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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," Conference papers 331703, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331703
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    File URL: https://ageconsearch.umn.edu/record/331703/files/3827.pdf
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    References listed on IDEAS

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