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Resource Curse Critique

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Resource Curse Critique
‘May God Give Us Chaos, So That We May
Plunder’:
A critique of ‘resource curse’ and conflict theories

by Kuntala Lahiri-Dutt

[This paper was originally published in the journal Development, vol ume 49, issue 3, 2006: Conflicts Over Natural Resources, published by the Society for International
Development.]


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  • YES TO LIFE
    AGRICULTURE & ECO TOURISM
    No to mining in Palawan AND other
    Key Biodiversity Areas (KBAs)
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  • Ang yaman ng Palawan ay yaman ng Pilipinas It is known as the Philippines’ Last Ecological Frontier. It has 40% of our country’s remaining mangrove areas, 30% of our coral reefs, at least 17 Key Biodiversity Areas (KBAs), 2 UNESCO World Heritage Sites, and 8 declared Protected Areas (PAs). It is unmatched anywhere in the country
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  • 1. FeAtuRes 75 ‘May God Give Us Chaos, So That We May Plunder’: A critique of ‘resource curse’ and conflict theories by Kuntala Lahiri-Dutt http://www.mmgems.com/ Kuntala Lahiri-Dutt scrutinises the increasingly popular theories of the natural resources curse, natural resource conflicts, and natural resource wars. She argues that we need to rethink the issues around resource ownership rights as well as the legal frameworks governing and controlling ownership of the mineral-rich tracts of developing countries. Based on her activist research with mining communities, she shows that mineral resource management is characterised by multiple actors with their multiple voices, and it is important for us to recognise these actors and listen to their voices. Contesting the ground under mine possible alternative Some theories concerning natural explanations of mineral use by resources—‘resource security,’ ‘resource communities in the third world. In this conflicts,’ ‘resource wars’ and ‘resource article, I expose infor mal mining curse’—have entered the popular practices in order to critique the domain in discussions on resources. dominant perceptions of conflicts over Their simplistic and generalising appeal natural resources and to show how they instigates widespread and uncritical delegitimise the livelihoods of many acceptance. Therefore, the hidden communities. For example, the images discourses within them threaten to of ‘paradox of plenty’ and resource 18 Features
  • 2. No.2 2006 WOMEN IN ACTIONconflicts suggest deviant and unruly corporations take over the control andbehaviour of the third world poor. The ownership of mineral resources, andmicro-reality is much more complex, manage them in a systematic manner—involving every day struggles of survival in the process putting their profits firstfor millions of people in the mineral- and taking over the control of whatrich tracts of these countries. should rightfully belong to the communities.Being of Indian origin, I recognize theemerging mainstream developmentthinking on resource boons and curses The grim scenarios of resourceas right in line with the fatalism and curse, conflicts and warsdeterministic approach of South Asian The question, whether mineral wealthphilosophy. However, after years of is a blessing or a curse, more or lessworking in local communities, I cannot began with Richard Auty’s assertionhelp but feel disturbed by the uncritical that: ‘Since the 1960s, the resource-use of terminologies and concepts that poor countries have outperformed thetake for granted a positivist and causal resource-rich countries compared by aframework in explaining the considerable margin’ (Auty, 2001: 840).relationships between communities and Auty has been considering economicmineral resources. My focus is not on growth indicators and benefits fromcurses and boons but on: ‘How do mineral revenues, mainly exports, butcommunities pursue livelihoods in he soon developed a following amongstmineral-rich tracts in developing resource economists who busiedcountries?’ Much of my knowledge themselves in applying the thesis tocomes from community practices in the empirical studies on a regional and sub-mineral-rich tracts of South Asia, national basis, and to form a grandprimarily the collieries of eastern India, theory of all natural resources (seebut also small mines and quarries Sachs and Warner 2001). For them, thisproducing a range of other commodities. curse becomes an impediment to development by causing ‘Dutch disease’The title derives from a Bengali folk —the slump in other sectors of theproverb, ‘elomelo kore de Ma lootepute khai.’ economy that accompanies the influxThis poetic banditry perfectly explains of revenues from natural resourcewhat these theories around natural exports. The dependence on naturalresources indirectly perpetrate; a picture resource revenues makes the nationalof complete lack of control and economy vulnerable to resource pricedisorder in the third world, whose volatility and, as governments borrowinhabitants—by some irrational logic of excessive amounts in the hope ofnature—have found themselves repayments from natural resourceendowed with resources that they earnings, the fall in the real exchangecannot or do not know how to deal with, rate or prices combine to destabilise thein an orderly fashion. They envisage a economy, and making the debt burdenparanoid fear about the unruly third impossible to repay. Associated factorsworld, a landscape of apprehension, risk that help spread the curse leading toand insecurity where conflicts could only ‘failed states’ are corruption of thebe resolved for one and all if either officials running the government andstate-owned or multinational low income and education levels of 1 9
  • 3. people. Common examples of cursed legitimacy of states themselves. Overall, countries include Sierra Leone, they fail to question the movement of Liberia, Angola and Nigeria in Africa, and exploitation by global or national Ecuador, and Venezuela in Latin capital but rather attempt to give it a America, Afghanistan, Burma, and humane face. Above all, the theories, Cambodia in Asia. based upon multiple regression techniques using macro-level data on a Such theorizing involves also involves global or national scale, tend to be used diagnostic prescriptions on how to manage in unqualified ways to the local context. natural resources so as to ‘escape’ the resource curse. These silver bullets Political scientists have indeed tried to escape this economic determinism by emphasising that the resource curse theory needs to take into consideration the close relationship between economic factors and political institutions, as economic and political outcomes of natural resource abundance may differ between countries. For them, the quality of institutions determines whether or not resource rents are channelled into the productive economy. Basedau (2005) also stresses the ‘context’ or the local in understanding why resources may act either as curse or a blessing. Watts (2004) blames ‘commodity determinism’ that pays inadequate attention to specific http://www.elaw.org/ resource characteristics, in combination with rule, politics and conflict. Another critique has come from examining specific minerals; Wright and Czelusta (2003: 1) note: ‘these studies equate theHow can resources act as include ‘Publish What You Pay’ (PWYP) export of mineral products withcurse or belssing? and ‘Publish What You Lend’ (PWYL) “resource abundance,” seen as a simple demands to introduce corporate or reflection of an exogenously-given national social responsibility. These geological “endowment.” When the measures, operating within the overall revenues from this activity are described, corporate framework, imagine an terms such as “windfalls” and “booms” impracticable self-regulation to improve are generally not far behind. the existing social mess. They do not question the legitimacy of the system There is also the argument that there is of resource governance to raise uneasy a causal relation between natural issues such as community rights over resource abundance and civil conflicts, the local resources. Further measures based on the theory that rebel groups used by multilateral agencies involve finance their unlawful activities by financial pressures, such as, a reduction revenues from natural resources as an in loans to ‘illegitimate regimes,’ actually easy source of funds that sustain involve the yet unresolved issue of conflicts (Collier and Hoeffler, 2004).2 0 Features
  • 4. No.2 2006 WOMEN IN ACTION There is vicious ‘natural resource trap’— resolution specialists and external dependence on natural resources lead mediators flying in from abroad to give to all sorts of strife and unrest. Here their valuable advice to warring groups. the scenarios drawn are full of images of insecurity, fearful and bleak lives (see The scale of conflicts ranges from Bannon and Collier 2003). This genre internal civil strife to international of analysis of natural resource conflicts interventions such as in Afghanistan and also provides ‘models of conflict’ Iraq (Klare, 2002; Heinberg 2004). This according to their length/duration and is a distinct move away from wars—both intensity. ‘Lootability’ of resources also hot and cold—being seen as fought over becomes then a discourse of conflict, ideology, and probably indicates that an African diamonds being well-known intense search is ongoing for another examples. Lujala, Gleditsch and demon ever since the so-called ‘end’ Gilmore, (2004: 2) conclude that secure dawned on history. Another depoliticised mining rights tend to make ethnic conflict argument within this genre describes Iraq less likely. However, in emphasising how as a war of national versus private local groups end up killing each other ownership of the oil companies (Renner, for their ‘greed and grievance’ (Collier 2002). While these theories demonise the and Hoeffler, 2004), none of these consumption needs of the west and approaches explore what would seem to multinational capital, they however fail be basic questions such as ‘who owns to challenge them. the mineral resources,’ ‘who controls their Another view of resource wars has been use,’ and ‘who is looting and under what offered by anthropologists reflecting on circumstances.’ How does the closure of the complexity of agents and their the commons lead to the exclusion of relationships in a mining site, such as poor people from their livelihoods and Ballard and Banks (2003: 289): turn them into thieves? What legal and ‘Relationships between different actors institutional structures established by within the broader mining community states turn a common property resource have often been characterized by into openly accessible and lootable conflict, ranging from ideological resource? In making mineral-based opposition and dispute, to ar med conflicts fit a pattern, a model, the conflict and the extensive loss of lives, theories then turn the matter over to livelihoods, and environments.’ They managers and experts—conflict note that conflicts such as Bougainville rebellion (described by Filer, 1990) are essentially ‘resource wars,’ the common elements being the multinational mining company or corporationHow does the closure of the These theories give the impressions thatcommons lead to the exclusion of large-scale mining by companies is thepoor people from their livelihoods only legitimate form of mineral resource exploitation, that the use of mineraland turn them into thieves? resources by local people in the third world is inherently illicit, and requires regulation through formalised processes, such as certification of minerals. 2 1
  • 5. However, we know that even so-called Different mining practices: legitimate large-scale mining operations Small mines and quarrying lead to social and political conflicts. Many of these capital-intensive mining This focus, on large, formally owned and operations are now expanding into operated, corporate capital mineral regions with complex ethnic, social, extraction processes, ignores how poor cultural, and ecological characteristics people actually live on mineral-rich tracts in developing countries. This mining in the world. Peasant or informal mining industry—usually owned by and quarr ying—digging, washing, shareholders in the US and Europe, or sieving, panning and amalgamating— by a small national elite, or by national provide livelihood for at least 13 million governments—is literally breaking ‘new people in the global south (ILO, 1999). ground’ in developing countries. In the Extracting low volumes of minerals process, mining has been responsible from small and scattered deposits using not only for environmental changes but little capital/technology, and with low for the displacement of local labour cost, productivity and returns, is communities that have not had any a worldwide phenomenon with a long previous contact with the industry. As history and a complicated present the large scale, globalised, extractive (Lahiri-Dutt, 2004). This is often an industry endangers the loss of its ‘social unrecorded or little-known area of licence to operate,’ many civil society peasant life and livelihood; the transient groups have responded with severe nature means little or no official data is criticisms of their associated ills (see available. Informal mines may be more www.minesandcommunities.org), and important numerically; for example in innumerable protests of different forms Tanzania less than 3,000 people are against socially insensitive practices, employed in formal mining operations exclusion from benefits, and human compared to more than 500,000 in rights violations. On the one hand, we informal and artisanal mining. It has now have resistance against large mining been estimated that in 1982 about 16% operations, On the other, a series of of the total value of non-fuel minerals processes initiated by the international production came from mines with less agencies. These processes, such as the than 100,000 tonnes per annum capacity Mining, Minerals and Sustainable (Car men, 1985). Noestaller (1987) Development (MMSD, 2002), or concluded that 31% of global mine Extractive Industries Review (EIR, production of industrial minerals, 20% 2003), or the ongoing Extractive of coal, and 12% of metals came from Industries Transparency Initiative small capacity mines. The global mineral (EITI)—that have had little impact on resource extraction scenario has changed the operation style or corporate culture drastically since the 1980s, with the last of individual mining companies (Ballard few years experiencing an extraordinary and Banks, 2006). Most importantly, increase in mineral prices and we also have the ground reality of production. Consequently, the mining practices that are best described contemporary picture would be much as ‘infor mal mining’ flourishing larger than these assessments. The throughout third world countries diversity within this sector makes it an providing livelihoods to a very large ungovernable space; an astonishing number of people. range of minerals is produced in a range2 2 Features
  • 6. No.2 2006 WOMEN IN ACTION aspect of mineral resource extraction is often unclear in official definition, mostly unrecorded, sometimes carried on over hundreds of years through an artisanal tradition, sometimes exacerbated by recent developmental projects including the large mining projects, no specific data are available, although, the total aggregate production from these mines is impressive. Some informal mines have traditionally been operated by local artisans (such as the gold mines in the Cordilleras in the Philippines), whereas, some are driven by local causes, such www.radford.edu as, displacement by big mines or dams, or in a gold rush fashion operated by migrants (the ‘galampseys’ of Ghana, ‘garimpeiros’ or wildcat gold miners ofWater is one contested of ways by a range of communities. The the Brazilian Amazon, and ‘gurandils’ ofresource between communities gravels from the riverbeds in Sylhet area Indonesia, literally meaning ‘people who of Bangladesh support at least 200,000 leap from cliff to cliff ’ or ‘people who people. The gemstones in Sri Lanka for dig holes like rats’). International agencies example are produced in an artisanal way recognise that grinding poverty has ‘led whereas the cutting and polishing to the development of … small-scale factories selling the products through a mining, which is the largest activity gem exchange in Colombo are highly despite low profits and high risks’ sophisticated. Similarly, manually cut offering a means of subsistence to stone slabs or marble from Rajasthan, people of local communities (Alfa, India, find their way in a landscaped 1999). Yet, the use of ‘scale’ in defining European garden through an intricate these mines indicates a false market network. Not all, but some understanding that the ‘small’ ones are informal mines are unauthorized and just a scaled down version of the larger unlicensed; a significant amount can also ones. Martinez-Castilla (1999: 31) come from scavenging on leasehold land described such ‘traditional’ and of formal mines. Usually these mines ‘informal’ mining to root their cause in and quarries employ little technology, ‘the economic crisis, urban and can be a repository of extremely unemployment in the cities, poverty in poor people and even bonded labour. the agricultural areas and the violence Informal mining generated up to 64% that prevailed in the 1980s gave rise to of Peru’s gold production in 1991-97. a growing social phenomena—individual, In one area of south Kalimantan, 145 family or collective migration to zones unauthorized coal-mining locations other than the place of origin, searching produced probably the equivalent of for safety and economic survival’. The official coal production of the region. relations between for mal mining In Pongkor in west Java, 26,000 people expansion and spread of unauthorised make a living from gold mining. As this mining are also complex; environmental 2 3
  • 7. degradation and consequent lack of mineral resource use by communities— subsistence bases often act as the drivers often seen by statist philosophies as of unauthorised informal mining. unlawful and conflictual—is a significant way of life for many in mineral-rich Legitimacy of informal mines and tracts. To give an example, I recall a quarries depends on how a country’s roadside on the way to Hazaribagh town licensing and policing systems work and in Jharkhand, India, on a hazy winter how responsive the political morning when I stopped to take a good infrastructure is to the physical, social, look at the ant-like processions of ragtag and economic issues arising in mining men pushing bicycles—the cycle regions. The regulatory system itself wallahs—laden with sacks of coal. In attributes the characteristic of illegality the area, large, mechanised, open cut to these informal mining enterprises. projects have aggressively come up in Low profits and high costs of the last two decades often with foreign formality—complex, time-consuming loans and assistance. On its east lies and expensive regulations that tend to Raniganj-Jharia, a much older coal tract favour large companies—as well as lack with mostly underground mines and of formal property rights are major associated ills as land dereliction, impetus towards illegitimate mining in subsidence and coal fires. Hazaribagh developing countries. Thus, some used to be covered in tropical dry deciduous jungles interspersed with valleys, and the home of a number of indigenous groups. One of them was Birhors—literally meaning ‘forestThe regulatory system itself attributes peoples’—skilful hunters-gatherers withthe characteristic of illegality to an intimate knowledge of the forest resources. I had met Nirjal Birhor backthese informal mining enterprises in the early 1980s when he was still able to forage food out of the dwindling forests. On the roadside, he was almost informal mineral extraction may take unrecognisable amongst the group of place outside the formal norms of cyclewallahs who had stopped briefly to economic transactions established by the catch breath after a rather steep rise. state and formal business practices. The Nirjal is one of the 2,000 cyclewallahs legitimacy spectrum is spectacular: at one in eastern Indian coal tracts, covering end are, legal and licensed but small and up to 20-22 kilometres in a day, pushing scattered quarries of a range of minerals up to 250 kilograms of coal on a cycle, such as sand, stones, gravels, fuel, gems taking the coal to sell from door to door, and many other ores, on the other end, to domestic consumers, to small are the unauthorised mines which can industries such as brick kilns, and to local again be operated by local people, tea or food stalls. The coal he carries is migrants, or mafia warlords. either scavenged from existing open cut or underground mines, or old abandoned The unintended collieries of mines which were not filled up by sand India the state-owned coal mining company It is not my intention to match rhetoric as instructed by environmental with rhetoric, but to make the point that regulations. Nirjal also works in small2 4 Features
  • 8. No.2 2006 WOMEN IN ACTIONvillage-dug mines on individually owned mining projects in the name of ‘theland, or in rat holes sunk in the mining greater common good’. For example,company’s leasehold land. All these are indigenous commons or customarily deillegal, as per various state rules, but for facto owned lands such as gair majurwahim, there were not many opportunities are officially ‘deedless’ lands, andbut to leave his ancestral occupation as displaced communities are not entitledthe forests diminished, and to take up for compensation for losing these landswhat he describes as ‘coal collection.’ to large coal mining projects. As we know,This subsistence ‘collection’ earns Nirjal this oversight is not uncommon in manyand his family ~USD1 a day, but third world countries where colonial lawsincrementally forms a tiny part of an still rule mineral extraction; in Indonesiaunderground coal mining economy that for example, indigenous community-might well amount to 10% or more of based property rights and systems ofIndia’s annual coal production of 330 governance have been obscured bymillion tonnes from the state-owned coal broad claims of state authority tomines (Lahiri-Dutt and Williams, 2005). control natural resources for the nationalNirjal’s micro-world of survival is, of interest, leading to environmentalcourse, entirely illegal to a country which injustice (Lynch and Harwell, 2002).puts coal mining as one of the mainplanks of its nation-building agenda, and Rethinking mineral resourcesis a potential source of conflict to the managementmacro resource experts looking for a Alternatives exist, and alternativeglobal theory. explanations and approaches areLet us see a bit more closely at the laws possible. The area of mineral resourcethat turn Nirjal Birhor into an illegal coal management is characterised by multipleminer. In India, all mineral resources actors with their multiple voices, and itbelong to the state and coal is a ‘major’ is important for us to recognise thesemineral—for mining only by the state actors and listen to their voices. I amor its chosen agents. Although lands not saying that disputes over resourcesowned by adivasis or indigenous do not exist; they do, often because ofcommunities are legally ‘non- the legal situation created by the colonialtransferable’, special legal instruments legacy. But the predominant framework(such as the Coal Bearing Areas Act) can used to explain these conflicts oversupersede and has indeed forcibly natural resources by-pass communitydisplaced—physically and from mineral economies. They proposelivelihoods—millions since India became further prescriptive measures thatindependent. Coal is equivalent to consolidate the unequal and unjustnationalism and nation-building; it is control of mineral resources bycentral to the image of an ‘emerging corporations and state. These measurespower’ that the Indian state prefers to fail to adjust the existing inequalities insee itself as. The ‘power-hungry’ state— the current ‘governance’ of resources.75% of Indian coal is used for power They do not change the transfer ofgeneration—has continued to take wealth away from the communities andadvantage of colonial and exploitative do not ameliorate the policy frameworkslegal frameworks to support large scale or reallocate decision-making power. 2 5
  • 9. They invite specialists from outside to understand how ordinary people are hand out conflict resolution policies, and trying to make a living throughout the propose Corporate Social mineral-rich tracts. Responsibilities that are rarely heeded to. A rethinking of natural resource The physical reality of minerals—their management would not only involve physicality as external resources that can unmasking the inherent poverty of be seen, traced in a map, touched and empathy in popular macro-economic felt—makes it easy for mining engineers theories, such as, resource curse/ and technicians, planners and conflicts/wars and challenging their development practitioners to describe validity. We must begin this rethinking and measure them objectively, prescribe by asking the simplest questions first: technical solutions, and construct the who benefits from a mineral resource minerals scientifically and quantitatively. development and who pays what cost? This physical image of the resource The enormous and continuous wealth often introduces a certain construction drain from the local communities from of minerals’ history, society, and their subsistence can be altered, and economy. The more natural the object indeed many communities are protesting appears, the less obvious the discursive against this vast loss in various ways. construction is apparent. Though Instead of criminalising it, it is possible minerals occur as natural phenomena, to see the illegal mining economy as a we must remember that they are also popular resistance to the official mining constructed by the political economic economy (Lahiri-Dutt, 2003). We need discourses that describe them. to change the lens through which we The history of mining has been marked view mineral resource management and by the struggle for the monopolistic power of the large, multi-national, orWhat is bountiful soon state-owned formal mining companiesbecomes scarce to claim their own legality over the control of natural resources. Given the current framework of legitimacy and rights over natural resources, communities are forced to work around the tyranny of legal requirements and establish their own claims over local natural resources. This process of reclaiming or resistance to the state and foreign corporations is escalating with the increasing demands on natural resources, shifts in population, and continuing exclusions of communities. Mining engineers treat the surrounding environment of ores as overburden—2 6 Features
  • 10. No.2 2006 WOMEN IN ACTIONliterally a burden that is to be rid of at a Since 1990, Kuntala Lahiri-Dutt has beencost. We must ensure that communities involved in local community initiatives strugglingliving on the minerals are also not treated over environmental matters especially on wateras overburdens, and in so doing and livelihoods. She is currently a Communitytransform the globalised conflict and Specialist in Natural Resource Management ofdoom scenario on natural resources. the Resource Management in the Asia Pacific Program at the Australian National University. She will be the guest editor the special issueAcknowledgements planned on Water for volume 51 of DevelopmentI would like to thank Dr. David the quarterly journal of Society for InternationalWilliams of Commonwealth Scientific Development, out in 2008.and Industrial Research Organisation This paper was originally published in theand Dr. Colin Filer of Resource journal Development, vol ume 49, issue 3,Management in Asia Pacific Program 2006: Conflicts Over Natural Resources,for their suggestions and comments on published by the Society for Internationalearlier drafts of this paper. Development.ReferencesAlfa, Soumaila (1999) ‘Child labour in small-scale mines in Niger’ in Norman Jennings (ed.) Child labour in small scale mining: Examples from Niger, Peru and Philippines, Working Paper, Sectoral Activities Programme, International Labour Office, Geneva.Auty, Richard M. 2001. The political economy of resource-driven growth, European Economic Review, 45: 839-946.Ballard, Chris and Banks, Glenn. 2003. Resource wars: The Anthropology of mining, Annual Review of Anthropology, 32: 287-313.Ballard, Chris and Glenn Banks. 2006. Paper presented in Indonesia Update Conference, The Australian National University, Canberra.Bannon, Ian and Paul Collier. (eds) 2003: Natural Resources and Violent Conflict: Options and actions, Washingtion, DC: The World Bank.Basedau, Matthias. 2005. Context matters: Rethinking the resource curse in Sub-Saharan Africa, Working Papers in Global and Area Studies, German Overseas Institute (DUI), Research Unit: Institute of African Affairs, www.dui.de/working papersCarmen, John (1985) The contribution of small-scale mining to world mineral production, Natural Resources Forum, Vol. 9, No. 2.Collier, Paul and Anke Hoeffler. 2004. Greed and grievance in civil war, Oxford Economic Papers 56(4): 563-596.Extractive Industries Review. 2003. What is the EIR? http://www.eireview.orgFiler, Colin. 1990. The Bougainville rebellion, the mining industry and the process of social disintegration in Papua New Guinea, Canberra Anthropologist, 13: 1-39.Heinberg, Richard. 2004. Power down: Options and actions for a post-carbon world, Gabriola: New Society Publishers.Internmational Labour Organization (1999) Report on Social and Labour Issues in Small-scale Mines, International Labour Office, Sectoral Activities Programme, TMSSM, Geneva.Jones Luong, Pauline. 2003. Rethinking the resource curse: Ownership structure and institutional capacity. Paper presented at the International Conference on Globalization and Social Stress, co- sponsored by TIGER and Yale University, Warsaw, October 23-24, 2003.Klare, Micheal T. 2001. Resource wars: The new landscape of global conflict, Henry Holt and Company, New York. 2 7
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