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

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  • Breisinger, Clemens
  • Thurlow, James

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.

Suggested Citation

  • Breisinger, Clemens & Thurlow, James, 2008. "Asian-driven Resource Booms in Africa: Rethinking the Impacts on Development," IFPRI Discussion Papers 42351, CGIAR, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:ags:iffpr5:42351
    DOI: 10.22004/ag.econ.42351
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    References listed on IDEAS

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