For poor developing countries, exploiting natural wealth such as minerals and metals should prove a blessing, offering the potential to generate huge revenues and help lift them out of poverty. Instead many have been inflicted by the “natural resource curse”, in which countries with an abundance of natural resources enjoy less economic growth and worse development outcomes than those endowed with less of Nature’s bounty.
Despite efforts to improve governance and oversight related to extractive industries projects, the natural resource curse persists today. A recent WRI, Oxfam and Bank Information Center report shines the spotlight on the Camisea natural gas p roject in Peru and highlights the importance of investing in sub-national governance and capacity building before scaling up investments in natural resource projects.
$1 billion in gas revenue, but poverty remains
The findings of the report, People, Power and Pipelines, as described in this article, have implications not only for extractive industry projects, but also for forest management in developing countries. In particular, international financial institutions, national governments and other stakeholders involved in REDD – that seek to reduce emissions from deforestation and forest degradation – should learn from the mistakes of extractive projects and avoid unleashing their own resource curse.