In the News
Lucrative rubies might bring a resource curse
Another development story, this time its rubies in Mozambique, with a recent discovery in the country accounting for nearly 50% of the world's rubies.
The company concerned have found conditions challenging, but unsurprisingly lucrative, with one ruby from the mine selling for $43 million. However, again, from an economic perspective, it might be asked what has the discovery of the natural resource contributed to development.
Economists, like Paul Collier, have identified that natural resources can often by a curse rather than a blessing. The focus of economic activity turns to rent-seeking rather than genuine entrepreneurship, corruption is encouraged and often there is little benefit to the local economy. Let's hope that's not the case here. Unfortunately, experience suggests otherwise.