURSE IN AFRICA
DO NATURAL RESOURCES automatically lead to poor economic outcomes? Bingu wa Mutharika, economist and former President of Malawi, once said: Africa is not a poor continent; but the people of Africa are poor. Among others, modernization, dependency and the big-push theories explain economic backwardness in Third World countries. Despite unprecedentedly high prices of natural resources in the past few decades, resource-rich jurisdictions are home to over 60% of the world’s poorest people. Increasingly, the impact of natural resources on economic growth is a subject of intense debate. The importance of good governance in transforming natural resource endowments into good economic performance cannot be overemphasized. Simply put, decision makers should not see rents from natural resources as a source of finance for major public initiatives and recurrent expenditures; they should learn from countries that succeeded in escaping the curse by channeling resource rents towards productive investments. Click here to access the full paper.