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.]

1. FeAtuRes
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‘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
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2. No.2 2006 WOMEN IN ACTION
conflicts suggest deviant and unruly corporations take over the control and
behaviour of the third world poor. The ownership of mineral resources, and
micro-reality is much more complex, manage them in a systematic manner—
involving every day struggles of survival in the process putting their profits first
for millions of people in the mineral- and taking over the control of what
rich tracts of these countries. should rightfully belong to the
communities.
Being of Indian origin, I recognize the
emerging mainstream development
thinking on resource boons and curses
The grim scenarios of resource
as right in line with the fatalism and curse, conflicts and wars
deterministic approach of South Asian The question, whether mineral wealth
philosophy. However, after years of is a blessing or a curse, more or less
working in local communities, I cannot began with Richard Auty’s assertion
help but feel disturbed by the uncritical that: ‘Since the 1960s, the resource-
use of terminologies and concepts that poor countries have outperformed the
take for granted a positivist and causal resource-rich countries compared by a
framework in explaining the considerable margin’ (Auty, 2001: 840).
relationships between communities and Auty has been considering economic
mineral resources. My focus is not on growth indicators and benefits from
curses and boons but on: ‘How do mineral revenues, mainly exports, but
communities pursue livelihoods in he soon developed a following amongst
mineral-rich tracts in developing resource economists who busied
countries?’ Much of my knowledge themselves in applying the thesis to
comes from community practices in the empirical studies on a regional and sub-
mineral-rich tracts of South Asia, national basis, and to form a grand
primarily the collieries of eastern India, theory of all natural resources (see
but also small mines and quarries Sachs and Warner 2001). For them, this
producing 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 the
proverb, ‘elomelo kore de Ma lootepute khai.’ economy that accompanies the influx
This poetic banditry perfectly explains of revenues from natural resource
what these theories around natural exports. The dependence on natural
resources indirectly perpetrate; a picture resource revenues makes the national
of complete lack of control and economy vulnerable to resource price
disorder in the third world, whose volatility and, as governments borrow
inhabitants—by some irrational logic of excessive amounts in the hope of
nature—have found themselves repayments from natural resource
endowed with resources that they earnings, the fall in the real exchange
cannot or do not know how to deal with, rate or prices combine to destabilise the
in an orderly fashion. They envisage a economy, and making the debt burden
paranoid fear about the unruly third impossible to repay. Associated factors
world, a landscape of apprehension, risk that help spread the curse leading to
and insecurity where conflicts could only ‘failed states’ are corruption of the
be resolved for one and all if either officials running the government and
state-owned or multinational low income and education levels of
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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 the
How can resources act as include ‘Publish What You Pay’ (PWYP) export of mineral products with
curse 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).
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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 corporation
How does the closure of the
These theories give the impressions that
commons lead to the exclusion of large-scale mining by companies is the
poor people from their livelihoods only legitimate form of mineral resource
exploitation, that the use of mineral
and 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.
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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 range
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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 of
Water is one contested of ways by a range of communities. The the Brazilian Amazon, and ‘gurandils’ of
resource 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
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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 ‘forest
The regulatory system itself attributes peoples’—skilful hunters-gatherers with
the characteristic of illegality to an intimate knowledge of the forest
resources. I had met Nirjal Birhor back
these 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 small
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village-dug mines on individually owned mining projects in the name of ‘the
land, or in rat holes sunk in the mining greater common good’. For example,
company’s leasehold land. All these are indigenous commons or customarily de
illegal, as per various state rules, but for facto owned lands such as gair majurwa
him, there were not many opportunities are officially ‘deedless’ lands, and
but to leave his ancestral occupation as displaced communities are not entitled
the forests diminished, and to take up for compensation for losing these lands
what he describes as ‘coal collection.’ to large coal mining projects. As we know,
This subsistence ‘collection’ earns Nirjal this oversight is not uncommon in many
and his family ~USD1 a day, but third world countries where colonial laws
incrementally forms a tiny part of an still rule mineral extraction; in Indonesia
underground coal mining economy that for example, indigenous community-
might well amount to 10% or more of based property rights and systems of
India’s annual coal production of 330 governance have been obscured by
million tonnes from the state-owned coal broad claims of state authority to
mines (Lahiri-Dutt and Williams, 2005). control natural resources for the national
Nirjal’s micro-world of survival is, of interest, leading to environmental
course, entirely illegal to a country which injustice (Lynch and Harwell, 2002).
puts coal mining as one of the main
planks of its nation-building agenda, and Rethinking mineral resources
is a potential source of conflict to the management
macro resource experts looking for a
Alternatives exist, and alternative
global theory.
explanations and approaches are
Let us see a bit more closely at the laws possible. The area of mineral resource
that turn Nirjal Birhor into an illegal coal management is characterised by multiple
miner. In India, all mineral resources actors with their multiple voices, and it
belong to the state and coal is a ‘major’ is important for us to recognise these
mineral—for mining only by the state actors and listen to their voices. I am
or its chosen agents. Although lands not saying that disputes over resources
owned by adivasis or indigenous do not exist; they do, often because of
communities are legally ‘non- the legal situation created by the colonial
transferable’, special legal instruments legacy. But the predominant framework
(such as the Coal Bearing Areas Act) can used to explain these conflicts over
supersede and has indeed forcibly natural resources by-pass community
displaced—physically and from mineral economies. They propose
livelihoods—millions since India became further prescriptive measures that
independent. Coal is equivalent to consolidate the unequal and unjust
nationalism and nation-building; it is control of mineral resources by
central to the image of an ‘emerging corporations and state. These measures
power’ that the Indian state prefers to fail to adjust the existing inequalities in
see 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 of
generation—has continued to take wealth away from the communities and
advantage of colonial and exploitative do not ameliorate the policy frameworks
legal frameworks to support large scale or reallocate decision-making power.
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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, or
What is bountiful soon
state-owned formal mining companies
becomes 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—
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literally a burden that is to be rid of at a
Since 1990, Kuntala Lahiri-Dutt has been
cost. We must ensure that communities
involved in local community initiatives struggling
living on the minerals are also not treated over environmental matters especially on water
as overburdens, and in so doing and livelihoods. She is currently a Community
transform the globalised conflict and Specialist in Natural Resource Management of
doom 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 issue
Acknowledgements planned on Water for volume 51 of Development
I would like to thank Dr. David the quarterly journal of Society for International
Williams of Commonwealth Scientific Development, out in 2008.
and Industrial Research Organisation
This paper was originally published in the
and 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 International
earlier drafts of this paper. Development.
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