Why Countries Rich in Resources Often Remain Poor
This article explores the structural economic challenges faced by resource-rich developing nations. It argues that these countries remain poor because they are trapped at the low-value extraction end of global supply chains, while developed nations capture the majority of wealth through processing and branding.
The Democratic Republic of Congo produces around 70 per cent of the world’s cobalt . Guinea holds some of the planet’s largest bauxite reserves. Zambia has exported copper for more than a century. Ethiopia’s coffee accounts for 30 to 35 per cent of its total export earnings, and the livelihood of roughly a quarter of its population depends on the coffee value chain. Yet these countries remain, by most development measures, among the poorer economies in the world.
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